loss leader

I used to feel badly when a customer brought just one video to transfer. When I added the time I spent on the phone and two meetings with the customer, it was clear that I was not making very much per hour. Fortunately I did not let my feelings show. For as I later learned these small sales almost always led to much larger sales. In many cases the customer was trying me out to see if they liked the work I did. A good many of these small sales later brought in much larger sales, not to mention that so many of my customers ask for a few of my business cards to give to family and friends.

This strategy applies not only to the transfer business, but to many other businesses as well. In fact larger stores employ a marketing technique they call loss leader. This is where they sell an item lower than its cost. They lose money on this sale, but additional sales are often made when the customer sees other things they want in the store. The profits from these other items make the transaction profitable, even though on the face of it the loss-leader sale is unprofitable.

So my sale of an individual video transfer or a single carousel of slides, which used to bother me, turns into something like a loss leader. Now I welcome these small sales because I know that the majority of single transfer sales lead to more sales. And typically it is not just a few more sales, but usually a lot more sales. I would not have guessed this to be the case when I started. Rather I actually considered imposing a minimum fee. I’m glad I did not. I do, however, offer a sliding scale on video transfers. There’s a discount for bringing more videos. I don’t offer this on the transfer of other media. The film scanner and the slide scanner cost a lot more than the VCRs. Film and slide jobs must be done one-at-a time and require my full attention while I can transfer multiple videos at the same time.

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