Dec. 3, 2024

Bundling for Profit: The Science of Strategic Packaging

This topic explores how to create irresistible product/service combinations that increase average transaction value while making your business more unique and valuable to customers.

Powerful Business Strategies is broadcast live Mondays at 12 Noon ET...

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This topic explores how to create irresistible product/service combinations that increase average transaction value while making your business more unique and valuable to customers.

Powerful Business Strategies is broadcast live Mondays at 12 Noon ET Music on W4CY Radio (www.w4cy.com) part of Talk 4 Radio (www.talk4radio.com) on the Talk 4 Media Network (www.talk4media.com January Jones Sharing Senior Success is viewed on Talk 4 TV (www.talk4tv.com).

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WEBVTT

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The topics and opinions expressed in the following show are

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solely those of the hosts and their guests and not

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those of W FOURCY Radio. It's employees are affiliates. We

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make no recommendations or endorsements for radio show programs, services,

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or products mentioned on air or on our web. No

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liability explicitor implies shall be extended to W FOURCY Radio

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or it's employees are affiliates. Any questions or comments should

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be directed to those show hosts. Thank you for choosing

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W FOURCY Radio.

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Welcome to Powerful Business Strategies, where you will find out

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that everything you have ever learned about growing your business

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is wrong. Finally, a show where you'll learn the right

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way to grow your business by learning business and financial

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strategies that your competition isn't doing. And now here's your host.

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Resident of Next Step CFO Michael Barbarita and joining Michael

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for today's show as an executive moderator is chooky obia.

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Yes, this is chokey, and I believe that gratitude is

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undefeated and growth is about the next step. It is

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an honor for me to moderate today's discussion with my

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good friend Michael.

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Michael, how are you excellent? How are you, Choky? How

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is your thanksgiving? Well?

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My thanksgiving was full of gratitude. How is yours?

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Likewise? But full of food? That's the problem. There you

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go against my doctor's wishes. Well, thank you, Chocky. My

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name is Michael Baberria, President of Next Step CFO, and

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next Step CFO is a fractional CFO and strategic implementation

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firm and our vision is to ensure overwhelmed business owners

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achieve the time, freedom, and consistent profits to build a

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legacy and live the life they desire. And our mission

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is dedicated to guiding small business owners to leveraging their time,

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exploding their profits, and building a meaningful legacy. This show,

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Powerful Business Strategies in our book of the same name,

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is a step toward accomplishing that vision and mission. So

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with that, I would like to hand it back to

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my co author and moderator for the show, Choky Obio.

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Yes, so.

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It's quite energizing, right Michael. I mean you mentioned being

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full of food. I believe today's episode is going to

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be full of a lot of food for thought.

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How about that? Right? There A lot of people thoughts.

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So folks, you know we have a number of people

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listening Coast to Coast. I mean, we'll continue to really

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grow the audience for this show. And look, Michael and

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I were both affiliated with a number of different organizations.

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I currently serve as a managing director of business development

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for Vetterprice, a global business focused law firm. In addition

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to that, it's truly an honor to collaborate with Michael

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to moderate business roundtables coast to coast and just document

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the best practices from those roundtables. That's part of what

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informs our book called Powerful Business Strategies. But please, folks,

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note that the views expressed on this show are our

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personal views based on our successful experiences and my mission

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as a fearless moderator to ask the right questions to

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help you the listener, learn the best practices and best

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business strategies that the competition isn't doing.

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So with that, I'll toss it back over to Michael.

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Thank you, Jucky. So we're going to talk about something

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that's causing you thousands in profits and law actually in

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lost profits, and that's your approach to bundling and packaging

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your products or services. You know, just last week I

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was working with a client who runs a successful HVAC company.

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And he looked at me frustrated and said, Michael, everyone

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in my industry offers the same maintenance packages. We're all

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just competing on price. Does that sound familiar. Well, I've

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got news for you. Everything you've learned about bundling and

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packaging your services is wrong, and I can prove it

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to you today. Did you know that most businesses actually

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lose money on their bundles and they because they think

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they're creating value, but they're really just discounting themselves into

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lower profits. But here's what's fascinating. The most profitable companies

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in any industry who are bundling and packaging aren't the

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ones with the lowest prices or the biggest discounts. They're

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the ones who understand the science of strategic packaging. And

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over the next forty minutes or so, I'm going to

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share specific strategies that have helped business owners increase their

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average transaction value by forty to two hundred percent using

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what I call strategic value bundling. And I'll show you

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exactly how one company went from selling eighty nine dollars

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service to nine hundred and ninety seven dollars premium packages

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and their customers thank them for it. And I'm going

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to reveal what I call the bundle profit formula, a

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systematic way to create packages that your competition can't copy

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and your customers can't resist. And the best part, once

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you understand this formula, you can repeat it over and

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over and over again in any business. So grab a

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pen and paper, because I'm about to share strategies that

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will completely change how you think about packaging your products

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and services. And if you're driving, don't worry. You can

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catch this episode again at our podcast at but Powerful

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Business Strategies dot com. So if you're just joining us,

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we're going to talk about strategic value bundling and I

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promise to show you exactly how to do it. So

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let me tell you about Tom. Tom runs a successful

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auto repair shop, and like most shop owners, he was

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offering the standard oil change package that included an oil

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change filter, basic inspection, maybe a tire rotation thrown in.

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He was competing with every other shop and who offered

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the exact same packages, and his margins were getting squeezed

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tighter every year. And then he implemented what he called

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the value stack method. So instead of just bundling services

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based on cost, he bundled based on what customers actually value.

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And by the way, he discovered through a survey of

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his customers, and I'll say that again, he discovered the following.

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Through a survey of his customers. He found that eighty

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five percent were worried about unexpected repairs, seventy two percent

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hated having to make multiple trips, ninety percent wanted peace

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of mind about safety, sixty eight percent would pay more

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for convenience. So what he did is he created what

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he called lifetime value packages. So he had that basic

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care package, you know that eighty nine dollars standard oil

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change that everybody else was doing, with twenty seven point inspection,

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a fluid top off, tire rotation, all that stuff. But

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then he stepped up to a Premium Protection package, which

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was everything that was in the basic plus the annual

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state auto inspection, brake inspection, battery service, road trip safety check,

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priorities scheduling, and a digital maintenance tracker. And then he

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upgraded everybody to what he called the Ultimate Piece of

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Mind package, which include everything in the Premium package plus

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twice yearly alignments. All included in the package annual brake service,

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battery replacement program, tire rotation program, twenty four to seven,

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roadside assistance, which, by the way, he subcontracted out to

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Triple A or one of those roadside assistance companies, VIP scheduling,

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and monthly vehicle health reports. And here's how the pricing went.

