Loss Leader: Leverage Promotional Product Advertising with Loss-Leader

Have you considered the implementation of promotional advertising to attract more customers and increase profits? Here is a pricing strategy that might seem radical at first, but after closer analysis proves to be a savvy marketing technique. Consider giving a profit of a popular product or service you offer.

What a voice keeps your customers coming back for more? What would happen if you offered to this point or below cost?

Consider Gillette. Gillette sells razors below their cost. They have run numerous promotions that give away free razors. In fact, I recently received a free Gillette razor in the mail. Gillette does not make money from their sales razor. But they do a lot of money selling the blades.

A loss leader is an item that is sold below cost in an effort to stimulate other profitable sales. It 's a great way to take full advantage of your marketing. What product or service may offer a ridiculously low price, knowing that when customers decide to purchase the item that often even cheaper to buy other items that generate profits?

I am not suggesting that competing on price. Competing on price is a strategy that should be left to the people goods. Reduce margins across the board at a lower level than the competition will result in you being a previous firm.

Using a loss leader is the goal of reducing the barrier to entry for your potential customers. Once these barriers are taken away, people are more willing to buy from you. They are willing to buy the loss leader and willing to purchase your offerings with higher margins.

Think dollar menu fast food restaurants. These restaurants give normal profits on dollar menu items knowing that people tend to buy food from the regular menu.

Cinemas tend not to make any profit on sales of tickets. But make up for it, and then some, with their food sales.

Convenience stores are happy to provide low gasoline margins because many of the buyers of gas even enter the store and buy other items.

My favorite example is a loss leader convenience stores that offer free ATMs. Customers who do not want their bank accounts plundered by fee-hungry companies use these ATMs to withdraw cash. And then groped to go back through the store towards the exit with wallet full of bills recently obtained sharp burning holes in their pockets.

Have you ever wondered why they never cash in front of the store? It 's so you have to walk past all the candy, soft drinks, biscuits and other high-margin items for sale. Many people can not leave the store without making a purchase.

Implement promotional product advertising using this pricing strategy and leverage the marketing power of a loss leader .......