Subscribe
Join 40,000+ sales and marketing pros who receive our 4x a week insights, tips, and best practices.
Thank you! You have been subscribed.

Free Guide: The Ultimate Inbound Marketing Strategy Playbook 2022

Download the Playbook
Fill out the form to get your playbook
Thank you! You have been subscribed.
... Inbound Marketing Marketing Strategy
Close
The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

The Ultimate Inbound Marketing Strategy Playbook 2022
Read the Playbook
The Ultimate Inbound Marketing Strategy Playbook 2022
Free Inbound Marketing Playbook
View The Ultimate Inbound Marketing Strategy Playbook 2022
The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

Take your inbound strategy to the next level

  • Master the 7 principles of highly effective inbound marketing
  • Dramatically improve your inbound sales
  • Get more buy-in at your company

What is a Profit Maximizer? Here are 5 You Should Try.

By Bob Ruffolo

Bob Ruffolo also recommends this free guide: The Ultimate Inbound Marketing Strategy Playbook 2022.

What is a Profit Maximizer? Here are 5 You Should Try.

The most successful businesses excel at one thing that mediocre businesses don’t – maximizing the value of their customers.

We’ve all heard the saying, “it’s cheaper to retain customers than acquire new ones,” a million times. While this is true most of the time and it’s solid advice for lowering costs, it’s not really great advice for businesses that want to maximize profits.

When you’ve got a Customer Value Optimization (CVO) system in place, you’ll gladly spend the money to acquire new customers. After all, your ability to outspend your competitors on customer acquisition is your biggest advantage.

Free Guide: The Ultimate Inbound Marketing Strategy Playbook 2022

Let your competition worry about how to save money here and cut costs there – we’re focused on growing profits, not cutting costs!

The second of legendary marketer Jay Abraham’s business growth methods is to “increase the average transaction value per customer.”

That’s where the Profit Maximizer comes in handy.

What Are Profit Maximizers?

The simplest way to think of a Profit Maximizer is an upsell, but Profit Maximizers come in many forms and the upsell is only one of them.

A Profit Maximizer has one primary goal – to increase the average transaction value of your customers.

More specifically, a Profit Maximizer is typically used to immediately raise the average transaction value, resulting in immediate ROI.

While mediocre businesses are focused on a single offer, smart (and insanely profitable) businesses are creating funnels with multiple offers to maximize their profit per customer.

For example, let’s say you have a $100 offer that you’ve sold to 100 customers. That’s a total revenue of $10,000.

You might not realize it, but roughly 30% of those 100 customers likely would have bought a $300 offer immediately following the purchase of the first offer. That’s an additional $9,000 of revenue, nearly double the amount of revenue generated from each customer!

That’s the power of a Profit Maximizer.

Now imagine how your business would transform if you reinvested all of the profit from your first offer and, instead, kept the profit from your Profit Maximizer. Sure, in this example it generated $1,000 less revenue, but you’ve gained thousands of dollars that can be invested in customer acquisition, exponentially increasing potential profit.

Are you starting to see why businesses like Starbucks, Amazon, and Best Buy love Profit Maximizers? More importantly, are you starting to realize how difficult it is to compete with a business that uses this model?

Good, now let’s take a look at five different types of Profit Maximizers that Inbound Marketers can use to increase the value of each customer.

1. The Upsell

Without this type of Profit Maximizer, McDonald’s would not only be out of business, but they never would’ve made it this far.

It might surprise you to learn that McDonald’s doesn’t make any money on their Core Product, the hamburger. Well, technically they make about $0.18 profit since they spend about $1.91 to acquire a new customer.

However, the fries and Coke that come in the combo meal (the Upsell) provide an additional $1.14 in profit.

Would you like fries with that?

They’re not alone. Although it might seem like Best Buy makes their profit from 4K TVs, laptops, and gaming consoles, the reality is that they are selling their Core Products on paper-thin margins to get you in the door.

Best Buy’s real profit comes from their Profit Maximizers like accessories and warranties. While they aren’t making much on the new PS4, they’re making a killing on PS4 accessories and warranty plans. Other Profit Maximizers they upsell are installation and Geek Squad support.

What could you be offering as an upsell?

2. The Cross-Sell

If you sell a lot of products or services, the Cross-Sell is another Profit Maximizer you should consider.

You see this in action all the time, most notably by Amazon, the king of cross-selling. Unlike upselling, a Cross-Sell doesn’t have to be directly related to your first offer, though the more related they are the higher your conversions will be.

One thing that Amazon does well is pitching the Cross-Sell after you’ve added an item to your cart or you’ve made a purchase. This is important because cross-selling can be distracting and you don’t want to jeopardize the initial purchase or it defeats the purpose.