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The basic was eighty nine dollars, that was that clone

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of everybody else. The premium was two ninety seven, and

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then the ultimate was nine to ninety seven. And what

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happened is sixty five percent of customers chose the premium

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or ultimate package, and his average transaction value went from

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eighty nine dollars to over four hundred dollars. And the

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cost to deliver these packages only increased by thirty percent,

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while his revenue increased by three hundred and fifty percent.

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Because he wasn't just bundling services, it's creating value that

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customers couldn't find anywhere else. Sounds like a position of

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market dominance to me, actually, So let me show you

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another example that will really drive this home. So Sarah,

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who runs a successful house cleaning service. Like most cleaning companies,

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she was charging by the hour or by the square

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footage and when she analyzed her business, she found she

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was leaving thousands on the table. So she created what

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she called lifestyle experience packages, and there were basically three packages. Again,

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one was called Essential Cleaning, which was standard cleaning, basic sanitation,

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surface dusting, and floor care. That was one package. The

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other package she called the Healthy Home Package, which included

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everything in the first price point Essential package plus deep sanitization,

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air vent cleaning, allergen treatment, natural cleaning products, and monthly

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indoor air quality report. All above and beyond what all

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the competition was doing, and it was a step up.

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The third was what she called Total Home Transformation Package,

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so everything in the Healthy Home package plus quarterly deep cleaning,

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pantry organization, closet organization, garage organization, and a monthly maintenance plan,

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priority scheduling and season of deep cleaning. Now the pantry organization,

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the closet organization, and the garage organization she actually subcontracted

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to a professional organizer, and so she had that was

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part of her cost of that package. But the results

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were incredible because her average client value increased by one

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hundred and eighty percent in the first ninety days, and

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her customer retention went up because she wasn't selling cleaning anymore.

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She was selling a better lifestyle. But let me show

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you the real secret to making this work. See, most

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businesses make these three critical misses stakes with bundling. Number one,

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they focus on cost instead of value. Two, they bundle

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what's easy instead of what's wanted. Okay, so what's easy

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to bundle together they do instead of what's really wanted

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by the customer. I mean a perfect example is like

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things like that Sarah did, priorities scheduling and you know,

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monthly maintenance, seasonal deep cleaning, those types of things that

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those are what customers really wanted. Now did you have

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to work to get to you know, to get to

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that point? You have to do some change a little

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bit of her mode of operation so to speak. Absolutely,

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but it paid off big. So once again those three

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critical mistakes. Number one, they focus on cost instead of value.

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Number two, they bundle what's easy instead of what's wanted.

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And number three, they compete on price instead of customer experience. Interesting.

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So Michael, let's pause here and just take a couple

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of questions and comments from the audience.

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I do you have just a minute for that?

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Sure?

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Brilliant, So look This is a really interesting I believe

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this particular business owner tuned into one of our last episodes,

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so they referenced this point about how you recommend every

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one hundred and eighty days to have sort of a

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customer relationship review conversation. Right, right, great, So part of

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the frame for their question on this, Michael, is to

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really know what's wanted as part of a bundle or package.

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Do you think it makes sense to have that as

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part of the customer relationship review conversation, you know, once

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every six months or so.

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Yeah, it's really important because understanding what the customer really wants,

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and you know, I think it starts with the business

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owner thinking outside the box. Okay, and by the way,

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you can use it for this. You know, what are

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some services that I can offer as an HVAC company

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or as a cleaning service that go above and beyond?

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And then you take that list and then you ask

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the customer during those reviews. I mean, now, you know,

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I don't want to take the creative thinking away from

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any of the business owners out there, because if they

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could come up with their own, fine, But a lot

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of people get stuck on this because they can't think

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outside of what they do in the ordinary course of business,

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and AI can help them with that, especially if they

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train the robot about their business. So yeah, that would

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be that would be my answer to that question. And

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if they could come up with those different things, or

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if their AI robot could come up with those different things,

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they can present them to the customers and see if

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there's real value there.

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That's brilliant.

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And this is also another business owner who I believe

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is listened to some of our last episodes, Michael. They

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ask does this relate to the customer avatar? So, in essence,

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can they reference their customer avatar process as part of

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figuring out what customers.

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Wants as part of a bundle or package.

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Yeah, that's really an excellent it is. Yes, that's an

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excellent question. Excellent idea that it could be part of,

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you know, this process of creative thinking of additional services

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that you can offer in a bundle. That's part of

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the what the customer goes through, you know what their

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thought process is, you know, and when you present that idea,

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will the light bulb go on to the customers say yes, man, yes,

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I'd be very interested in that, or no, I won't.

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I won't be very interested in that to which would

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be outside the scope of the avatar. So yeah, so

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understanding that that avatar is really a great way to

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really understand what the customer is thinking. And you have

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to put yourself in the position of that of a customer,

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that ideal customer, the ideal customer. Yes, so now these

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are three mistakes that I want to go through again.

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They focus on costs instead of value. They bundle what's

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easy instead of what's wanted, and they compete on price

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instead of customer experience. You know, customer experience. You know,

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all professional sports teams are really focusing on customer experience.

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So when you go to a game now, it's so

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different than it was twenty thirty years ago. I mean,

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it's just like totally completely different. There's more of a

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customer experience. There's reality events going on, there's all different

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types of activities, you know, using the Jumbo Tron and

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all of that stuff. It's the same thing here. We

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want to improve the customer's experience. So here's how to

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avoid these mistakes. For every product or service you offer

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in a package, ask yourselves these questions, Number one, what

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problems does this solve? Second, by the way, you can

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ask AI these questions too. By the way, what problems

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does this solve? What anxiety does this reduce? What convenience

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does this ad? What experience does this create? What status

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does this convey? Let me go through this again. So

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here's how to avoid these mistakes that people make when

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packaging are bundling. They should add for every product or

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service you offer, you should ask yourself or the robot

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or the customer, what problems does this solve? What anxiety

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does this reduce? What convenience does this ad, what experience

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does this create? And what status does this convey? That

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status one's really interesting. So let me give you another example.

