Grow Your Ecommerce Revenue With Loss Leaders

One Stop Shop

First, identify your top 10% customers in terms of Customer Lifetime Value.

Once you know who these customers are, find out the initial products they purchased with you. Look for products that they bought for their first purchase with you.

Then, rank these products according to how many top customers bought it. The more it was purchased by the top 10% customers, the higher it’ll go up in your list.

Will a single product top the list? Or will you identify a product bundle that most customers buy because it provides the most value for their money? You’ll only find out once you do this exercise.

Knowing which of your products are loss leaders enables you to strategize a marketing strategy that works in your favor. You can push your loss leaders to a prospect who’s recently signed up for your mailing list.

After all, you may just break even on your loss leader’s sale, but theoretically, this first-time customer will also make repeated purchases over time, based on the purchase history of your top spenders.

There’s no second-guessing or blindly hoping for the best scenario here. You’re promoting your loss leader simply because they promote sales -- just refer to the abovementioned exercise that you need to do before implementing this strategy. Remember: numbers, like Shakira’s hips, don’t lie.

Now, if you’re not a fan of discounting, it’s okay. The key here is to expose your prospects to your loss leaders as soon as possible. While your prospects are browsing on your website, redirect their attention to your loss leaders. During this time, they’re highly engaged so they’re more likely to check it out.

If they haven’t made a purchase yet, you can also send them a follow-up email. A simple “Hey, just wanted to check in on you. By the way, most of our customers bought this product. Here’s what they have to say about it. You may be interested…” can get the ball rolling in the direction that you’d like.

Of course, if you’ve identified a product bundle as your best-selling item, you can also send them product pitches about those as historically speaking, they’ve already been effective in increasing your Customer Lifetime Value over time.

So there you go! As of this writing, you can do the exercise manually since there’s no tool available for it yet. And if you’ve reached the end of this post and you’re excited to develop a tool that helps does this efficiently and effortlessly, let me know in the comments below! I’ll totally share it with you guys. See you next week!