Case Study: $1M+ in Additional Profit for a Bodybuilding Supplement Brand
Back when we used to exclusively focus on our own brands, we used to have a bodybuilding supplement brand serving a niche of competitive bodybuilders.
In order to increase our marketing budget and compete with the leaders in the space, we had to take an innovative approach (yet we didn't want to give up equity via fundraising). Therefore, we opted for strategic partnerships and generated over $1M+ in additional profit.
What we mean by additional?
(Almost) passive recurring profit on top of the existing sales.
A couple strategic partnerships you can also leverage today:
#1: Leveraging Existing Assets
At the time, the supplement brand had ~3,500 paying customers with LTV of $500 from our products alone.
Now, with a few logical connections, there were a lot of possibilities to extend our value ladder WITHOUT having to invest in more inventory or product/course development.
What did bodybuilders buy BEFORE / DURING / AFTER using our product?
Usually, bodybuilding courses and coaching.
Our customers would anyways buy these products - and oftentimes they would make a wrong decision, and end up buying multiple products not fitting their true needs.
So, we would select the best products for our customers with the best guarantees and negotiate a commission on each sale with those companies.
Your customers would THANK YOU for offering them extra courses/products/services/apps that they need.
Because you're saving them hundreds of dollars and dozens of hours wasted on wrong decisions.
They are going to buy other products or services anyways before, during, or after using your product. And chances are, they're going to purchase the wrong product.
So, why not give them the best that is out there and become a trusted advisor for them?
And rather than relying only on your product, profit from introducing other no-cost and zero-time-commitment products that could end making you more profit than your flagship product.
And the best part? This is additional incremental profits that do NOT take a penny from your current sales. In fact, at the very least, these profits would increase the LTV, AOV, and subscription stick-rate of customers because they end up getting better results.
To put the numbers into perspective:
The bodybuilding courses often yielded on average ~$100 front-end commission per sale.
If we went extremely conservative where only 10% of the 3,500 paying customers bought the course, that would be:
10% * 3,500 = 350
350 * $100 = $35,000 in additional profit for ONE promotion in front-end sales
(and we could do 7 to 12 of these promotions per year WITHOUT burning our customers because we had a great relationship with them)
And often, because of our negotiation process, it's not only commission from front-end sales.
1. Commission from front end sales
2. (Sometimes Lifetime) Commission from any upsells or cross-sells the partner does with the customer we send them (potentially yielding an additional $70 to $350 per customer within 12 months)
3. An increased purchase rate of your own products (because people get better results, they get hyped, and then they want even better results).
4. A HUGE boost in 5-star reviews (remember? Everyone gets better results because now they're taking a holistic approach and are far more likely to talk about it)
5. AND, getting access to 1,000s of qualified customers from the respective partner (the partner has customers as well, remember?)
#2: Profiting Big-Time by Helping Non-Converted Leads
Then, this process is extremely efficient in converting non-converted leads to active buyers.
Someone signed up to your email list because they were at least somewhat interested in what you have to offer, BUT they didn't end up purchasing.
Often because it's not the right time now.
But... that doesn't mean they're not looking for other solutions to their challenges.
So, when you offer them different solutions to help them out, you could (and would) profit big-time from the non-converted leads that you already spent money on to acquire.
These are just a fraction of the strategies that market leaders use to... well... become and stay market leaders.
(Disclaimer: We want to be fully transparent that we are NOT very proud of this brand that we used to run.
Why? Because despite the supplement formula being SUPER effective and high quality. And users getting even more than the marketed benefits - after extensive clinical studies, we discovered that some of the ingredients in the formula had a potential to harm the user.
Within 24h of discovering this, we informed all our customers and then stopped selling the supplement despite the immense success we had with it.)
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