patterns 107 free as a business Model VP CR CH CS KP KA KR R$ C$ Cheap or free “bait” lures customers—and is closely linked to a (disposable) follow-up item or service. Important cost structure elements include subsidization of the initial product and the costs of producing follow-up products or services. Bait & hook patterns usually require a strong brand . The initial one-time pur- chase generates little or no revenue , but is made up for through repeat follow-up purchases of high-margin products or services. Focuses on delivery of follow-up products or services. This pattern is characterized by a tight link or “lock-in” between the initial product and the follow-up products or services. customers are attracted by the instant gratifi cation of a cheap or free initial product or service. bmgen_final.indd 107 6/15/10 5:38 PM