Time Tested Marketing - Still Alive and Well

by Ho’okani Higa

  Anyone that has been around marketing circles for any amount of time knows about loss leaders.  If you are new to the concept, here is a brief overview of what a loss leader is.

  A loss leader is a basic marketing concept where you give away a product or intentionally take a loss on the sale of a product with the intention of gaining either subsequent sales or customer contact information.

  Now why am I’m bringing up this subject?  This concept is as old as marketing itself but some need to be reminded of how powerful this idea still is.  The following is an actual real life example of how good this concept can work.  It is not internet marketing related but the idea still applies.  Here’s the story.

  In my town there is a small chain of old movie theaters that pretty much seemed ready for the wrecking ball.  If you have been to the movies lately you know how spoiled we have gotten in the new theaters with multiple screens, soft stadium seating and THX sound systems, so how does an old semi-run down theater compete in this market?  Just take an old marketing concept and apply it to the situation.  That’s just what this small theater chain did…and it seems to be working well.

  What they did was lower the price for regular admission to $1 and matinees to $.50.  Now we all know that the going rate for movie tickets are around $8 -$9 so they are taking a real loss on the cost of admission.  So how is this a good idea?  Well, they did lower the price of a ticket, but the price of the concessions stayed the same.  And this is where the big money is.

  By doing this, this theater went from having very few patrons, to selling out afternoon and weekend shows.  And the company says it is making a killing on the concessions.  They took a loss on the initial sale and made it up big time on the back end sales.

  It remains to be seen how long this will keep up, but for now it seems to be working very well for this business.

  Now just take this example and apply it to your situation which I assume is internet marketing.  Think about what your first priority is when marketing on the internet.  If you said anything other than get contact information from whoever visited your site then you are wrong.

  So what is the easiest way to get this info?  Make a trade.  Give your potential customer something of value in return for his/her email address.  What ever it is you give away is your loss leader because now you have the ability to contact this person (with their permission) on a continuing basis and possibly make multiple sales.

  With a little testing, you can figure out what your best loss leader is to get the gold nugget of internet marketing – a person’s email address.  Just goes to show that time tested marketing techniques are still alive and well.

Ho’okani Higa http://www.inet-homebiz.com/ics Give Me Just 5 Days and I'll Show You How To Solve All Of Your Product Creation Problems Fast and Forever!