Sometimes it’s a good business practice to lose money. Does that sound crazy? It shouldn’t if you trust your marketing and you think on a long enough timeline.

Marketing isn’t an expense but rather an investment. Just like your 401k, you put money in and expect it to grow. Your customers will need you again after all, and if you’ve properly invested in them and they feel valued, they’ll chose to buy from you repeatedly rather than go somewhere else.

According to Shopify, an ecommerce platform, “Psychologically our brains prefer the constant and tend to repeat our previous actions.” This is why it can be up to five times cheaper to retain a customer than to find a new one: people’s habits work in your favor. Make it easy for them and get the ball rolling with that first purchase, even if sometimes it’s a money-losing one!

Here are 3 ways that losing money can make you money in the long run:

1. Offer freebies or samples: Everyone loves free. It’s a nearly irresistible offer that’ll bring people through your doors who wouldn’t have otherwise come, and yet it has powerful effects. Free samples or “gifts” not only familiarize them with your products (think Costco’s free food samples) but also trigger the psychological principle of reciprocity.

This principle states that people who have received something free feel compelled to give something back. It’s that basic sense of fairness we all share, and it’s why when 7-11 gave away free Slurpees® a few years ago, they ended up making money. Slurpee sales shot up 38% because many people who came for the freebie paid for a larger size, and bought other items to boot. Freebies make people want to buy, and over time, they get people hooked.

How to use it: Offer something of your own for free that is valuable but not costly, and will convince people to overcome their hesitance to try out your service. Examples include:

  • Landscapers can offer a free yard evaluation and estimate
  • Dentists can offer a free checkup
  • Home repair specialists can offer a free home inspection
  • Mechanics can offer a free checkup or oil change

 

dental postcard

Example: Tague Dental Care offers free consultations.

 

2. Offer big discounts: Discounts can help customers overcome their hesitation to buy for a variety of reasons. If there’s a time limit (there always should be), they’ll be motivated by the deadline and if the offer is attractive enough, you can lure them away from your competitors. Now, if you know that they’ll need to make repeat purchases in the future, it can make sense to discount significantly because once you’ve habituated them to buying from you, they’ll be back next time without that discount.

How to use it: Offer that discount that’s too good to pass up. Examples:

  • Car dealerships can offer a big family discount on the assumption that the kids will eventually need cars too
  • Retail stores can offer half-off first purchases
  • Restaurants can offer a new-mover welcome dinner

 

3. Run a brand-building campaign: It’s always valuable to get your name out there, even if customers can’t yet take advantage of your offer. We call this a brand-building campaign and underneath it is the fact that customers need to be exposed to your brand 7 times before they start to recognize it.

Those offers can’t all be calls to action (CTAs) because you’ll appear too needy. Instead, launch a brand-building campaign that simply educates buyers on what you do. If it includes an offer, instruct them to pin it to their refrigerator and save it for when they need it. Instead of asking something, you’re offering help, which builds trust and keeps you top of mind.

How to use it: Create a postcard that educates prospects on the benefits you offer and doesn’t include a direct ask.

  • Hardware stores can offer emergency discounts (for when the drain gets clogged)
  • Restaurants and pizzerias that deliver can offer “I’m too tired to cook tonight” discounts
  • Flower shops can offer “I need to celebrate that special someone” discounts
  • House cleaning services can offer post-party cleanup discounts

Investment marketing truly is that simple. Pick the method that stands out most to you, log into our web-to-print platform, and get it out the door and be done for this week!

Or, if you’d like expert guidance, call Opportunity Knocks at 1 866-319-7109 and they can do it all for you!