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Bill it, kill it, or keep it free

Professor Stefan Michel looks at whether companies can benefit from charging for previously free services in the first episode of a new video series on influential research by IMD faculty

By Stefan Michel

3 min.

December 2018

Does your company give away services that it could either eliminate or charge for and generate additional revenues?

IMD Professor and Dean of the EMBA Program, Stefan Michel, along with Insead and former IMD Professor Wolfgang Ulaga recently carried out research on how pervasive this practice is at companies and whether they should discontinue or start charging fees for previously free services.

Their research was published in the influential and FT-50 listed MIT Sloan Management Review, in an article titled Bill it, kill it, or keep it free.

In this new IMD Research and Knowledge video series, IMD faculty explore the surprising results from recently-published influential, research-based articles, and spell out the main learning points for business leaders.

What should your company do? Bill it, kill it, or keep it free?

Watch the video and find out.

Further reading:

Bill it, kill it, or keep it free in MIT Sloan Management Review

Stefan Michel also leads the online program B2B Pricing Strategy

Contact

Research Information & Knowledge Hub for additional information on IMD publications

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Mastercard 2023: Rewired for infinite optionality

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Case reference: IMD-7-2455 ©2024

Summary

In the 2010s, card processing – Mastercard’s flagship service – started showing signs of commodification as new, nimble players (typically, fintech startups thriving on digital) entered the payment processing space, and customer preferences evolved beyond plastic cards and traditional contact payments. To re-energize its central position and its ability to capture value, Mastercard – as the incumbent – had to make bold decisions. The case details Mastercard’s approach to conceptualizing and building a global platform ecosystem that upholds the principles and design elements of modularity (i.e. interoperability and scalability) and optionality. Today, Mastercard's services, based on application programming interfaces (APIs), integrate with a variety of platforms and offer flexibility to businesses that require customized payment solutions. All along, the company has accommodated a high level of internal disruption. The case also explores the nature of Mastercard’s systematic collaboration with fintechs – players that often started out as competitors in specific parts of Mastercard’s value chain. It describes the company’s engagement with fintechs as fostering collaboration and co-creation and facilitating access; in other words, opening doors and sharing tools with partners. The case presents observations and quotes by CEO Michael Miebach, whose career trajectory at Mastercard – spanning Africa & Middle East experience, fintech partnerships, product management and the CEO role – sheds additional light on the philosophy and values that have driven the company’s transformation to a technology powerhouse and self-described original fintech.

Reference IMD-7-2455

Organization Mastercard

Industry Finance and Insurance, Financial Services

Available Languages English

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