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The Loss Leader Model: Marketing Concepts in Cyberspace

It is often..

. surprising to go to a store and see several items bannered about at discounts of up to 70%. You are aware of how much these products cost and here you are, drawn to these same items, with a price cut that is hard to refuse. Most sellers are aware of customer psychology. To draw them in, you need something substantial to shock them.

Loss Leader Model in Retail Stores

In supermarkets, you see bargain items that consist of chocolates, cookies, fruits, and vegetables among others. Most of these items are perishable and would need to be sold quickly. Seeing these price cuts would make you wonder if there is something wrong with these items. You check on the expiration dates and ascertain if the veggies are nearing their rotting stage. In most cases, you will find out that the cookies and chocolates are nearing their dates of expiration, and the fruits and veggies are nearly overripe or are losing their crispness.Buying those items would also make you buy other things that you need like meat, fish, condiments, and others. If you think about it, these last three items are not on sale, but you need to buy them since they must be added to the bargain veggies. It is the same thing with the chocolates and cookies. You buy them at bargain prices, but you must buy the drinks and colas that go with it. If you look closely, these drinks are not on sale. What happens, is that you buy some items at discount prices, but you end up buying a whole lot more with no discount.This is an online marketing strategy that is called the Loss Leader Method. The enticement for consumers to come to your site are the price cuts on some items with the intent of making them buy other items that are not on sale. This has been a proven marketing strategy in retail stores and is now being used online to generate traffic and sales on certain sites.

Loss Leader Model in Online Marketing

This concept in online marketing is done via the use of lateral keywords. This is not the same as the Loss Leader strategy but similar in its use. Lateral keywords are words that relate to each other but are not exactly the same thing. An example of this would be: • Swimming pool and pool maintenance • Online work and writing online • Web hosting and domain names The first two groups of words are related to each other. People who would search for swimming pools would likely be interested in pool maintenance, and other matters related to swimming pools. In the same manner, people who search for internet services would also be interested in writing online. The third group, which is web hosting, would interrelate closely with people searching for domain names. Hence, targeting the former could most likely lead the traffic to the latter.

THE IMPORTANCE OF KEYWORDS IN WEBSITESFOR THE LOSS LEADER MODEL TO WORK ONLINE, YOU NEED TO USE POPULAR KEYWORDS THAT WOULD HELP DRIVE TRAFFIC TO YOUR WEBSITE. THESE MAY NOT BE THE ACTUAL PRODUCTS THAT YOU ARE TRYING TO PUSH, BUT IT WOULD HELP EXPOSE YOU TO THE SAME GROUP OF PEOPLE THAT MAY BE INTERESTED IN YOUR PRODUCT. HAVING THESE KEYWORDS MAY NOT EARN YOU MONEY, BUT YOU WOULD GET NOTICED BY THESE SAME PEOPLE, WHO MAY EVENTUALLY BECOME YOUR BUYERS.THE ADVANTAGE OF DOING THIS TECHNIQUE, IS TO GET SEARCH VOLUME CLICKS TO YOUR SITE, WHICH MAY NOT BE GENERATED WITHOUT THE USE OF POPULAR KEYWORDS. THIS ONLINE MARKETING TECHNIQUE IS OFTEN REFERRED TO AS THE LATERAL KEYWORDS METHOD. THE CONCEPT IS LIKE THE LOSS LEADER MODEL IN THE PHYSICAL WORLD IN THAT IT DRIVES THE TRAFFIC THROUGH ANOTHER ROUTE. IT CAN ALSO BE SUMMED UP, AS SACRIFICING A COUPLE OF ITEMS FOR THE SUCCESS AND SURVIVAL OF THE REST.ONLINE MARKETING HAS GONE BEYOND THE REACH OF TRADITIONAL MODELS. IN CYBERSPACE, THE USE OF MASSIVELY POPULAR KEYWORDS CAN HELP DRIVE HOME THE TRAFFIC TO A RELATED SITE, WHICH IS YOUR SITE. THE INGENIOUS USE OF THIS TECHNIQUE CAN VERY WELL SPELL OUT THE SUCCESS OF AN ONLINE BUSINESS IN CYBERSPACE.