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Friday, September 6, 2013

Offer it, they will come...Pricing for a Loss


We occasionally see a great deal offered and understand it is a loss leader to get customers to the shop, in the hope they will also purchase other items. A Boca Raton Restaurant has been noticed for offering 50% off on certain meals during the day. They knew it was a successful offer, because they produced many more daily meals than normal, and the revenue through the business increased substantially.

This approach is often used in an attempt to grow business and increase sales. Sometimes it may help leverage underutilized resources such as facilities, employees or inventory. It may not only attract new customers, but may re-attract old customers as well.

Consider using one or more of the many daily deal sites (such as Groupon, LivingSocial, Yipit, etc.) to get the word out on your great deal.

It is critical that any such offer is backed by sufficient supply of the item offered, and note any supply limitations in the offer itself. There is nothing worse for a business than having a potential customer leave angry. Don’t let your attempt to attract customers backfire on you.

Be sure you adequately provide easy access to the regularly priced items as well. These are the items you hope to sell as a result of the special offer. These items are being counted on to offset the loss on the deal offer.

Keep in mind that it is the repeat customer that makes your business viable for the long term.

 
Steve Koenig, SCORE Counselor


 

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