That statement might sound a little confusing at first glance, but think about it again.
The concept of Loss Leaders is nothing new. Shopkeepers have been offering reduced specials at the entrance to their stores from the time retailing started. Customers love bargains and Loss Leaders are great for drawing store traffic.
However, you can put them to much better effect by doing a whole lot more. Use the exercise to talk to your customers. Introduce products which have just arrived in the store and may be of interest to them. You never know when an add-on sale opportunity may arise.
A friend of mine remembers the day he started working in a shop which sold soft goods. The manager of the shop asked him to tidy up the place and make it look more presentable. As my friend started the clean-up at the front door on a junk table full of discounted items, the manager came over and tossed everything back into a heap.
"Customers like to see off-priced goods that are untidy and worked over. It makes them think they are really cheap," he said.
Drawcards at the front door are magnets to attract store traffic. However, you should regard the Loss Leader items as no more than a lever to promote more profitable sales. Otherwise, you lose the object of the exercise.
It's no different when you advertise off-priced lines or use the tactic of 'Buy One, get a Second at 50% off'. Selling off-price is not so difficult, but never miss the chance to introduce an additional item at regular price.
And it's not really good enough to say, "Anything else?" That will always bring a "No thanks" reply. Introduce a new product. Have a few lines sitting by the register at the point of sale, where customers can see them while waiting to pay for their purchase.
Loss Leaders can certainly bring extra profits. It really depends on how much initiative you employ to bring about that extra add-on sale.
Lloyd Masel spent 40 years shopkeeping specializing in customer relations, staff training, marketing and advertising. You can contact him on falstaff@zahav.net.il for writing projects.
Source: www.a1articles.com
