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At Issue } essential reading

High margins, Groupon and the magic basket for price differentiators

Seth Godin
Tuesday, December 14, 2010

Some things sell for not much more than they cost to make. Things like steel. Others? They sell for high multiples of cost. Spa services, fancy ties, long haul airplane tickets, coaching, books--these are things that might cost a bunch to set up, but once the factory is rolling, the marginal cost of one more unit is really low. The challenge, then, is to find a way to get new customers without alienating the folks that have paid full price. Even better, to turn those new trial customers into loyal customers.

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