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A pest control company that was struggling to compete with

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national chains. Instead of just bundling standard services, he created

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home protection zones. He created actually three zones. One was

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entry prevention, This was sealing entry points, install barriers, monitor activity,

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and a monthly inspection. And by way, all these first

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price point package bundles, they're all basically they're brought basically

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what the competition is doing. For the most part, it's exciting.

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It gets interesting when you add these other these step ups.

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So in zone two he had this perimeter protection, which

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included everything in zone one plus yard treatment, garden protection,

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and quarterly prevention. And then in zone three he had

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everything in zone two. It's called the total property shield,

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and it included attic protection, crawl space care, foundation treatment,

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annual termite inspection, emergency response, and property protection guarantees. And

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their average contract value went up three hundred percent, but

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the cost only one up forty And the rest is

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your profit because the cost does go up on some

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of these programs. As I mentioned, you're subcontracting some of

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these things to others, and so at this at this time,

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before I get into any other strategies, and before I

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talk more about strategic value bundling, we're going to take

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a ninety second break. Hey, their business owners, let me

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ask you something. Are you tied of blending in with

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your competitors, frustrated with slow growth and slim margins? Well,

281
00:18:42.200 --> 00:18:45.440
I've gotten news for you. Everything you've ever learned about

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00:18:45.480 --> 00:18:49.960
growing your business is wrong. Don't worry. I'm here to

283
00:18:50.039 --> 00:18:52.880
let you in on a secret weapon. Your position of

284
00:18:53.000 --> 00:18:56.880
market dominance. It's what sets you apart, makes you irreplaceable,

285
00:18:57.279 --> 00:19:00.720
and has customers lining up at your door. My name

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00:19:00.759 --> 00:19:04.359
is Michael Babarrita from Next Step CFO. I know what

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00:19:04.359 --> 00:19:07.680
you're thinking. Sounds great, Michael, but how do I find

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my position of market dominance? Well, that's exactly why we've

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created our game changing implementation program called next Step to

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Market Dominance. In just ninety days, we'll guide you step

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00:19:18.759 --> 00:19:21.759
by step to a position of market dominance by uncovering

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your unique strengths that competitors can't touch. By crafting a

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message that resonates deeply with your ideal customer, by building

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a strategy that turns you into the go to expert

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in your field. Now this is in theory. These are

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battle tested strategies that have helped businesses like you as double, triple,

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00:19:39.079 --> 00:19:43.359
and quadruple their revenue. Don't let another quarter go by

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struggling to standout. It's time to dominate your market period.

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00:19:48.359 --> 00:19:52.640
Go to NEXTSTEPCFO dot net forward slash contact. Fill out

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00:19:52.640 --> 00:19:55.640
the form and in the message section put the word

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00:19:55.960 --> 00:19:59.640
dominate or call us at seven eighty one three two

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00:19:59.720 --> 00:20:03.680
six three A two two. That's next STEPCFO dot Net

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00:20:03.759 --> 00:20:07.359
forward slash Contact or call us at seven eighty one

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00:20:07.400 --> 00:20:13.279
three two six three eight two two. So welcome back,

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00:20:13.359 --> 00:20:16.359
and if you're just joining us. We're talking about strategic

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value bundling, and I'm about to show you something that

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will transform how you price your packages. So let me

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introduce to you what I call the bundled profit formula.

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And this is the exact system a landscaper used to

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triple his average contract value while increasing his profit margins

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by eighty five percent. And here's what most business owners

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get wrong about premium bundles. They just take their basic

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service and add more stuff. That's a little backward. Premium

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bundles aren't about more, they're about better. And let me

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show you how that works. So Micro runs a landscaping

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company that was stuck on competing on price for basic

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maintenance contracts, and then he implemented what he called the

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experience Evalue elevation system, so experience elevation system. So there

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were once again three levels of service of bundle. And

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by the way, it doesn't have to be three. It

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could be four, it could be two, but uh, three

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happens to be the preferential number of levels. So the

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base level, once again, that core level that basically everybody

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else was doing, was weakly mowing basic edging, blowing, blowing, cleanup,

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and seasonal printing. And then the premium level, which he

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called the Property Enhancement, was everything in the base level,

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but also landscape design, consultation, seasonal color planning, plant health monitoring,

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monthly property reports, priorities, cleanup, and organic treatment options. Then

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he elevated it to what he called the Elite level,

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and he called it property transformation. Everything in premium plus

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quarterly design updates, outdoor living consultation, lighting maintenance, irrigation monitoring,

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water conservation program, seasonal staging, event preparation, and property value protection.

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He priced the premium level, which was that second level,

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at two and a half times base, and the Elite

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was five times the base. And what happened was forty

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percent of new customers chose elite that's the high end.

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Why because he wasn't selling lawn care anymore. He was

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selling pride of ownership. That's a customer experience, pride of ownership.

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But here's what really gets powerful that the cost to

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deliver elite was only twice that of the base. Everything

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else was pure profit and he wasn't. And he was

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charging for expertise, not just labor. And so let me

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share another example that this example proves his works in

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any industry. There was a dental practice that was struggling

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with their membership program. They happen to have a membership program,

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and like most practices, they offered basic cleanings and X

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rays for a monthly fee. But when they analyzed their

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patient data, they found that they something fascinating. They created

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Smile Journey packages and once again, this was a three

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three step package process. Number one being Essential Care, which

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was two cleanings, the early all basic, annual X rays,

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basic exam, and emergency business. The Optimal Health Step up

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package was everything essential plus four cleanings, yearly advanced screening,

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whitening service whitening that's a big add on there, priority scheduling,

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treatment discounts, and family plan options. And then his third

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package was a total wellness everything in optimal so everything

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in that second package plus quarterly cleanings, sleep apnea screening.

