Do you Have a Loss Leader Strategy?
Question: Would you spend $10 to make $100?
Seems like a rather silly question, doesn't it? But let me ask it another way:
Would you lose $10 in order to gain $100?
Once I introduce the word "lose" it takes on a whole new meaning. And that is exactly why people have a problem with a concept known as loss leaders. But if you want to make money, sometimes having an effective loss leader strategy can be exactly what's needed to earn money.
Loss Leader Defined
The concept originated with retail sales and it is essentially a product (or service) that is offered at below market value (or even free) that helps to stimulate sales of other higher end products.
The loss leader's role has expanded to include online marketing channels as well. You have likely experienced squeeze pages where you are being offered something, a report for instance, in exchange for certain information, like your name and email.
How this Ties into Online Marketing
I've already described how offering a free report can entice visitors to your website to sign up to your email list or newsletter. But is this effective anymore? The answer is yes, it can be but you need to follow some guidelines:
- Keep the report that you offer short and to the point
- Offer incredibly valuable information
- Be sure to include some calls to action within the report
- Graphics and images go a long way in helping to keep the attention of viewers
- Try to find ways for the report to engage interactively with those who you send it to
Keep the Report Short and to the Point
If you try to give out a report that is the size of War and Peace, I can almost guarantee that you will not get anyone to read it. People are busy and while they want valuable information they want it to be concise.
The best lesson I learned in this regard was to focus on only one area instead of trying to cover every aspect of the topic of the report. Make it something that the reader of the report can take action on let that be the only thing included. This let's the user see that the information can help them in some way without being too drawn out.
Offer Incredibly Valuable Information
One big mistake that I see people make over and over again is to grab any old report that they find on say, Private Label Rights(PLR) websites, and pass these off as the report that they give to their subscribers. The trouble is most PLR is low quality or lacks useful information.
I am not here to bash PLR in its entirety nor am I suggesting that it has no use in the process of including it as a loss leader. What I am suggesting is that if you decide to go that route, make sure you read the PLR report and enhance it significantly such that it becomes valuable. It could even be worth rewriting the entire report with your own spin. This way no one can accuse you sending out the same stale report that thousands of others are doing.
Be Sure to Include Some Calls to Action in the Report
While it is great to capture emails in exchange for your report, you are missing out if you don't include some kind of call to action within the report that you send. The best way to do this is to tie the solution that you are offering as part of the offer itself.
As an example, if you are offering a tip on how to quit smoking, see if you can find some affiliate program that offers something that can help to that end. Try to ensure that the product claims are legit before doing this however. Other calls to action could be for products related to whatever the solution you are targeting. For the quit smoking niche, perhaps you could include offers for electronic cigarettes, etc.
One caveat in all of this is to not go overboard with too many offers in the report. This will backfire as it can be quite annoying to your subscribers and shows them that the only thing you care about is selling something. Offer great information in the report and having a couple of promotional items (as long as they are related in some way) will be fine.
Include Graphics and Images
Anytime people read anything, they often translate words into images. By including images within your report, you make it much easier to capture the message you are trying to get across. They have less translating that they will need to make.
You should make sure that you have rights to use whatever graphics or images you include!
Interactive Engagement
If you can, see if you include some elements of interactivity within the report that you send. This can include things like contents, polls, or surveys, or perhaps you can include some kind of fun quiz. By doing this you establish a higher level of trust with your subscribers.
Another way to accomplish this is to ask the people on your list to tell their story as it relates to your market or niche. Tell them that if the story is compelling enough that you will include it (with their permission) in your next blog post or as part of an email send, etc. You can also offer to include a back link to the person's website if they have one.
How Can a Free Report Be Considered a Loss?
One big misconception is that just because a report is free that it didn't cost anything to make. Now, if you simply grab a junkie PLR report and use that as your free gift, I would agree didn't cost any upfront money, but it will cost you losses with respect to your reputation.
To make it worthwhile for your subscribers you will have to spend a fair amount of time developing this valuable report.
Even if you have the luxury of working full time on your own online business from home, you still have the same 24 hours as anyone else. When you spend time working on one thing, this takes you away from spending it on something else. So the free report that you are working on could be taking you away from developing a blog post, a magazine article, a chapter in a book, etc., all things that have the potential to earn you money in the future.
It is a very real cost to create a report that is going to be useful to your subscribers!
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