Over time, many businesses accumulate products and services: offers added for one customer, products kept because they once sold well, services created to fill gaps. Some are highly profitable; others consume time and money while contributing little. Without regular review, the range grows more complex and less profitable.
A profitable range is deliberately shaped by evidence.
List every offer
Start by listing every product and service you sell. Include small add-ons, custom services and offers you rarely promote. Many founders are surprised by how many exist.
Measure contribution and effort
For each offer, consider revenue, gross margin, contribution, sales volume and the effort required to sell and deliver it. Some offers have high margins but sell rarely. Others sell often but earn little. Effort matters too: complex offers may require disproportionate time.
Classify your offers
A simple classification helps:
- Stars: high profit and strong demand. Promote and protect them.
- Potential: good margins but low sales. Improve marketing or positioning.
- Volume: strong sales but low margins. Improve pricing or costs.
- Drains: low profit and low demand. Consider retiring them.
Promote your stars
Make your most profitable offers easy to find and recommend. Feature them prominently on your website, in proposals and in sales conversations. Ensure everyone involved understands why they matter.
Fix or reprice low-margin offers
For popular offers with weak margins, review prices, direct costs and delivery processes. Small adjustments can turn volume products into meaningful contributors.
Before launching a new product or service, estimate its margin, contribution, demand and delivery effort.
Retire offers that drain resources
Removing unprofitable offers can feel uncomfortable, especially if some customers still buy them. However, simplifying the range frees time, reduces complexity and strengthens your focus. Communicate changes clearly and suggest alternatives where possible.
Design new offers with profit in mind
Before launching a new product or service, estimate its margin, contribution, demand and delivery effort. Ensure it fits your positioning and complements your existing range.
Use bundles and packages
Combining offers into packages can increase average order value and improve margins, especially when bundles include high-margin elements. Ensure packages remain valuable and easy to understand.
A practical tool: the offer matrix
Draw a simple grid with profitability on one axis and demand on the other. Place each offer in the appropriate square: stars, potential, volume or drains. Review the matrix every six months and decide on one action for each square.
Questions for each offer
Ask: Would we launch this offer today if it did not exist? Does it attract customers who buy other profitable offers? How much time does it take to sell and deliver? Does it strengthen or dilute our positioning? These questions help separate genuinely useful offers from those kept out of habit.
Common mistakes
Businesses often keep offers for historical reasons, promote products customers like without checking profitability, add services without calculating effort or fear simplifying their range. Others focus only on revenue rather than contribution. Regular review and deliberate decisions create a stronger, simpler range.
An example in practice
A small marketing consultancy offered over a dozen services, from logo design to social media management. Reviewing profitability, the founder found that strategy workshops and monthly advisory retainers generated most of the profit, while small one-off design tasks consumed significant time for little return. She retired several low-margin services, referred design work to a partner and focused marketing on workshops and retainers. Profit increased while workload fell.
Simplicity as a profit strategy
A smaller range is often more profitable than a larger one. It is easier to explain, easier to deliver consistently and easier to improve. Customers also find decisions simpler when choices are clear. Each offer you retire returns time and attention to the offers that matter most.