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That's really out of focus. I mean, we're talking about

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dentists here getting into sleep, nutrition consultation, monthly wellness check,

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cosmetic consultation, treatment financing, and concierge service. And the result

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was their membership revenue increased by two hundred and seventy

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percent in the first year and their patient's overall health

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improved because they were coming in more regularly. And this

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is what I mean by premium bundle formula. It's not

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about adding more services, it's about creating transformative experiences that

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your customers can't get anywhere else. And it generated a

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customer commitment level to these programs. And so the three

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critical elements of premium bundling is the expertise factor. Don't

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just bundle services, bundle your knowledge in consultations, assessments, and

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expert guidance. The convenience factor make it ridiculously easy for

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customers to say yes by handling all the planning, coordination

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and thinking for them. The status factor, which gives premium

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customers benefits that make them feel special like priority service,

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exclusive access, and VIP treatment. Those three things were critical

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elements of putting together premium bundling. And the key is

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understanding that people don't buy services, they buy better versions

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of themselves or their businesses. Let me say that again.

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The key here is understanding that people don't buy services,

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they buy better versions of themselves or better versions of

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their businesses. And let me share something that's even more

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powerful about premium bundles. An HVAC contractor completely transformed as

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business using seasonal solution stacks. So instead of selling standard

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maintenance contracts, he created year round packages once again for

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even though there's four seasons for three seasons, so it

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causes basic, the four seasons Basic, which is seasonal tune ups,

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filter changes, and basic maintenance. Again, probably it was it

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00:27:02.599 --> 00:27:05.799
was a it was a clone, an image of what

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the other competitors were doing. But then he had these

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step ups what he called Premium four seasons Premium, so

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you get everything in basic plus India indoor air quality monitoring,

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00:27:17.920 --> 00:27:20.519
smart thermost, smart thermos status so you could use your

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00:27:20.519 --> 00:27:28.400
phone to adjust the temperature, energy efficiency tracking priority, emergency service,

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and monthly systems analytics. And then his third step up

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was what he called four seasons Elite, so everything in

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00:27:36.880 --> 00:27:44.799
Premium plus humidity control, air purification, equipment, life extension program,

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00:27:46.000 --> 00:27:53.279
energy costs guarantees, comfort temperature guarantee, home comfort councierge, and

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system replacement credits. You know, when customers could see the

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entire year mapped out with these clear benefits and guarantees,

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00:28:02.200 --> 00:28:05.039
fifty five percent of them chose either the Premium or

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00:28:05.079 --> 00:28:08.640
the Elite package and revenue for customers increased by three

401
00:28:08.680 --> 00:28:11.160
hundred and forty percent, while delivery costs only went up

402
00:28:11.160 --> 00:28:13.839
by eighty five percent. Now, some of those services once

403
00:28:13.839 --> 00:28:17.440
again he had to farm out. I think it was one.

404
00:28:17.480 --> 00:28:20.559
I think was air purification. He had to get an

405
00:28:20.559 --> 00:28:24.680
air purifying company to do it, but the markup was there.

406
00:28:26.720 --> 00:28:29.319
And then he added future value credits, so for every

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00:28:29.400 --> 00:28:32.920
year customers stayed on the Elite, they earned credits toward

408
00:28:33.039 --> 00:28:37.319
future equipment replacement. And this solved two problems. It reduced

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00:28:37.359 --> 00:28:41.799
cancelations and it guaranteed future large ticket sales because they

410
00:28:41.799 --> 00:28:44.079
had these credits that were built up for a bigger ticket.

411
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And the customer retention went from sixty to ninety three percent,

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00:28:48.440 --> 00:28:51.559
and equipment sales doubled within eighteen months because everybody was

413
00:28:51.920 --> 00:28:56.279
using their credits to buy equipment, probably a little earlier

414
00:28:57.839 --> 00:29:03.200
then they then they had to. It's remarkable. So this, yeah,

415
00:29:03.240 --> 00:29:06.599
so this is this is the power of strategic bundles design.

416
00:29:06.720 --> 00:29:12.000
You're not just selling services, you're creating long term customer

417
00:29:12.039 --> 00:29:17.599
relationships that generate predictable revenue and profit. And so let

418
00:29:17.599 --> 00:29:22.079
me let me share another example, different industry. This is

419
00:29:22.119 --> 00:29:27.519
a computer repair shop that really transform their business by

420
00:29:27.519 --> 00:29:33.599
creating what they called technology success packages. And once again

421
00:29:33.680 --> 00:29:36.920
there were three. There were three packages. The Essential Care

422
00:29:36.960 --> 00:29:41.240
which is the basic again basic repairs, virus removal, data backup.

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Then what they call the step up was the Total

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Protection plan which included everything in essential. And notice how

425
00:29:49.319 --> 00:29:53.640
all of these packages, all these successful packages are including

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00:29:53.880 --> 00:29:58.440
everything that's in the basic, so that and everything that's

427
00:29:58.480 --> 00:30:05.799
in the previous level. And because it just increases the value.

428
00:30:05.880 --> 00:30:09.039
Because if you think the total protection is good, then

429
00:30:09.559 --> 00:30:14.440
the technology Transformation, which is the next package, which includes

430
00:30:14.480 --> 00:30:17.759
everything in protection, it's going to be just so much better.

431
00:30:18.480 --> 00:30:22.319
So once again, total protection is the second one where

432
00:30:22.400 --> 00:30:28.480
everything in essential plus remote monitoring, monthly maintenance, security updates,

433
00:30:28.839 --> 00:30:33.680
priority service calls, and data recovery. Insurance which was which

434
00:30:33.720 --> 00:30:37.039
once again was a program that was found out and

435
00:30:37.079 --> 00:30:39.680
then and by the way, that might be part of

436
00:30:39.720 --> 00:30:45.079
people's standard insurance policy. I don't I'm not sure. You know,

437
00:30:45.759 --> 00:30:49.200
it's a general liability policy for businesses. I don't know.

438
00:30:49.319 --> 00:30:51.279
I know that there's something to that in there, but

439
00:30:51.319 --> 00:30:54.880
I'm not I just could be an additional coverage on

440
00:30:55.079 --> 00:31:00.640
top of that Technology transformation everything in total protection plus

441
00:31:00.640 --> 00:31:07.799
equipment lifesile, life cycle management, technology, roadmapping, business IT strategy,

442
00:31:07.920 --> 00:31:15.240
Quarterly business Reviews, advanced cybersecurity, employee training, and digital transformation consulting.

