How To Double Your Profits

This blog series is a summary of the Double Your Sales video series by Ryan Deiss. This post is a summary of video #5: Double Your Profits. You can watch the original video in its entirety for free by clicking here.

These posts go in order. I highly recommend that you read post #1, The Formula before continuing with this post.

Note: In the series, Ryan mentions Infusionsoft as the tool of choice to execute this plan. While Infusionsoft is a great product, this entire system also can be done in Active Campaign for a much lower price and easier setup process.

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profit_maximizer

Many times when you offer a low-end lead magnet that’s paid for with advertising, your margins are quite low. You might break even if you’re lucky. Many marketers give up at this point and just say “online marketing doesn’t work.”

That’s because they haven’t implemented a profit maximizer. Profit maximizers work because once you have a qualified buyer, it’s much easier to get them to buy something else. The role of the tripwire is to get the paying customers into the funnel. The profit maximizer takes those customers and increases your profit margins.

It’s like planting seeds. The tripwire is like a seed. The profit maximizer AKA the upsell is the harvest.

what_is_a_profit_maximizer

The classic idea of a profit maximizer is McDonald’s with the classic question, “Do you want fries with that?” That’s an upsell. Did you know that McDonald’s makes pennies on the burgers? The burgers are the tripwire offer to get you through the door. It’s real profits are made on the fries and the drink.

However, you need to have a legitimate upsell, not a bait and switch. Imagine buying a car for a low price and then the seller says, “Hey would you like to buy a steering wheel?” That’s not a legitimate upsell. That’s a bait and switch.

A great upsell supplements the initial offer. A legitimate example with cars is a warranty package. It’s optional and the car still works without it. However, the dealership makes a huge profit margin on this product.

Your upsell needs to be related to the initial offer and make it better.

Example: Have you ever walked into Starbucks and see cd’s, accessories, expresso machines and mugs? The margin on these items is very high. These are also profit maximizer items.

A slack adjuster is a “super upsell” A slack adjuster costs 10 to 100 times more than the core offering. For example, Starbucks sometimes will sell a $3000 espresso machine in their stores. They don’t sell a lot of them, but it’s a huge profit when they do. Only 1 or 2 percent of your customers will buy these, but they add a lot to your bottom line.

starbucks

Find ways to add recurring billing into your business model. The tanning industry is an expert in this model. Car washes are starting to do this as well in many cities.

The cost of acquisition was only incurred once. Now, they keep on selling!

Another great way to do a profit maximizer is through bundling.

bundling

For example, a seller on Amazon changed his core offering from a razor to a set of 5 items to make a complete set. The razor alone sold at retail for $30. By adding the other items, he was able to raise the price to $115. However, because the other 4 items in the set had huge margins, he was able to significantly increase his overall margin. What can you do to bundle your items together?

The best type of profit maximizers are speed and automation services. How can you get them to the desired end result faster with less work? That’s the killer combination!

Here are some other ideas:

speed_and_automation

Listen carefully for the 3 magic words “I want help.” When you hear them, you know that you will have a great prospect for your done for your speed and automation upsell offer.

Next Steps

  1. Read step 6 of this article
  2. Brainstorm 3 “speed and automation” offers

Ready to move on? Continue to step #6, Create A Return Path

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