Loss Leader

A product or service priced at or below cost to attract customers who then purchase additional, higher margin products or services.

Loss leaders work when the lifetime value of the acquired customer exceeds the initial loss. They are effective for breaking into competitive markets, building email lists, or driving traffic to a product ecosystem.

A founder offers a £7 mini course as a loss leader. She breaks even or loses slightly on the course after ads. But 22% of buyers purchase her £297 flagship course within 30 days. Each £7 buyer generates an expected £65 in revenue across her funnel.