443
00:31:15.960 --> 00:31:18.440
I think you should note too, that every time we

444
00:31:18.559 --> 00:31:23.119
do a step up, there's more things in it. If

445
00:31:23.160 --> 00:31:26.079
there was five things in the second level, there's six

446
00:31:26.200 --> 00:31:32.119
or seven things in the highest level. And their average

447
00:31:32.119 --> 00:31:34.480
customer value increased one hundred and eighty dollars to seven

448
00:31:34.519 --> 00:31:37.000
hundred and fifty dollars a month because they weren't fixing

449
00:31:37.079 --> 00:31:45.160
computers anymore. They were providing business technology solutions. So before

450
00:31:45.200 --> 00:31:47.799
I talk about another bundling strategy, we're going to take

451
00:31:47.839 --> 00:31:51.640
a ninety second break. Hey, their business owners, let me

452
00:31:51.680 --> 00:31:54.480
ask you something. Are you tied of blending in with

453
00:31:54.519 --> 00:31:58.880
your competitors? Frustrated with slow growth and slim margins. Well,

454
00:31:58.920 --> 00:32:02.160
I've got news for you. Everything you've ever learned about

455
00:32:02.200 --> 00:32:06.599
growing your business is wrong. But don't worry. I'm here

456
00:32:06.599 --> 00:32:09.240
to let you in on a secret weapon. Your position

457
00:32:09.480 --> 00:32:13.559
of market dominance. It's what sets you apart, makes you irreplaceable,

458
00:32:13.960 --> 00:32:17.440
and has customers lining up at your door. My name

459
00:32:17.480 --> 00:32:21.039
is Michael Barbarrita from Next Step CFO. I know what

460
00:32:21.079 --> 00:32:24.400
you're thinking sounds Greg Michael, but how do I find

461
00:32:24.400 --> 00:32:28.079
my position of market dominance? Well, that's exactly why we've

462
00:32:28.079 --> 00:32:31.920
created our game changing impleitation program called Next Step to

463
00:32:32.000 --> 00:32:35.440
Market Dominance. In just ninety days, we'll guide you step

464
00:32:35.440 --> 00:32:38.480
by step to a position of market dominance by uncovering

465
00:32:38.519 --> 00:32:42.039
your unique strengths that competitors can't touch, by crafting a

466
00:32:42.079 --> 00:32:45.759
message that resonates deeply with your ideal customer, by building

467
00:32:45.799 --> 00:32:48.519
a strategy that turns you into the go to expert

468
00:32:48.519 --> 00:32:51.880
in your field. Now this is in theory. These are

469
00:32:52.000 --> 00:32:55.200
battle tests strategies that have helped businesses like you as double,

470
00:32:55.279 --> 00:32:59.759
triple and quadruple their revenue. Don't let another quarter go

471
00:32:59.799 --> 00:33:04.400
by b struggling to standout. It's time to dominate your market. Period.

472
00:33:05.079 --> 00:33:09.160
Go to NEXTTEP CFO dot net forward slash contact. Fill

473
00:33:09.160 --> 00:33:11.880
out the form and in the message section put the

474
00:33:11.920 --> 00:33:16.079
word dominate or call us at seven eight one three

475
00:33:16.160 --> 00:33:19.680
two six three A two two. That's next Step CFO

476
00:33:19.839 --> 00:33:23.200
dot net forward slash Contact or call us at seven

477
00:33:23.240 --> 00:33:30.000
eight one three two six three A two two. Welcome back.

478
00:33:30.839 --> 00:33:33.119
And if you're if you're just joining us, we're talking

479
00:33:33.200 --> 00:33:36.519
about strategic value bundling. And by the way, I just

480
00:33:36.559 --> 00:33:39.039
want to mention my phone the phone number again because

481
00:33:39.039 --> 00:33:41.440
that commercial cut off at the last two, so it's

482
00:33:41.480 --> 00:33:45.160
seven eight one three two six three eight two two.

483
00:33:46.519 --> 00:33:49.279
So uh, if you're just joining us, we're talking about

484
00:33:49.400 --> 00:33:52.119
strategic value bundling. And now I want to show you

485
00:33:52.200 --> 00:33:55.359
how to create what I call solution stacks. These are

486
00:33:55.440 --> 00:34:00.000
bundles that solve multiple problems at once. So let me

487
00:34:00.079 --> 00:34:03.599
tell you about Jennifer who runs a successful IT services company,

488
00:34:03.640 --> 00:34:07.640
and like most IT firms, she's offering standard service packages

489
00:34:07.880 --> 00:34:13.000
monitoring and maintenance and helped US support. But she discovered

490
00:34:13.039 --> 00:34:18.559
something fascinating when she analyzed her client's needs. The biggest

491
00:34:18.599 --> 00:34:24.199
problem wasn't technical issues, it was business risk. So she

492
00:34:24.400 --> 00:34:30.840
created business protection stacks. So and that was what I

493
00:34:30.920 --> 00:34:35.320
call a solution stack. So she called it business protection stacks.

494
00:34:35.679 --> 00:34:39.079
And the first and once again there's three stacks. The

495
00:34:39.119 --> 00:34:42.800
first stack is the foundation stack, which is system monitoring,

496
00:34:42.880 --> 00:34:48.039
basic maintenance, helped US support, and even virus protection. Then

497
00:34:48.199 --> 00:34:53.039
she had what she called a business Community Continuity stack.

498
00:34:53.360 --> 00:34:58.519
That's a business continuity stack. So everything in Foundation plus

499
00:34:58.760 --> 00:35:06.880
disaster recovery, cloud backup, business continuity planning, security training, monthly

500
00:35:07.000 --> 00:35:12.719
risk assessment, and a quarterly strategy review. Then the step

501
00:35:12.800 --> 00:35:16.559
up to that was what she called an enterprise protection stack.

