Many firms use loss leaders to increase their customer base rather than to generate actual revenue.

Question

Quizplus · Accepted Answer

Loss leaders are products or services that are sold at a loss in order to attract customers and increase the customer base. The goal is not to generate revenue from the sale of the loss leader, but rather to eventually earn revenue from the sales of other, more profitable products or services to these new customers.

Many Firms Use Loss Leaders to Increase Their Customer Base