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Home Definitions

What is Loss Leader Pricing? Definition or Meaning

Posted by Bizversity

As a startup or even an existing business which is diversifying, you would want to secure a steady customer base and recurring revenue. Well, a loss leader pricing strategy is one way to do that! This is when you offer your product or service at a price not profitable to you in the hope that the customers will return or start buying your other product lines.

For example…

Retail operators tend to use a Loss Leading Pricing strategy. They may mark down the price of certain products below their profit margin in the hope of getting customers into their store and spending on other products while they are there. This strategy works well for both online and brick and mortar stores.

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