What is your val­ue meal?

Because of the COVID virus and its relat­ed eco­nom­ic impacts, change has become the norm, not the excep­tion. As a result, the ground is fer­tile for experimentation.

One easy strat­e­gy to test out new ideas that will grow your rev­enue and prof­its quick­ly is bundling. When you bun­dle a prod­uct or ser­vice you are typ­i­cal­ly tak­ing a high­er mar­gin item and bundling it with a low­er val­ue item, then offer­ing them as a bun­dled sale. The result is an increase in the aver­age val­ue of each cus­tomer interaction. 

Think fast food. They have per­fect­ed this strat­e­gy. McDon­alds has an entire com­bo meal menu, all includ­ing some type of meat prod­uct, such as a burg­er, a pota­to, such as fries and a drink. In this com­bi­na­tion, there are two high mar­gin items, the pota­to and drink bun­dled with the low­er mar­gin item, the burger. 

The key is to mea­sure your results, before and after. Start by deter­min­ing your aver­age cus­tomer sale today. Then work with your team to devel­op a few val­ue added bun­dles. As you intro­duce new bun­dles, mea­sure your results care­ful­ly so you know what is working. 

In late 2018, in con­cert with a client’s man­age­ment team, we devel­oped bun­dles for a $3Million rev­enue B to C client. In the twelve months fol­low­ing the imple­men­ta­tion of bun­dles, their net prof­it per­cent­age rose over 37%. This one strat­e­gy pro­duced a lion’s share of the increase.

Take a minute right now write down your ini­tial thoughts in this strat­e­gy. What prod­uct or ser­vice bun­dles would your cus­tomers val­ue? For your imple­men­ta­tion team, who are your most inno­v­a­tive team mem­bers? Do you cur­rent­ly know your aver­age cus­tomer sale and if not, how can you get that information? 

Be well and prosper,

Mack­ey