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,