What is "Loss Leader" meaning?

A loss leader is a business tactic where a company intentionally prices a product below its market cost to attract footfall or website traffic. This strategy is often used in retail and digital commerce to increase exposure and promote the sale of higher-margin goods or services.

Example

“The eBook was priced at $1 as a loss leader to get users into the sales funnel for the premium course bundle.”

How is "Loss Leader" used in business?

Businesses use loss leaders to build customer trust, generate leads, and upsell more profitable offerings. It’s especially common in online sales funnels, email marketing strategies, and subscription-based models.

Pro Tip

Ensure your loss leader directly connects to a higher-value offer. Without a clear conversion path, you risk attracting bargain hunters with no intent to buy more.

Related Terms

Freemium Model, Upselling, Customer Acquisition, Lead Magnet