502
00:35:18.000 --> 00:35:23.000
Everything in continuity plus twenty four to seven monitoring, advanced

503
00:35:23.159 --> 00:35:32.360
threat protection, employee cybersecurity training. That was interesting, compliance management, technology, roadmapping,

504
00:35:32.599 --> 00:35:40.039
virtuals CIO services that's chief Information officer services, and quarterly

505
00:35:40.239 --> 00:35:45.000
board presentations. And here's what's powerful. She priced these based

506
00:35:45.039 --> 00:35:50.440
on business risk, not technical service. So the enterprise stack

507
00:35:50.599 --> 00:35:54.480
was priced at five times the foundation. So the third

508
00:35:54.559 --> 00:35:59.280
level was priced at five times the first level. And

509
00:35:59.320 --> 00:36:01.840
then but the delivery cost was only two and a

510
00:36:01.880 --> 00:36:05.000
half times more. And then the rest was pure profit

511
00:36:05.039 --> 00:36:07.760
because they were she was selling peace of mind, not

512
00:36:07.840 --> 00:36:14.199
just it services. And then a home improvement services contract

513
00:36:14.199 --> 00:36:18.519
that completely transformed his business, using what he called life

514
00:36:18.559 --> 00:36:23.280
stage bundles, so instead of selling individual services, he created

515
00:36:23.360 --> 00:36:28.280
packages based on life events. And these three packages were

516
00:36:28.320 --> 00:36:33.119
first what he called the new Home package, so it

517
00:36:33.199 --> 00:36:39.960
included deep cleaning, paint touch up, fixture updates, state the inspection,

518
00:36:40.440 --> 00:36:44.159
and home organization. That was the first level. By the way,

519
00:36:44.199 --> 00:36:49.320
he went one step deeper with paint touch up versus

520
00:36:50.360 --> 00:36:53.719
some of his competitors on that first level package. Usually

521
00:36:53.760 --> 00:36:56.800
the first level package is a clone of the competition.

522
00:36:57.840 --> 00:37:01.559
The next level up was Growing Family. Was called Growing

523
00:37:01.679 --> 00:37:08.519
Family Package, so that's childproofing, storage solutions, air quality upgrade,

524
00:37:09.079 --> 00:37:12.119
safe room creation, and monthly maintenance. So this was all

525
00:37:12.159 --> 00:37:17.960
about having kids. Then his next level up was Aging

526
00:37:18.039 --> 00:37:20.920
in Place, what he called the Aging in Place package,

527
00:37:21.719 --> 00:37:25.440
which included everything that was in the Growing Family package

528
00:37:25.519 --> 00:37:33.079
plus accessibility modifications, safety upgrades, smart home integration, monthly check ins,

529
00:37:33.280 --> 00:37:39.119
and emergency response system. So the result here is his

530
00:37:39.320 --> 00:37:42.159
average project value went from twenty eight hundred to twelve

531
00:37:42.159 --> 00:37:46.119
thousand because he wasn't selling home improvements anymore. He was

532
00:37:46.199 --> 00:37:49.840
selling life solutions. That's what we business owners need to

533
00:37:49.840 --> 00:37:54.559
focus on customer experience, life solutions. But here's where the

534
00:37:54.599 --> 00:37:58.440
real magic happens because the bundle stacking. This is when

535
00:37:58.440 --> 00:38:03.920
you create bundles that build on each other. For example,

536
00:38:04.320 --> 00:38:08.920
home evolution, so this is a home what it would

537
00:38:08.920 --> 00:38:12.360
be called a home evolution plan. Year one was foundation,

538
00:38:12.920 --> 00:38:18.920
basic updates, safety improvements, efficiency upgrades, once again a basic package.

539
00:38:19.039 --> 00:38:22.400
What the competitors offered. Year two we called the Enhancement,

540
00:38:22.920 --> 00:38:28.679
so he had style updates, comfort improvements, smart technology, thread

541
00:38:29.320 --> 00:38:35.960
was transformation, major renovations, luxury upgrades, custom features, and each

542
00:38:36.039 --> 00:38:40.239
phase built on the previous one, creating a clear upgrade

543
00:38:40.400 --> 00:38:45.480
path that kept customers engaged for years instead of months.

544
00:38:46.199 --> 00:38:48.760
And it was really the key to making all this

545
00:38:48.880 --> 00:38:53.400
work is understanding the psychological triggers that makes bundles irresistible

546
00:38:53.920 --> 00:38:58.920
beyond the general customer perception that bundles are compelling. There

547
00:38:59.000 --> 00:39:00.880
is a customer perception and that when you put things

548
00:39:00.880 --> 00:39:05.159
in packages and bundling, it is value. But we can't

549
00:39:05.159 --> 00:39:07.119
think of it like that. We got to think more

550
00:39:07.119 --> 00:39:10.960
of the psychological triggers than the customer experience that goes

551
00:39:11.000 --> 00:39:16.760
beyond the actual perception that bundles are compelling. So let

552
00:39:16.840 --> 00:39:20.800
me give you these five These five points the key

553
00:39:20.840 --> 00:39:25.639
to making all this work. So number one is progress monitoring.

554
00:39:25.960 --> 00:39:29.199
Show clear advancement from one level to the next step.

555
00:39:30.000 --> 00:39:34.440
So from one level to the next level, show clear advancement. Second,

556
00:39:34.840 --> 00:39:42.559
what we call future pacing, help customers envision their improved future. Third,

557
00:39:42.639 --> 00:39:49.039
rice reversal make higher tear bundles feel like the safe choice.

558
00:39:49.280 --> 00:39:54.559
Fourth is status evaluation, create exclusive benefits that make customers

559
00:39:54.599 --> 00:39:59.960
feel special. And then value stacking, adding elements that cause

560
00:40:00.199 --> 00:40:05.039
do little but mean a lot to customers. And so

561
00:40:05.159 --> 00:40:08.000
let me show you something powerful about solution stacks that

562
00:40:08.039 --> 00:40:12.480
most business owners completely miss. There was a commercial cleaning

563
00:40:12.480 --> 00:40:16.280
company that transformed their business by creating what they called

564
00:40:16.559 --> 00:40:23.440
healthy Workspace bundles. So this is commercial cleaning now, not residential,

565
00:40:23.599 --> 00:40:26.519
but it included a basic clean which was standard cleaning,

566
00:40:26.599 --> 00:40:33.280
trash removal, surface sanitation. Then they had a wellness protection

567
00:40:34.719 --> 00:40:40.480
everything in basic and then air quality monitoring, advanced disinfection,

568
00:40:41.199 --> 00:40:45.800
monthly deep cleaning, employee health protocols, which was something that

569
00:40:45.880 --> 00:40:52.400
was very creative contamination prevention, and then the total environment

570
00:40:52.559 --> 00:40:57.760
management package which included everything in wellness plus indoor air

571
00:40:57.840 --> 00:41:04.960
quality guarantee, allergen control, productivity optimization, sick day reduction, TAC tracking,

572
00:41:06.159 --> 00:41:13.119
health compliance, maintenance management, environmental certification, and monthly health metrics.

