Rhapsody And The Art Of The Up-Sell

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Photo by Thomas Hawk

One of my very first jobs was working behind a concession counter for a big multiplex cinema. It isn’t the sort of place where one would expect to learn a life skill, but early on I learned an important lesson in business — the art of the up-sell.

You see, movie theaters make very little from the box office receipts, so the concessions counter is the lifeblood of the industry. The setup is pretty much the same at every theater, but most people don’t tend to think about it. Because the actual cost of the popcorn and soda is so low, the theaters reap big profits from selling captive customers overpriced snacks and beverages.

To help “encourage” movie goers to pay the max, theaters will price their small popcorns at ridiculously expensive levels and then have a minor jump in price from small to medium and medium to large. If you were to price the popcorn by ounce, a small would cost four times as much as a large, but because of the high cost at the small level, it makes it easier to convince consumers to pay a little bit extra for a lot more food. My sales pitch would typically go, “Did you know you can get a large for only 50 cents extra?” That was all it took and at least 75% of the customers would go big.

In thinking about why my theater was so effective at up-selling, two things jump out at me. The first has to do with the way the pricing was set. Consumers got tremendously more value at the higher levels, then the lower ones. It might be tough convincing someone to spend $5 on a bucket of popcorn to begin with, but once they made that purchase, an extra 10% for 200% more, seems small. Secondly though, they had an actual human explain this value to the customer. Concession employees were expected to upsell or suggestive sell on every single transaction. It could be subtle, but management made sure that every employee was at least presenting more options to the customers.

What made me take this trip down memory lane is a recent experience with Real’s Rhapsody music service. Before the internet, napster, and digitization, I used to collect music with a passion. Records, tapes, CDs, it didn’t matter. I would scour local garage sales and thrift stores looking for bargains (not to mention all of the BMG and Columbia House memberships.)

When the Internet started to take off, my collecting habits intensified. I’d surf eBay for favorite artists. I didn’t care about the singles or the greatest hits, I was after the rare B-sides that were released internationally. There is something amazing about listening to an artist’s entire discography in order, but back then, it took a lot of money to buy every single song that an artist produced. And once MP3s took off, I abandoned physical playback and spent many late nights digitizing my music.

Because I had such a large music collection, I never gave Rhapsody a chance, but as one hard drive failure after another has taken large chunks out of my music library, I’ve found myself turning to the internet for specific artists or songs that I’m now missing.

Over the last year, I’ve signed up for Rhapsody three different times to listen to music that’s disappeared over time. Thanks to their free trial offers, I’ve been able to hear a lot of great music, but never kept my membership for longer than a month. What surprised me so much about the experience was how much I enjoyed it. Not only can I get the latest top hits for a fraction of what I used to spend, but I also get access to the expensive b-sides that were never in wide circulation. The first time I logged onto the service, I was estactic after discovering an entire album’s worth of material from my favorite artist.

Given how much enjoyment I’ve gotten out of the service, one would think that it would be a no brainer for me to spend a modest amount of money for access to more music then you can even think about, but when it came down to becoming a paying member, Real Networks lost me on the up-sell.

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3 thoughts on “Rhapsody And The Art Of The Up-Sell”

  1. Two things:

    1) “as one hard drive failure after another has taken large chunks out of my music library”. I would recommend this wild new technology we call ‘backups’. http://en.wikipedia.org/wiki/Backup

    2) Real has been the absolute hands-down winner when it comes to annoying internet companies. I guess I still hold a grudge from the old days when Real Player would crap up your system with so much junk it was never the same.

    Not sure I understand your logic, though, about refusing both the original product -and- the upsell. I guess it’s a matter of (your) principle? I’m sure Real is crushed.

  2. I subscribe to Rhapsody. Best described in another review by Joel Spolsky as “Too lazy to steal, too cheap to buy”. I use it on my sonos, and while I’m at work on the PC client. For the songs that I need to hear on my Ipod, I just buy them iTunes or Amazon, occasionally from Rhapsody on a one-off basis. If iTunes we’re go go with a subscription model than I’d be all over it and would probably pay 2x the price of Rhapsody if it was seamless.

    FYI — I worked at an AMC for 4 years in high school and I certainly had people walk away after the upsell attempt alerted them to the ripoff that is the small popcorn/soda combo.

  3. I was a Rhapsody subscriber for quite a while, but in the end it is just too limiting as far as what you can do with the music, especially for the price. I canceled it about a year ago. I don’t know if it has changed since I left, but I wanted to be able to stream to other devices, like the XBox 360, and couldn’t do so. I had enough devices in my living room, without adding something just for Rhapsody.

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