So... What's Your Loss Leader?

[Zygote]

It's that time of year... yet again, where we have to make decisions and dive right in and see if we'll sink or swim for another season. (I'm still stuck in dog paddle mode.) I've been learning lately about "Loss Leaders" from helpful local full time potters. The weird thing is that the term "Loss Leader" apparently means different things to everyone I talked to. Artists, craftsmen, and galleries all had differing ideas regarding this...

 

Wikipedia says: " A loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other, profitable sales. It is a kind of sales promotion, in other words marketing concentrating on a pricing strategy. The price can even be so low that the product is sold at a loss. A loss leader is often a popular article. Sometimes leader is now used as as a related term and means any popular article, in other words one sold at a normal price.

 

^{For some of us in the arts, this can simply be a product or design that effectively raises our heads above the crowd. This can be something that brings people into your booth, or pull someone to walk into the gallery, or something that simply generates enough revenue to keep the ball rolling.}

 

^{Over the past year, I've used stenciled yunomi and chawans to bring in new clients and consistently fund the next kiln load of work. This has been my loss leader... Creating these works are very time intensive, but so far seems to be working. I'm selling works and keeping the kilns firing while I continue growing.}

 

^{What's your loss leader for this spring?}

^{We all love pictures! (Hint, Hint, Wink, Wink...)}

[jmr pottery]

I make these wall birds and sell them for around $9.each. They are my best seller, but they are boring to make (my own molds) and fairly time consuming but......they keep the bread buttered!

[Laura DeBoer]

Mugs have become my loss leader. The time spent trimming them and making handles really adds up, and is fairly dull. However, a mug is an acceptable impulse buy for many people--it can be artsy but still functional, and not too expensive. I sell mugs for $15 each, and taking my time into account, I don't really make any money from them. I can make a $50 piece in about the same time with only a little more clay. BUT, I can sell a $15 piece more easily. This also gets my name out there, and someone who bought a mug in January might come back for that $50 bowl or vase in May when shopping for a wedding present. Another word about mugs: I have learned that people are willing to pay more for a larger mug, even though it took the same amount of time to make as a smaller one with barely a difference in materials used. (The word "duh" comes to mind.) This will (hopefully) help push mugs into profitable territory this season.

[Leigh@CAC]

You could also use this term for educational offerings in the clay world. We at Clay Art Center (non profit ceramic art center in Port Chester, NY) have a gallery and studio spaces, but our bread and butter comes from our clay classes and workshops. We have a huge percentage of return students, however, we always need to attract new people, so each month we offer a one-time 3-hour weekend afternoon class called "Check It Out." The idea for this class is to give folks who might be interested in clay a one-time hands on experience, and the hope is that they will like it and have enough fun that they will sign up for a weekly class. We often run these classes (we charge $50/person) at break-even or even at a loss, just so we have the opportunity to introduce our establishment to a new person. We also hold Open Houses, with free hands-on clay experiences to bring new children and families into our doors. Similarly we hold parent/child workshops called "Helping Hands" with the same pretence.

 

If any of you teach classes out there in your studios, you might think about offering this type of "loss leader" to bring in new people. A good percentage of them will be back for more!!

 

Leigh Taylor Mickelson

Program Director

Clay Art Center

www.clayartcenter.org

 

 

[Seasoned Warrior]

it is my opinion that a loss leader is only applicable for mass merchandisers. I don't play that game; I price all my wares using the same formula. A loss leader sounds like a good idea but if you really look into it if you don't have an item to sell up or cross sell then all you are doing is losing money ont he item that sells.

[Zygote]

My studio thrives on repeat customers. For me, using a loss leader helps establish a connection with new customers and puts a tangible item in their hands. After the first transaction, customers usually feel safe with investing in larger purchases.