Loss Leaders


For all of us who have been in businesses, the loss leader is a valuable part of the retail industry. For those consumers who are stark raving mad for screaming ads that shout the latest super cheap sales that have you storming your local Westfield in droves, the loss leader is every dream come true. A vacuum cleaner for $49? YES! A pair of the latest shoes from your favourite brand for $29? YES PLEASE! The DVD box set of Gilmore Girls for $39 to celebrate their new season release? I AM IN!!

Melbourne based professional speaker

The loss leader only brings benefit when it is transformed into something more profitable.

The loss leader gets us going. It sets our heart racing for the retail thrill, our feet running to the local outlet, and our credit cards tap, tap, tapping our way to instant gratification. The loss leader demands fast attention and instant action. It requires a snap, impulse decision where the time that lapses between the advertisement and the purchase is so lightning fast that it could only be seen in the grainy pixels of the security footage in slow-mo.

If the loss leader does its job properly, we end up buying the advertised product with the speed of a thousand gazelles. But that is not all. On the way to the must-have product we see other items. Then, as we make our way to the retail altar also known as the counter, we see more. And then we see more again as we stand in line behind five other comrades whose mouths are watering just a tiny bit more than ours. Shiny items. New items. Items that are bigger and better and even more desirable than the insane bargain we already have in our hot little hands. And we imagine owning that extra item too. And we picture ourselves picking it up and giving it a home at our home. And we calculate the saving we have made on the loss leader product. And we justify the additional purchase. And with that, the deed is done. The loss leader purchase is extended. It is transformed into an investment that we were simply destined to have. We are convinced in our hearts that the loss leader brought us to the pathway that was always meant to be.

The loss leader only works for the business owner because it transforms the profit lost in that first sale into profit gained from the additional items we buy. if the business was only to sell the loss leader, without turning it into something of worth, the business would not last very long. Sustaining the losses from the sale of the loss leader can only be done for so long. If the loss is not turned into profit, the business would eventually fold.

I hope the metaphor is already emerging for you here. Losses offer no profit or gain in themselves. By definition, they leave us empty handed. They bring us nothing. They only detract from our lives. Losses hurt. They cost us something real, tangible, important. Sometimes that price is high. Losses can be expensive. The price can be exorbitant. Operating only in the loss without finding a way to make it profitable is simply unsustainable.

I like to think of the losses in my life as functioning like a loss leader. On their own they are costly. They make us pay a price in our time, our emotions, our relationships, our career, our health, sometimes even our sanity. In themselves, losses make our life unsustainable. If all we had was the loss, we would not be able to continue. If we stopped the process of our life at the loss leader, we would all have to shut up shop.

But the direct cost of the loss never reflects its greater purpose, and certainly doesn’t highlight its worth. The loss leader works when it is used as the first part of a bigger strategy. It is only when the loss initiates a sequence of attracting profit that its full value is realised. The loss opens opportunities for gain that could not come any other way. Engaging in the loss, feeling its pain, embracing the price tag allows us to accept that it is essential to us. This is the approach we can adopt to maximise the benefits of any loss in our lives.

I have put this outlook to work for me through countless seasons of loss over my life. On the days where I feel the sting of the loss, I remind myself that I will find a way to strategically transform the loss to bring gain. When the price of the loss pinches me hard, I encourage myself that this cost can become an investment into a different outcome. In this way, I reframe my concept of loss and see it as an opportunity to invest into a profitable future that I create. I am convinced that the loss actually gives us the chance to make unique, strategic, deliberate gains. The benefits of the loss come when we see it as the fist step in a bigger, more positive sequence.

And somewhere amidst this process of transforming loss into gain, I have found that the real magic happens … In reframing my perspective on life, I reframe my concept of myself. I see myself as the loss leader, because I am the one who leads the loss with clarity of purpose and precision focus. I am the captain of the ship and the driver of my destiny. I am the one who transforms every adversity into gain. I am the strategic leader of the loss, and my choices turn the price of the loss into an investment into gain.

I am not alone in this. Countless inspirational heroes across cultures and throughout time show us again and again that adversity can lead to triumph. Hardship can give rise to success. The battle can end in victory. So Loss Leaders, onward and upward! The investment will return.


0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply