If I asked you right now, “Is your revenue goal high enough to pay yourself…
Want to know how to design offerings that increase your profit margins? As a business owner, it is important to know the profit margins of each of your offers, and it may be that right now your profit margins aren’t as big as you would like. Luckily, there is something you can do about that. You can design new offers that have better profit margins. And you can also redesign your current offers to why have better profit margins. In this blog post, I’ll be covering both. Keep on reading to find out how to design, and redesign, offerings that increase your profit margins.
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HOW TO DESIGN OFFERINGS THAT INCREASE YOUR PROFIT MARGINS
Create a one-to-many offer
If you are only currently selling one-to-one offerings and want to design offerings that increase your profit margins, then you should look at creating a one-to-many offering. A one-to-many offering is where you are able to work with or support multiple people at the same time, rather than on a one-to-one basis. This could be a mastermind, membership, event, workshop, digital course, template and more. When designing a one-to-many offer you’ll want to look at your current offer suite and also think about your past clients and think about where you are essentially helping people with the same thing over and over again.
The reason why a one-to-many offering is so good for profit margin is because you can help lots of people at the same time. There is the potential to make a lot of money without you having to commit to giving more time (or not proportionally more time). For example, you could have a mastermind where you are charging £1,000 per month. Let’s say you commit to doing a 2-hour call every week and you set aside an hour every day for being in your mastermind community. That’s a total of 7 hours per week. At the most extreme, that is 35 hours per month and let’s say you capped the mastermind at 10 people you have the potential of making £10,000 per month for 35 hours per month.
It could be right now you are chagrin more for one-to-one support. Maybe you are charging £2,000 per month. But for that people get a call every week and can contact you unlimited. When you work it out you realise each client is taking up 5 hours per week so 25 hours per month. You’d need 5 clients to make 10,000 a month and that would mean you are working 125 hours per month. Whereas with the mastermind you have the opportunity to make that 10,000 from just 35 hours per month. Do you see the difference? Yes there may be some additional costs for the mastermind (or whatever your one-to-many offerings are), but there is no denying that one-to-many offers give you the ability to increase your profit margins.
| CREATE THE RIGHT ONE-TO-MANY OFFERING AND HAVE THE RIGHT MARKETING AND SALES SYSTEM SO IT ACTUALLY SELLS.
Choosing the right one-to-many offering is one thing, but then you need to ensure it’s priced correctly and you have the right sales and marketing strategy so that you can sell that alongside everything else in your offer suite. In a Strategy Day I’ll help you to plan out exactly how you should redesign your offer suite, and then how to sell everything in your offer suite so you hit all of your business goals for the next 12 months. |
Reduce your commitments
If you are coach, consultant or service provider, then the likelihood is that the biggest cost is going to be paying you. You might not be properly tracking your time you are spending on each offering, but you should be, and that is exactly what I do with clients. This way we can properly account for the cost of their time delivering an offering and understand the true profit margin of the offering. Once you know the current profit margin you can see if there is a way to reduce your commitments within an offering so you can spend less time delivering and therefore increase your profit margins.
It’s easy, especially in the beginning, when creating a hypothetical offering to include everything, but this is a time to ask yourself “Does all of this need to be included?”. For example, I’ve had clients who have reduced the number of sessions within an offering and it has made no difference to sales. Another thing to consider is do you currently have an “unlimited” option. A designer might have unlimited changes, a marketer might offer unlimited reviews of marketing assets, and a business coach might have unlimited access via email, Whatsapp or Voxer”. The problem with any unlimited offer is it becomes hard to quantify and the usage will be drastically different. So again ask yourself “Do I need to offer unlimited?” and even if you do offer unlimited are your properly pricing based on if someone was to really go for it and make the most of your unlimited offer?
Have a VIP offering or option
Being able to charge a more premium price can enable you to increase your profit margin. Please note that it CAN enable you to have a higher profit margin, but you have to carefully look at everything you are including. Having a VIP offering or a VIP option on a current offering can enable you to charge a more premium price as people expect to pay more for a VIP option. However, you have to, of course, make sure your delivering matches what people are promised and expect.
The first thing you can do it look at a VIP option. Go through all of your offerings at the moment and see if there is anywhere you can make an upgrade option, which is the VIP option. For example, at live events the VIP option can include getting access to the front X rows in a venue, a speakers lunch/dinner or even access to an exclusive workshop ro training. If you have any type of one-to-many offering (membership, mastermind, group programme, course) then you can always include some one-to-one time with you as VIP option.
Your other option is rather than making a VIP option on a current offering is to design an offering specifically to be your VIP option. This will be your most exclusive offering, and premium-priced offering, in your offer suite. For example, if your offer suite is mainly focused on one-to-many options then you could have a one-to-one option as ayour VIP option.
Make a passive income product
I couldn’t write about how to design offerings that increase your profit margins without mentioning the passive income product. A passive income product is where you have something that someone can buy and get what they bought automatically without you being involved. This could be a self-study course, templates, an app etc.
The beauty of a passive income product is that once you’ve made it, your only limitations for sales will be down to your tech setup, but potentially you can make hundreds or thousands of sales per day. A passive income product usually has very high profit margins as you create it once (some businesses will do updates in the future) and then the ongoing costs are usually tech-related and therefore minimal.
When creating a passive income product it is important to think about what pridcuct will work with the rest of your offer suite, and remember that you’ll need to be able to successfully market your passive income procuct. There are so many businesses that get excited about passive income and make passive income products, but then don’t have the right marketing strategy in place so that it continues to make sales week after week, month after month, year after year.
| CREATE THE RIGHT PASSIVE INCOME PRODUCT AND HAVE THE RIGHT MARKETING AND SALES SYSTEM SO IT ACTUALLY SELLS.
Choosing the right passive income product is one thing, but then you need to ensure it’s priced correctly and you have the right sales and marketing strategy so that you can sell that alongside everything else in your offer suite. In a Strategy Day I’ll help you to plan out exactly how you should redesign your offer suite, and then how to sell everything in your offer suite so you hit all of your business goals for the next 12 months. |
Create an online version of something you currently deliver in-person
Doing things in-person often comes with additional costs that will impact for profit margin. For example, if you deliver an in-person workshop, you’ll need to hire a venue, possibly provide food and drink, and it will take more of your time whether that be from finding, booking and liaising with the venue, or from you having to travel to and from the venue, set up etc.
Therefore if you currently have an in-person offering really challenge yourself to see if you can do ti online instead. Now it could be that you offer both options. For example, I run my Strategy Days in-person and online. Or you could decide to make an online version and discontinue your in-person version.
That’s it. You now know how to design offerings that increase your profit margins.
Designing new offerings or redesigning your current offerings to increase your profit margins is a good move business-wise wise. Increasing your profit margin will help whether you are looking to build up reserves, have more money to reinvest in the business, or to be able to pay yourself more.
I hope you’ve found this blog post useful. If you have feel free to leave a comment below or let me know on Instagram or LinkedIn.
And if you’d like personalised help with growing your business, you can check out my service here.
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