What category does Loss Leader belong to?

Loss Leader belongs to the "Concepts" category in personal knowledge management and productivity.

What are the key topics related to Loss Leader?

Key topics related to Loss Leader include: pricing, strategies, businesses, marketing, sales.

Loss Leader

Q: What are alternative names for Loss Leader?

Loss Leader is also known as: Loss leader pricing, Lead generation pricing, Traffic builder.

A product sold at a loss to attract customers who then purchase more profitable items.

Also known as: Loss leader pricing, Lead generation pricing, Traffic builder

Category: Concepts

Tags: pricing, strategies, businesses, marketing, sales

Explanation

Loss leader pricing sacrifices profit on one item to drive traffic and sales of other products. Classic examples include grocery stores selling milk below cost, printers sold cheaply with expensive ink cartridges, and free trials that lead to paid subscriptions. The strategy works when: loss leaders reliably lead to profitable purchases, customer lifetime value exceeds acquisition cost, and competitors can't easily match without similar follow-on products. Risks include customers buying only the loss leader ('cherry picking') and price wars. For creators, loss leaders might include: free courses that lead to paid programs, low-priced books that lead to coaching, or free community access that leads to premium memberships. The key is designing a clear path from free/cheap to profitable.

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