Paul ~

This is the magic of the 'Loss Leader' in marketing. Giving away most or all of your profits upfront, to create a long lasting relationship which is profitable over the long haul.

You would think a store could not stay in business very long at all, by making these offers, could you? So you take them up on their 'crazy offers' while they last.

What most consumers fail to realize about advertising, and retail business in general, is the "cost" of attaining a new customer is phenomenal. Most advertising and coupons are designed to *lure* a customer AWAY from a competitor. Then to provide the customer with such service and quality products, they stay for the long term, and become "frequent purchasers".

Some marketers are known to "give away" hundreds of dollars in value of products or services, just to win you over. Then you are sold 'other' products and services which profit the marketer.

The video store could let you have videos, for thirty days at 50 cents, but may make their money on the candy mark-up. Or by "selling" pre-viewed videos to those who come in. There goal is for you to like their store and services, then continue to use them for your video needs.

This is known as developing the "Lifetime Value" of the customer.

So to review, the retailer, in this case a video store, takes a loss upfront for thirty days in order to retain you as a customer. Hopefully for many years!

Success and Regards... Mike

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