Business Growth Strategy Series: The Profit Maximiser
A Marketing Strategy Case Study To Make You Unstoppable
Use this marketing strategy to create a business that is unstoppable. Used by Amazon, McDonalds, Gillettes, and most of the largest global companies.
This is step #06 of our proven 8 step ‘Business Growth Series’ to grow your business through your website by 200% to 1000%+.
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full list of Business Growth Strategies:
Table Of Contents
- Business Growth Strategy Overview
- Marketing Strategy: The Profit Maximiser
- The McDonalds Conundrum
- What About Amazon?
- The Worlds Largest Retailer?
- What’s The Single Biggest Company Expense?
- How Do You Become Unstoppable With This Marketing Strategy?
- Strategy Boost #01: The Re-Marketing Addon
- Strategy Boost #2: The Lead Nurturing Addon
- Strategy Boost #03: The Urgency Addon
- How Is It Applied In Step 6?
- What’s Next?
Marketing Strategy: The Profit Maximiser
With this marketing strategy, it’s where the money is made.
Remember at the start I mentioned that in business school 101, there are 3 ways to grow your business? Of course you do! I’ve only repeated it a hundred times!
- Get more customers.
- Get each customer to spend more.
- Get each customer to spend more often.
And that I said that it was the combination of these that leads to exponential growth?
I now want to focus on the second aspect of this business growth and get each customer to spend more.
Let me introduce to you to this powerful marketing strategy step….The Profit Maximiser.
Most businesses don’t have ‘2nd Trust Offer’ and they don’t have Profit Maximizers in their marketing strategy. They live and die selling cold prospects on their Core Offer.
This is why they struggle and you won’t.
The McDonalds Conundrum
What would you say McDonalds is best know for?
I’ll give you a clue. They’ve sold billions of them.
You got it. Hamburgers.
The hamburger is the Core Offer, but it’s all their extras, but mainly the Coke & fries that are their Profit Maximizers that built this big empire.
Here’s a great article about how McDonalds, Taco Bell and other chains are using extremely effective Profit maximisers!
Read it here
A few quick highlights:
- Without giving details, Subway Chief Marketing Officer Tony Pace said the offer has been a “game changer” in terms of bringing in customers since it was introduced in 2008.
- Whether you choose to order a drink with your meal makes a big difference to fast-food chains. That’s because fountain drinks have high profit margins. “The more often you can sell a drink, the better you feel about providing discounts on other items,” said Niccol of Taco Bell.
- But there’s a reason why companies dangle the offers; customers often end up spending more on other items once they’re in the restaurants. Think $3 coffee frappes and fruit smoothies.
You get the drift.
Or put another way..
“The Journal of Agricultural and Resource Economics reports that the biggest mark-ups on any restaurant menu are drinks and side dishes, thus maximizing the profits for the business. This holds especially true with fast food restaurants. McDonald’s, for example, spends between 13 and 18 cents to produce a soft drink.”
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“The typical profit margin on fountain beverages is approximately 85%. McDonald’s profit margin is 90% or more because of their volume purchasing power. Concentrate for 50,000 Cokes costs $2.60, including labor. A single penny’s worth of syrup makes almost 200 cups of Coke. The new McCafe has only increased their profits from drinks, and is considered one of the main driving factors in the company’s growth. They plan to expand the McCafe globally.”
If you want you can read the full article here. (But it doesn’t really say any more than I’ve mentioned)
You’ve Used A Razor Right?
You’ve Paid The 4750% Markup Profit Maximiser
For many of the larger companies that provide razors you could say that their core product is in the supply of razors. It’s interesting to note that they make very little money on razors but actually make almost all their profit on accessories and razor blade replacements.
The products sold by Gillette and other companies cost as little as 5p ($0.05) to make, industry insiders have revealed. But consumers are charged up to £2.43 ($2.50) a piece – a mark-up of more than 4,750 per cent.
