Increasing Deal Size and Optimizing Profit Margins
Week 3 of the 90-Day Revenue Challenge
Hey Fraternity,
We’re three weeks into the 90-Day Revenue Challenge, and this week we hit an important milestone: Increasing Deal Size and Optimizing Profit Margins. It’s one thing to make sales, but it’s another to ensure those sales are driving real, sustainable growth for your business. This week, we broke down strategies to maximize every deal and boost profitability.
I kicked off the session talking about value-based pricing, a concept that many entrepreneurs overlook. It’s not just about pricing based on cost; it’s about what your product or service is worth to the customer. When you can shift from cost-based to value-based pricing, you open up the possibility of charging more because of the problem you’re solving. It’s a game-changer for how you position yourself in the market.
Brad jumped in to emphasize the importance of profit margins. He always says, "Revenue is great, but profit is what keeps you in business." We spent time showing how small adjustments in profit margins—sometimes just a percentage point or two—can have a massive impact on your overall revenue. After all, if you’re not optimizing your margins, you’re leaving money on the table.
One of the highlights of the conversation came when Brad talked about how McDonald’s revolutionized upselling and cross-selling with their Happy Meal strategy. By bundling multiple items together—like a burger, fries, and a drink—McDonald’s not only increased the average order size but created an irresistible offer for families. The Happy Meal wasn’t just about convenience; it was about upselling in a way that provided value to the customer while increasing revenue for the company. Brad pointed out how we can do the same in our businesses—creating bundled offers that solve multiple customer problems at once while boosting sales.
We also discussed how McDonald’s pioneered the simple yet effective upsell question, "Would you like fries with that?"—a small ask that has resulted in massive incremental revenue over the years. It’s a perfect example of how small, strategic upsells and cross-sells can have a big impact on your bottom line. This concept is something we can all apply to our own businesses: look for those small opportunities to add value and increase the total value of each transaction.
We also had a powerful conversation about tiered pricing. I highlighted how creating different levels of pricing for your products or services can appeal to different customer segments without complicating your offerings. The key is giving customers options that align with their needs while increasing your average deal size.
Finally, we touched on psychological pricing techniques—an area where Brad and I both agree on the power of perception. Whether it’s using charm pricing ($99.99 vs. $100) or anchoring higher-priced options to make mid-tier offers more appealing, small changes in how you present prices can have a significant impact.
What’s Next:
Looking forward, next week’s focus will be on Upselling and Cross-Selling to Drive Additional Revenue. This is where we’ll explore how to leverage your existing customers to drive more revenue, with a focus on making the most of what you already have.
If you haven’t yet, make sure to review the Pricing Strategy Worksheet from this week’s session. Start applying these principles to see how small shifts can bring major results.
Brad, myself, and the entire Fraternity team are here for you—helping you reach your next level. We’re excited to keep building on the momentum we’ve started.
Keep Scaling,
