Are All-inclusive Business Models Profitable?

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More and more businesses are trying to appeal to the masses by offering potential customers all-inclusive deals that grant unlimited access to their premium services for a one-time payment or a (usually) low monthly fee.

Is this a good business tactic, or do companies end up losing out in a ploy to bring in more customers?

The All-inclusive Business Trend

Even small businesses are employing the all-inclusive business model that seems to have become all the rage of late. But does it really manage to bring in customers, and, at the end of the day, do these businesses lose out or win big? Let’s have a look at a few examples.

Netflix

Reigning supreme as the number one example of a successful all-inclusive business model is Netflix, the online movie, TV show, and documentary streaming service that offers unlimited viewing pleasure to subscribers for a low monthly fee. After witnessing its billion-dollar success, many other companies, such as Hulu, HBO Max, Amazon Prime Video, Disney+, and Apple TV, jumped on the streaming bandwagon.

Though Netflix started out as a sort of postal rental DVD store themselves, the company practically single-handedly rendered video and DVD rental stores obsolete with its new all-inclusive monthly subscription business model. Netflix removed the need for people to have to leave their homes, or even their couches, in order to select a film to watch. For the cost of just a few DVD rentals, customers had a plethora of them at their disposal per month. There was nothing not to love about this service, and, as we all know, the rest is history.

Kindle Unlimited

With the rise of the eBook, there was an inevitable decline in sales of the printed book. Thankfully, the printed book is far from over, however, with the launch of Kindle Unlimited, the all-inclusive monthly subscription service introduced by Amazon in 2014 that costs less than $10 a month and offers more than 1.5 million books to readers, the printed book 一 and any other eBook that isn’t on the Kindle Unlimited library 一 is having a little bit of a hard time.

But is it worth it? Considering that an average Kindle Unlimited book costs around $2.99-$4.99, it does sound reasonable, especially for avid readers or at least anyone who reads more than a couple of books a month. However, new releases cost approximately $9.99, and you won’t find any on Kindle Unlimited. Is it profitable for the company? The business model has hardly any outgoing fees for Amazon per customer yet provides the ability to promote and market many different books and products for the customers to buy, so it’s a total win-win.

Unlimited Cell Phone Data

In 2011, cell phone service provider Verizon disappointed many customers by ending its much-loved and possibly too-good-to-be-true monthly plan with unlimited data. The good news is that, a few years later in 2017, this plan was back by popular demand. By that time, other providers like AT&T, T-Mobile, and Sprint were also hopping on board and adopting this all-inclusive business model.

While the success of this service is simply the value for money for customers and the reassurance that they’ll never be threatened with that low data warning, there is another reason all these companies have jumped on the all-inclusive model bandwagon: competition. When Verizon first discontinued this service, they claimed it wasn’t in the customers’ best interests as they were, in effect, paying for data they’d never use. They soon backtracked once they realized that competitors would be picking up where they left off.

$25 Movie Tickets with Unlimited Food

Increasing the ticket prices from $9 to $25 at a struggling movie theater in Woodhaven, Michigan, that had been closed for 15 months due to the pandemic doesn’t really seem like a good idea, whichever way you look at it, but that is exactly what the owner, Jon Goldstein, did… but with the premise that it would be worth it. I have changed the business model to all-inclusive and added an all-you-can-eat concession element with unlimited popcorn, candy, pizza, chicken tenders, and other goodies, but guess what? It didn’t really work out.

Rising cinema tickets have never been on the list of moviegoers’ favorite things. Movie theaters don’t make much money from the ticket prices themselves, and there is only so much that they can raise the prices. But they have to make their money somehow. That’s why popcorn and other concessions seem to be extortionated (and why many like to sneak in their own snacks) so the idea of ​​a $25 movie ticket without another more cost-effective option is not likely to appeal to everyone. Mr. Goldsten has since removed this offer, and when asked if he would try this model again with a different theater, he said no.

Why the All-inclusive Business Model Works

All-inclusive has always been appealing. The original all-inclusive service, the holiday package at vacation resorts or on cruise ships, started gaining popularity in the ’50s, where guests pay one fee and are given free access to food, drinks, bars, clubs, private beaches, pools, spas, and other deluxe services.

An all-inclusive business model works because customers feel that they get the VIP treatment as they are given access to all the services a company has to offer, usually for a comparatively low fee. While it was once popular in sales to manage to get a large sum of money upfront from a customer 一 who would likely never do business with them again 一 businesses nowadays know that all-inclusive services that keep money regularly coming in are the way to go .

Image Credit: wutzkohphoto / Shuttertock.com

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