Loss leaders and how to get new clients

[Kepler]

Hi there everyone,

I had a conversation with a friend of mine today who is in the restaurant industry.

He was explaining to me that they use loss leaders (a product you lose money on to attract clients to your business to try and sell your other products).

For example offering a dish for less than cost to get people in the door, then having different variations of the dish for full price.

This got me thinking in terms of applying this in online businesses, do any of y’all do this and if so what different ways have you applied it?

Best regards,

-Kepler

 

Dislike ads? Become a Fastlane member: Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)

[Suzanne Bazemore]

Hi @Kepler, I think a way this could be applied to an online business might be the offer of something free in exchange for signing up with your email address or free with a purchase. This free item could be of value, but downloadable, so that, really, other than putting it together, you're not losing money. I don't know if that counts as a loss leader or not. For example, I was checking out some cookbooks online, and I got a free, downloadable, small cookbook about outdoor cooking with my purchase. This cookbook could have been sold, but they used it as a marketing tool instead.

 

[SEBASTlAN]

Hi there everyone,

I had a conversation with a friend of mine today who is in the restaurant industry.

He was explaining to me that they use loss leaders (a product you lose money on to attract clients to your business to try and sell your other products).

For example offering a dish for less than cost to get people in the door, then having different variations of the dish for full price.

This got me thinking in terms of applying this in online businesses, do any of y’all do this and if so what different ways have you applied it?

Best regards,

-Kepler

 

[Tiago]

It varies by the case and the deal structured, but as a coach, if a joint venture partner sends a client my way, I offer them 100% of the fee when a client signs on with a 3-month program with me, because I know a high percentage of them will turn into multi-year long clients.

 

[Kepler]

Hi @Kepler, I think a way this could be applied to an online business might be the offer of something free in exchange for signing up with your email address or free with a purchase. This free item could be of value, but downloadable, so that, really, other than putting it together, you're not losing money. I don't know if that counts as a loss leader or not. For example, I was checking out some cookbooks online, and I got a free, downloadable, small cookbook about outdoor cooking with my purchase. This cookbook could have been sold, but they used it as a marketing tool instead.

That’s a pretty smart workaround honestly, never considered free digital materials.

 

[Kepler]

It varies by the case and the deal structured, but as a coach, if a joint venture partner sends a client my way, I offer them 100% of the fee when a client signs on with a 3-month program with me, because I know a high percentage of them will turn into multi-year long clients.

So this works in regards to subscription based clients, I think I’ll be giving this model a shot when I begin selling my Software to hospitals.

Thank you!

 

Dislike ads? Become a Fastlane member: Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)

[Bruno Calisso]

I think a question formula, kind of a quiz, that offers a promotional code or something like that is better for overall performance in the long term, if you ask the right questions you'll know where the client isn't satisfied and exactly where to start improving. Fast food companies have this things in their bills and it is very helpful.

 

[Kepler]

I think a question formula, kind of a quiz, that offers a promotional code or something like that is better for overall performance in the long term, if you ask the right questions you'll know where the client isn't satisfied and exactly where to start improving. Fast food companies have this things in their bills and it is very helpful.

That is helpful however it doesn’t attract people in for the first time.

 

[Kepler]

I think a question formula, kind of a quiz, that offers a promotional code or something like that is better for overall performance in the long term, if you ask the right questions you'll know where the client isn't satisfied and exactly where to start improving. Fast food companies have this things in their bills and it is very helpful.

That’s more a technique for retaining existing clients and improving your delivery of goods or services

 

[aeden]

Hi there everyone,

I had a conversation with a friend of mine today who is in the restaurant industry.

He was explaining to me that they use loss leaders (a product you lose money on to attract clients to your business to try and sell your other products).

For example offering a dish for less than cost to get people in the door, then having different variations of the dish for full price.

This got me thinking in terms of applying this in online businesses, do any of y’all do this and if so what different ways have you applied it?

Best regards,

-Kepler

This is very common in the domain name industry. Registrars like GoDaddy and NameCheap sell domain names at well below cost and then recoup the cost through other products they sell that have much better margins, like hosting.

 

[Process]

Yes it is called a lead magnet.

Paid for lead magnets are more accurate because you can actually tell they are a buyer. People who take free info can often be freeloaders.

A buyer is worth far more than 10 freeloaders in the long run.

 

Dislike ads? Become a Fastlane member: Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)