By Chandran Iyer

Today  April 19  happens to be the birthday of Mukesh Ambani, an entrepreneur spearheading  India’s most valuable company, Reliance Industries Limited, as the CEO and Chairman.

On this day let us have a look at one of his very successful venture Reliance Jio and find out what we can learn. Even though Reliance Jio was a very late entrant in the telecom space , he disrupted the industry and grabbed a huge market share. How did he manage it ?

He did it through LOSS LEADING STRATEGY in a very efficient way. This involves selling a good product or service at a price that is not profitable but is sold to attract new customers or to sell additional products and services to those customers. Loss leading is a common practice when a business first enters a market. A loss leader introduces new customers to a service or product in the hopes of building a customer base and securing future recurring revenue.

Specifically, in retail businesses the price of a loss leader is lower than the actual cost the retailer paid for the item.

Jio used a loss-leading strategy for the first six months after launch, providing free unlimited voice calls and mobile data. Once people understand the value of your product , it is easy to induce them to pay.

Big Brands Like Walmart and Amazon Have Built Empires on Loss Leader Pricing. Amazon is the most dominant force in ecommerce today, and they also happen to be one of the most famous examples of loss leader pricing.

LESSON FOR ENTREPRENEURS. If you have a super product or services, offer SOMETHING from it free or at throw away prices to attract customers .Once they get confidence in you, they won’t mind paying.