Sometimes companies will accept new business at a loss with the expectation that certain customers can influence other potential customers.

Question

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This strategy is called "loss leader" and is designed to attract new customers and create buzz around a product or service. The loss incurred by offering the product or service at a lower price is expected to be offset by the long-term benefits of gaining new customers who will hopefully continue to do business with the company at full price.

Sometimes Companies Will Accept New Business at a Loss with the Expectation