Loss Leader Marketing
Are you looking for a way to get your old customers back, gain new customers, and increase your sales? If so, Loss Leader Marketing may be a strategy that you should consider. The loss leader strategy is fairly simple. This strategy involves selling a particular item at a steep discount, or even a loss in order to attract new customers into your business. The objective is to lure consumers into your store so that they will not only buy the bargain item, but other items that are not sold at a discount. Utilizing the loss leader strategy within your business can be risky, so it is advisable to do some research on whether your loss leaders will be sustainable within your business and make sure it will result in a profit.
If you are wanting to get rid of overstock merchandise that isn‘t moving, a loss leader strategy will help you free up shelf space and reduce the inventory of this product. It will also result in an increased cash flow.
As stated above, if you are looking to attract new customers, utilizing a loss leader strategy can help increase brand awareness. This strategy gives customers a reason to visit your business that they may not have had before. Most consumers like a bargain, so they are more likely to come back to your business to shop again at another date.
If you are interested in Loss Leader Marketing for your business, there are websites that can help you advertise your products in this way. Groupon, Living Social, Seize the Deal, and other discount sites are being advertised daily. There are a few advantages and disadvantages that you should consider before you jump on the Groupon wagon.
The most important advantage of using Groupon is gaining exposure for your business. If consumers are searching Groupon for a particular deal and your business offers it, they are more likely to purchase this from you at a discount than they are from a company who is offering the same item or service at full price. Another advantage of using Groupon is that you will increase your income while you‘re making less of a profit per sale, you will have an increased amount of sales. Groupon can also help you move your inventory and generate new business.
A major disadvantage that you should consider before offering your products on Groupon, or any other discount site, is that all customers like a bargain. Are bargain shoppers the type of customer you want to attract? What is to say that they will come back or just keep searching for deals on the same products at different businesses? One thing that you should be cautious of when utilizing loss leaders is that you don‘t pick a product that consumers are likely to stock up on if your price is great, consumers may buy bulk of the one product, and not come to your business to purchase other products at a regular price.
If you decide that a loss leader strategy is right for you and your business, you want to make sure that you have enough of this product in stock, and let consumers know that limited quantity is available. This strategy is used to draw new customers to your business and help you increase your profits, so after you utilize loss leaders, you want to evaluate whether you are having the results you expected. If you realize consumers are only buying your loss leader, and not other products, you may realize that utilizing a loss leader strategy in your business was not for you. In most cases, loss leader marketing is a business strategy that is successful, so use it to benefit your business by building your customer base and increasing your profits.
For more information on how you can utilize Loss Leader Marketing Strategies in your business, call us at 936-225-4705.