So guess you now know why they can afford to use stars such as Tiger Woods for advertising and how they can could afford to give David Beckham a diamond-encrusted mach3 razor for Father’s Day costing $54,000.
Read the full article here.
What About Amazon?
The Worlds Largest Retailer?
Amazon makes a Cross-Sell Profit Maximizer offer when they show you, “People that bought this product, also bought that product” to increase the Average Basket Value, also known as maximizing profit.
and then they even off you another Profit Maximiser by offering you a bundle!
or check out this bundle offer…while the mouse costs $11.50, the bundle costs $477!
and that is why they are the largest retailer in the world! They might not have large margins, but they are the world experts at getting each customer to spend more.
Any Offer AFTER The Core Offer
Is A Profit Maximiser
So by now in your marketing strategy, you’ve got your ‘Lead Magnet’. You’ve got your ‘2nd Trust Offer’ and you’ve got your ‘Core Offer’. Any offer made after the initial this ‘Core Offer’ is a ‘Profit Maximizer’ and is where companies can really get ahead. So make sure that you use this tactic as well in your marketing strategy!
What’s The Single Biggest Company Expense?
It’s obvious. It’s the reason that Google is one of the largest companies in the world generating well over $10 billion! They’re the biggest ad platform on the planet and they are coining it.
It’s because the single biggest expense in the marketing strategy of most companies is the cost of acquiring the customer. That is why you have a ‘2nd Trust Offer’ to substantially bring this cost down!
Everything else increases the customer’s immediate and lifetime value.
So let’s go back to our hot dog vendor. Remember that I left off the story where he’s offering his drinks to new customers at cost. Because he doesn’t have a soda fountain (like in the McDonalds’ example which means thew soda fountain is a profit maximisers), he can use the cool drink cans as a ‘2nd Trust Signal’ to get new clients to purchase.
What he can sell as a profit maximisers are chips and various toppings and upgrades on the hot dogs. This is where he can really make his money.
What the hot dog vendor knows is that once a person has tried his hot dogs, because they’re in a business district, at least once or twice per week that new customer will visit his hot dog stand and:
- buy a hot dog (core product)
- buy a drink at normal price (upsell)
- buy chips (profit maximiser)
- buy toppings or upgrade the roll or sausage (another profit maximiser)
So this 1 new client who visits twice per week has become a very valuable client to him and all it took was a good ‘Lead Magnet’ and a ‘2nd Trust Offer’ to get them!
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How Do You Become Unstoppable With This Marketing Strategy?
Easy. It’s right in front of you.
While your competitors are focusing on their ‘Core Product’ you should be focusing on your ‘Profit Maximisers’, since this is where you will get ahead. It will help you increase your marketing budgets, it will help you get more referral business, and the impact is exponential. In my little analogy of $100 profit per client it’s the difference between your competitors spending $200 on marketing and breaking even and you getting $5000 of marketing from that original $200. It’s like shooting fish in a barrel. Point and shoot.
So what you need to do now if list out anything that you can cross-sell or up-sell and start incorporating them immediately.
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Strategy Boost #01: The Re-Marketing Addon
For Profit Explosion
By now you can appreciate the power and effectiveness of the re-marketing addon. Remember that this ‘Profit Maximiser’ is the MOST important part of the process and the more you can sell here at the highest profit level, the better your business will do.
This means that you need to be reaching them on these social platforms as well.
Here you have a choice depending on your profit maximiser.
Sometimes customers need to have purchased the core product in order to buy the ‘Profit Maximiser’ and sometimes, customers can buy the ‘Profit Maximiser’ without needing to buy the core product.
Think of it like this, you can walk into McDonalds and buy their ‘Profit Maximiser’ without buying their core product. I.e. you can buy the coke and fries without the burger.
But if you walk into Mercedes and want to purchase the leather seats or sunroof (Profit Maximisers), you really do need to have purchased their ‘Core Product’ the car first!
