Loss Leader Strategy & Ideas to Build Your List and Gain Sales momentum
The concept of a “loss leader” has been a smart marketing hack for decades. You don’t necessarily have to take an actual dollar loss, but your margin should be razor-thin. The whole purpose of a loss leader is to build that email list and gain momentum in sales.
Why does this work? Because when you have a large, growing email list and sales momentum, it means more and more people will be open to your limited edition and original works at their regular, profitable prices.
This can be a slick-sounding, uncomfortable venture for artists who just want to sell their amazing original works for thousands and stay safely tucked in their studio, creating.
It screams “print-on-demand” and they start envisioning their soulful, edgy art on a tote bag. Depressing, no?
Fear not. There are other ways to think about and structure your offerings so that your loss leader doesn’t feel like you’re completely compromising your artistic soul. But also keep in mind that your goal if your goal is to be a full-time artist, you should consider these techniques.
How to price & CreatE Urgency
Your ideal normal margins should be at least 50%, but for a loss leader, it’s more like 0 - 10%.
The ideal loss leader price is under $10 (yes, even in these inflationary times) and includes free or very cheap shipping (as in a few dollars at most … but free is best).
Whether it’s online or at an art show, it’s okay to have a $5 or $7 piece prominently displayed next to a $1000 work. Envision:
If you only have your $1000 works displayed, odds are that most visitors will dip in, admire, and leave.
But if you have a $7 offer next to that $1000 work, the contrast in prices indicates that you are a serious artist but also have a fun, charitable side as well. Visitors will admire your real work and feel like they can take home a small piece of it (and be more eager to join your email list at the same time, which is the goal).
Your best chance of getting an email address to add to your list is during a sales transaction.
On occasion, consider a cause to support with your loss leader. However, it has to be genuine and not gimmicky. Be prepared to explain why you chose that cause, and then follow through with the donation.
Your loss leader may or may not be a continuous offer. It’s something you can adjust and turn on and off as you see fit. However, creating a sense of urgency, such as a limited-time offer does help. Set a deadline of 1 - 2 weeks at most and stick to it. This could be something you offer a few times per year.
Be Resilient and Keep Testing
It might take a few attempts to get it right. If your loss leader effort doesn’t result in sales, it needs adjusting. Be resilient and keep testing new ideas. Better yet, ask a set of trusted buyers or friends what they would feel absolutely compelled to buy and at what price.
Product Ideas
Your loss leader should feel like something the average person would want to give as a gift (to others or themselves). Here are just a few ideas that have a better perceptual value than, say, a tote bag. This is by no means a definitive list.
For paintings, illustrations, photography, and other flat art:
1) Calendar: Think small pop-up desk calendar or wall calendar. This allows your buyers to experience and remember your art and name year-round.
A local printer will likely cost less than a print-on-demand (POD) company, but then you have to do the packing and shipping. However, a calendar is flat and easy to package in a tough-shelled envelope.
We have worked with a few POD companies and are happy to advise.
Always order a sample first.
2) Small Print Collection: Think Open Edition prints in a series of 3 or 4, not Limited Edition. Don’t make Open Edition prints of all of your works; just a select few. Think small … 6 x 6 canvas wraps or 5 x 7 paper, or postcards. You can always upsell to larger sizes, too.
Sell one for under $10, but then upsell the collection.
It’s best if a collection of prints can fit into a theme or appeal to buyers with a specific interest. Popular themes: Ocean, floral, national parks, animals (horses, elephants, giraffes, big cats, and marine life are good for this purpose), color themes, seasons, dining/restaurant, fashion, travel (especially international), or home state.
Create your collection in your signature style with your unique perspective. Paint it, take a high-quality picture of it, and produce it for printing.
A local printer will likely cost less than a print-on-demand company. Again, there are pros and cons to each approach.
Always order a sample first.
3) Stemless Wine Glasses: Think your style of abstract art, illustration, or photo with a transparent background on a single glass; upsell a pair.
Elegance/upscale is more implied with wine glasses vs. mugs or pints.
Stemless means less shipping risk, smaller shipping size and weight, and smaller storage size.
We definitely recommend a POD solution for this type of loss leader. However, some art lends itself to laser engraving.
Always order a sample first.
For glass, clay, wood, and other dimensional art:
Dimensional art lends itself well to creating a loss leader, but you can’t exactly send it off to a POD company, so it’s more work for you. Create something on a very small scale, using your unique pattern, and test that it’s easy/fast to create. Ideas are:
1) Ornament, whether for Christmas or year-round window display. Show images in both contexts depending on the time of year.
2) Valet trays or bowls, small and beautiful.
3) Jewelry charms. Don’t worry, you don’t have to become a jeweler (unless you want to). But your unique spin on a necklace charm in your favorite material could be amazing alongside your regularly-priced works.
A lone charm as a loss leader in an art booth or online shop next to other artworks can stand out and have more artistic value compared to the same piece in a dedicated jewelry booth or shop.
Keep in mind that having a loss leader is a short-term strategy and not meant to define you as an artist. It’s simply a way to build that extremely important email list and gain some sales momentum.
If you’d like to learn more about Austen Agency’s services, please schedule a free 15-minute phone consultation.