3. Bundle/Kit

Product/service bundles are one of the timeless strategies that marketers have used for decades. They also make for an effective Profit Maximizer.

Bundles are great because they work well for products and services. Inbound Marketers can especially benefit from Bundles when they combine high-margin information products with lower-margin physical products.

What could you bundle with your Core Offer?

4. Value Buckets

Similar to a Bundle, Value Buckets maximize the value of each transaction by increasing the total quantity of items purchased. The key difference is that you’re offering a slight discount in return for your customer purchasing a higher amount of your Core Product.

This works extremely well for high-margin consumable products because there’s room to be profitable at a discounted price and consumables get a lot of repeat purchases anyway – so you’re really doing your loyal customers a favor.

I recommend A/B testing this offer on the sales page against the “Thank You” page to see what gets the highest conversions. The easiest way to approach this is a BOGO where they get the second item for half price.

5. Recurring Billing

This is widely considered the holy grail of Profit Maximizers and is one of the main reasons that SaaS businesses are so profitable.

Membership or subscription services are a dream for business owners because monthly revenue becomes more predictable, as does the average customer lifetime value – making it significantly easier to manage your marketing budget and know how much you can spend to acquire customers.

Companies like Birchbox, Dollar Shave Club, and Netflix are all great examples of how to use this Profit Maximizer. However, we’re starting to see this trend pick up in all industries.

Recently I’ve noticed car wash services even promoting membership plans.

How can you incorporate a subscription or membership site into your business model?

Creating a Return Path

The content above was an excerpt of our new guide, "The Inbound Customer Value Optimization System (Using HubSpot). To learn about implementing profit maximizers, creating a return path, and the rest of the Customer Value Optimization System, get your free copy of the full guide by filling out the form below.  

The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

The Ultimate Inbound Marketing Strategy Playbook 2022
Read the Playbook
The Ultimate Inbound Marketing Strategy Playbook 2022

Free Guide:

The Ultimate Inbound Marketing Strategy Playbook 2022

Take your inbound strategy to the next level

  • Master the 7 principles of highly effective inbound marketing
  • Dramatically improve your inbound sales
  • Get more buy-in at your company

Topics:

Inbound Marketing
Marketing Strategy
Published on September 26, 2016

Recent Articles

Inbound Marketing for Construction Companies
June 11, 2022 • 11 min read
Inbound Marketing for Staffing Agencies
May 28, 2022 • 8 min read
Green Energy Inbound Marketing Strategy: The DIY Approach to Getting More Customers
May 7, 2022 • 9 min read
IMPACT+ for Teams vs. the They Ask, You Answer Mastery Program
April 15, 2022 • 7 min read
How To Grow Your Email List: 13 Savvy Tips To Try in 2022
April 7, 2022 • 9 min read
Inbound Marketing for Franchises: Attracting Your Audience
March 25, 2022 • 6 min read
3 Surefire Signs Your Content Is Hitting the Wrong Audience
March 18, 2022 • 5 min read
Inbound Marketing for Higher Education
March 11, 2022 • 9 min read
Starting a Business Blog? Features and Best Practices for Success in 2022
March 10, 2022 • 10 min read
11 Books Every Black Sales and Marketing Professional Should Read in 2022
March 5, 2022 • 10 min read
Commercial Real Estate Inbound Marketing Strategy: The Simple Way to Get More Customers
March 4, 2022 • 6 min read
Inbound Marketing for Financial Services Providers and Financial Advisors (+ examples)
February 19, 2022 • 10 min read
Inbound Marketing for IT Companies
February 11, 2022 • 11 min read
10 Reasons Why Your Website Is Not Ranking In Google
February 10, 2022 • 15 min read
Inbound Marketing for Manufacturers
February 4, 2022 • 12 min read
Inbound Marketing for Healthcare (+ Examples)
January 28, 2022 • 11 min read
How Much Does Inbound Marketing Cost in 2022?
January 24, 2022 • 12 min read
Inbound Marketing for Insurance Companies, Agencies, and Agents
January 21, 2022 • 7 min read
4 Signs Your Revenue Team Is Slowly Failing
October 23, 2021 • 9 min read
17 Examples of Inbound Marketing That Drive Sales
October 11, 2021 • 13 min read
HubSpot and Data Privacy: How to Collect Contacts the Right Way
October 4, 2021 • 4 min read
5 Key Elements of a Winning Inbound Marketing Plan
September 14, 2021 • 14 min read
The Fundamentals of Inbound Marketing
September 9, 2021 • 13 min read
Inbound Marketing Strategy: 7 Steps to Success
August 11, 2021 • 8 min read
How to Learn Inbound Marketing in 5 Easy Steps
August 4, 2021 • 7 min read