So depending on your ‘Core Product’ and ‘Profit Maximiser’ you might need to:
- Market To ALL Customers (‘2nd Trust Offer’ customers as well ‘Core Product Customers’)
- Market ONLY to ‘Core Product Customers’
It doesn’t matter which of these apply but this re-targeting is incredibly effective at boosting your ‘Profit Maximiser’ sales. Although your customers trust you at this point, they are busy and easily distracted, and so you need to bring them back repeatedly to your ‘Profit Maximiser’ offer.
As we’ve said a few times before:
Let’s look at a real life example. Now a plastic surgeon offers a range of cosmetic procedures, and some are more profitable than others.
For a plastic surgeon a botox treatment is a true ‘Profit Maximiser’ so they would then promote this to as many of their clients as possible
Notice how this ad is bring their clients back to his ‘Profit Maximiser’?
This plastic surgeon has understood the power of this system!
This means that your customers NEED to see your ‘Profit Maximiser’ offer between 5 & 12 times before they’ll re-act to it. It also means that if you’ve got a great ‘Profit Maximiser’ offer, then by using retargetting you can see up to a 150% higher conversion rate.
Read that again…it means that if you do it correctly you can increase the sales of your ‘Profit Maximiser’ by 150% and that’s where you’re really making your money!
Strategy Boost #2: The Lead Nurturing Addon
For A Profit DOUBLE Explosion
We’ve explained the power of this addon in detail, but used correctly here it’s brutally effective.
(Source: Gigaom Research)
You need to use the ‘Lead Nurturing’ to firstly keep in contact with the customers and regularly make contact with them and build the brand familiarity.
I want to bring back the Amazon example. Every couple of weeks I get an email from them saying ‘You might like’ and this is them just ‘Lead Nurturing’ me and bringing me back to the brand!
I just found this great email from them and wanted to show you how they have used a ‘Profit Maximiser’ in an email as well!
However, what makes this addon very powerful for ‘Profit Maximisers’ is that you can use it to communicate to your customers what their ‘After’ state will be like once they’ve purchased the ‘Profit Maximiser’.
We’re not talking 1 or 2 emails here. We’re talking 10 or 20 personalised, optimised, but automated emails over a 4 month period. By the end of the sequence they will be acutely aware of their ‘Before’ state and how much better the ‘After’ state will be. What you’re doing is using the ‘Lead Nurturing’ addon to highlight the gap between the ‘Before’ and ‘After’ state and effectively show them the value in your ‘Profit Maximiser’.
This will truly explode your sales as well as the profitability of your company.
Strategy Boost #03: The Urgency Addon
Catalyst For Boosting ‘Profit Maximiser!
I’ve explained the importance of creating ‘Urgency’ earlier on the system. I’ve looked at how you do it and the why. So by now you should understand the incredible power of this app.
So the only question remains, how is it applied in this step of the process in order to maximise your profits?
How Is It Applied In Step 6?
It’s very similar to before just this time the focus is on the ‘Profit Maximiser’.
We apply this ‘Urgency’ addon in 3 places:
- Website communication of your ‘Profit Maximiser’
- Remarketing Addon communication of your ‘Profit Maximiser’
- Lead Nurturing Addon communication of your ‘Profit Maximiser’
When you’re introducing your ‘Profit Maximiser’ to new customers for the first time you need to create a sense of urgency. One way of doing this is to offer a small discount if they act within a certain time period or possibly bundling various product/services together.
For example, if you act within 24 hours, we’ll include product X or service Y for free. Act now to avoid missing out. (People hate missing out by the way!)
Since you understand the power of this addon, you need to work out what’s the best way for you to apply it to your ‘Profit Maximisers’ as well as the addon 1 and addon 2 here for maximum impact!
Whatever you do, make sure you create this sense of ‘Urgency’ or ‘Scarcity’!
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I always love looking at what market leaders do and then applying it to business.
I’d now like to look at a the powerful boosts in more detail that can have a massive impact when combined in our business growth strategy series!
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