573
00:41:13.559 --> 00:41:17.400
Once again, you know, the first package started with three things,

574
00:41:17.880 --> 00:41:21.079
the next one went to five things, and then one

575
00:41:21.119 --> 00:41:26.199
after that went to seven things. So he's always adding

576
00:41:26.199 --> 00:41:30.639
the adding value as you progress up the stages of packages.

577
00:41:31.519 --> 00:41:34.679
Now their average contract value increased from twenty five hundred

578
00:41:34.679 --> 00:41:36.880
to eighty seven to fifty because they weren't selling cleaning

579
00:41:36.920 --> 00:41:41.440
anymore they were selling employee health and productivity just a

580
00:41:41.480 --> 00:41:51.000
different plant, and the real power came from result documentation,

581
00:41:51.079 --> 00:41:56.800
where every month clients received air quality metrics, contamination prevention statistics,

582
00:41:57.039 --> 00:42:03.519
employee sick day training tracking, productivity impact reports, cost savings analysis.

583
00:42:03.559 --> 00:42:08.119
This turned the commodity service into a strategic business investment

584
00:42:09.440 --> 00:42:12.480
and clients could see exactly how the service impacted their

585
00:42:12.480 --> 00:42:17.800
bottom line. So here's the key to making solutions stacks work.

586
00:42:18.840 --> 00:42:22.760
They must solve multiple problems simultaneously while creating measurable results.

587
00:42:22.760 --> 00:42:28.000
That every component should either solve an immediate problem, prevent

588
00:42:28.159 --> 00:42:35.000
a future problem, create measurable improvement, reduce business risk, and

589
00:42:35.239 --> 00:42:40.760
generate provable return on investment. When you bundle this way,

590
00:42:40.880 --> 00:42:45.800
price becomes totally secondary to value and customers focus on

591
00:42:45.880 --> 00:42:50.840
results rather than costs. And so let me share one

592
00:42:51.000 --> 00:42:55.840
final example before we go to compliments that brings all

593
00:42:55.880 --> 00:42:59.760
this together. So they're a financial advisor who is struggling

594
00:42:59.800 --> 00:43:06.000
to different differentiated services. Instead of selling standard investment management,

595
00:43:06.639 --> 00:43:11.719
he created legacy building solutions. Now once again, he had

596
00:43:11.760 --> 00:43:16.159
three stages of packages. He called the wealth Foundation, which

597
00:43:16.239 --> 00:43:19.880
is a basic investment management, basic financial planning, and an

598
00:43:19.880 --> 00:43:24.679
annual review. Then Wealth Acceleration, which included everything in foundation

599
00:43:25.639 --> 00:43:32.320
plus tax strategy, estate planning, business succession, risk management, quarterly reviews,

600
00:43:32.320 --> 00:43:36.119
and priority access. Then he stepped it up to what

601
00:43:36.159 --> 00:43:43.400
he called Legacy Mastery every everything in Acceleration plus what

602
00:43:43.480 --> 00:43:46.719
he called family office services, which is a higher level

603
00:43:46.719 --> 00:43:54.199
of investment for credited investors, next generation planning, philanthropy excuse me,

604
00:43:54.440 --> 00:44:03.519
philanthropic philanthropic strategy, business advisory, monthly strategy sessions, concierge sessions,

605
00:44:04.000 --> 00:44:08.760
and private events. His average client value increased from three

606
00:44:08.880 --> 00:44:13.519
thy to twenty five grand annually. Wow. Yeah, he hit

607
00:44:13.559 --> 00:44:16.199
a ninety eight percent retention rate with his customers because

608
00:44:16.199 --> 00:44:19.480
he wasn't just managing money anymore. Through these bundles, he

609
00:44:19.639 --> 00:44:24.239
was helping create generational wealth. You know, the key to

610
00:44:24.400 --> 00:44:28.480
understanding that every business, regardless of the industry, has the

611
00:44:28.679 --> 00:44:34.159
opportunity to create solution stacks that transform the transactional relationships

612
00:44:34.559 --> 00:44:37.880
into long term partnerships. And when you do this right,

613
00:44:38.599 --> 00:44:42.199
you don't just increase revenue, but you create predictable, sustainable

614
00:44:42.280 --> 00:44:47.159
profit growth. Remember, it's not about adding more services, it's

615
00:44:47.199 --> 00:44:51.840
about creating more value through strategic through a strategic combination

616
00:44:52.119 --> 00:44:57.840
and careful orchestration of your offerings. Wow, it's now time

617
00:44:57.920 --> 00:44:58.920
for compliments, Chicky.

618
00:45:00.000 --> 00:45:01.280
I mean just brilliant stuff.

619
00:45:02.159 --> 00:45:05.599
Took a lot of notes and I imagine, by the way, folks,

620
00:45:06.000 --> 00:45:08.920
as you digest all of this good information, if there

621
00:45:08.920 --> 00:45:10.960
are any follow up questions that you have, let us know,

622
00:45:11.119 --> 00:45:14.000
as Michael has provided some contact info. So, Michael, we've

623
00:45:14.039 --> 00:45:19.360
got a number of solid business complements spotlights that we

624
00:45:19.400 --> 00:45:22.400
want to highlight today. So and by the way, these

625
00:45:22.400 --> 00:45:26.119
are business owners coast to coast. The first is Christina

626
00:45:26.280 --> 00:45:34.440
and Kareem macsud with Macshue Productions. That's spelled Maak s

627
00:45:35.280 --> 00:45:39.400
Chu Productions, and they are a full service video production

628
00:45:39.519 --> 00:45:44.760
and animation company in Florida. They specialize in local business projects,

629
00:45:45.039 --> 00:45:49.320
really supporting small business and medium sized business owners. They

630
00:45:49.480 --> 00:45:52.880
both studied Get this, Michael, they both studied motion design,

631
00:45:53.880 --> 00:45:57.360
which yeah, right, I mean fascinating. It takes the principles

632
00:45:57.400 --> 00:46:01.119
of animation, graphic design and cinemata graphy and then they

633
00:46:01.239 --> 00:46:05.079
combine that to create really powerful pieces of content. And

634
00:46:05.360 --> 00:46:07.199
as a business owner, you could reach out to them

635
00:46:07.280 --> 00:46:12.480
to help move audiences literally to motion design and move

636
00:46:12.559 --> 00:46:16.519
audiences in your direction to the growth of your business

637
00:46:16.840 --> 00:46:20.119
their website mak sh.

638
00:46:21.159 --> 00:46:24.559
M ak sc hu dot com, maxew dot com.

639
00:46:24.639 --> 00:46:28.559
The next business owners Paul Stanley with Granted Bay Wealth Management.

640
00:46:28.920 --> 00:46:32.559
Paul was actually recently recognized on the list of Forbes

641
00:46:32.760 --> 00:46:36.679
Best in State Wealth Advisors. He's based in New Hampshire

642
00:46:36.719 --> 00:46:40.880
and this is really interesting Michael. From Paul, here's what

643
00:46:41.559 --> 00:46:43.920
he believes. One of his belief statements. We believe that

644
00:46:44.039 --> 00:46:50.599
achieving your financial goals requires diligent research, proper asset allocation,

645
00:46:51.199 --> 00:46:55.679
and the courage to stay on course in tough times.

646
00:46:56.679 --> 00:46:57.360
Not incredible.

647
00:46:57.719 --> 00:46:59.000
That is granted.

648
00:46:59.119 --> 00:47:04.599
Bayw is the website, so it's granted. Bay wm dot

649
00:47:04.719 --> 00:47:07.239
com is a website. The next business owner is Josh

650
00:47:07.320 --> 00:47:11.159
Harriet with Harriet Creative. This is a family owned and

651
00:47:11.199 --> 00:47:16.079
operated business since two thousand and eight. They are independent

652
00:47:16.320 --> 00:47:20.360
and professional in how they approach graphics design and they

653
00:47:20.400 --> 00:47:23.079
specialize in logos and publications and branding.

654
00:47:23.639 --> 00:47:24.719
I love this headline.

655
00:47:25.440 --> 00:47:29.519
Ideas made Visual is their headline and when you ask

656
00:47:29.679 --> 00:47:33.159
clients about Josh, here's a client say, Josh is talented,

657
00:47:33.320 --> 00:47:36.400
reliable and easy to work with. You can check them

658
00:47:36.440 --> 00:47:40.960
out at Harrietcreative dot com. And then the last business

659
00:47:41.000 --> 00:47:45.119
owner to spotlight in today's business compliments segments is Svan

660
00:47:45.559 --> 00:47:50.960
Gatte who's with Leader Trip Business Coaching. He's a certified

661
00:47:51.039 --> 00:47:55.360
coach and check out this belief statement from Svan. Every

662
00:47:55.519 --> 00:47:59.800
human being has been blessed with unique talents and abilities,

663
00:48:00.559 --> 00:48:04.079
and we all have excellence in us. People are naturally

664
00:48:04.199 --> 00:48:07.519
creative and resourceful. Think about all the items around you

665
00:48:08.079 --> 00:48:12.679
that were once invented by men and women who followed

666
00:48:12.719 --> 00:48:14.400
their passion and changed the world.

667
00:48:15.000 --> 00:48:17.199
This is what's been and his team believe right. It's

668
00:48:17.440 --> 00:48:18.159
really incredible.

669
00:48:18.719 --> 00:48:22.559
They bring together people to solve complex problems and provide

670
00:48:22.639 --> 00:48:26.679
new solutions. Great teams go far. You can check them

671
00:48:26.719 --> 00:48:31.039
out at leader Trip, Hyphencaching dot com. Michael, I'll toss

672
00:48:31.039 --> 00:48:31.639
it back over to you.

673
00:48:32.360 --> 00:48:35.639
Thank you, Chokey. I just want to close with giving

674
00:48:35.719 --> 00:48:40.320
specific action steps that our audience can start tomorrow of

675
00:48:40.519 --> 00:48:45.760
regarding bundle creation. So here is what I call the

676
00:48:45.800 --> 00:48:49.239
bundle creation formula. Step one is value discovery. Survey your

677
00:48:49.280 --> 00:48:52.440
best customers and ask what results are they trying to achieve,

678
00:48:53.400 --> 00:48:57.159
what frustrates them the most, what would make their lives easier,

679
00:48:57.280 --> 00:49:00.599
and what would they gladly pay more for. Step two

680
00:49:00.880 --> 00:49:04.280
is solution designed so create three distinct levels. A basic

681
00:49:04.679 --> 00:49:08.559
that solves the immediate problem, probably like the competitors or

682
00:49:08.679 --> 00:49:12.920
like you have now, second premium, which is prevent future problems.

683
00:49:13.400 --> 00:49:18.320
Third Elite, which is transform their situation. Then step three

684
00:49:18.480 --> 00:49:21.519
is value stacking for each level, add core services that

685
00:49:21.639 --> 00:49:26.440
solve problems, convenience factors that save time, status elements that

686
00:49:26.519 --> 00:49:30.440
make them feel special, expert guidance that provides peace of mind.

687
00:49:31.000 --> 00:49:35.519
And then step four price architecture use use what at

688
00:49:35.559 --> 00:49:38.800
the two five to ten formula. Your basic is your

689
00:49:38.840 --> 00:49:41.559
standard price, your premium, That second level is two and

690
00:49:41.599 --> 00:49:44.480
a half times to basic, and your third level is

691
00:49:44.679 --> 00:49:48.000
five times to basic. This will multiply your revenue two

692
00:49:48.519 --> 00:49:53.639
five and ten and step five marketing framework for each

693
00:49:53.679 --> 00:49:57.679
individual bundle clearly communicate the problem, it solves the results.

694
00:49:57.719 --> 00:50:05.320
It delivers unique benefits, removers and status enhancers. Ladies and gentlemen.

695
00:50:05.400 --> 00:50:08.119
To get a copy of the book Powerful Business Strategies,

696
00:50:08.159 --> 00:50:12.440
simply go to our website www dot NEXTSTEPCFO dot net.

697
00:50:12.960 --> 00:50:17.719
It's totally complementary and until next Monday at noon Eastern time.

698
00:50:17.800 --> 00:50:22.239
For Chucky Obio, I'm Michael Barberita, and remember, don't keep

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doing what your competition is doing.

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You have been listening to powerful business strategies, finding out

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that everything you ever learned about growing your business is wrong.

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Tune in next week and every week at noon Eastern

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time on W four CY Radio with your host Michael

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Barberita of Next Step CFO and moderator chugy Obio