July 19, 2023

Profit Profiles

Marketing investment is directly related to the profit profile of the customers buying from the marketing channel.

For instance, say the customer pays you back as follows in years 2/3/4/5.

  • $22.00.
  • $17.00.
  • $14.00.
  • $11.00.

When that happens, you can lose A FORTUNE generating the order ... you get $64.00 of profit downstream and the profit is spread out over time, allowing healthy payback well into the future.

This profile is different.
  • $33.00.
  • $14.00.
  • $11.00.
  • $6.00.

Here, you also get $64 of profit. But the profit happens in year two. If you lose too much money right out of the gate, you don't get the long-term payback you need.

Then there are situations that look like this.
  • $8.00.
  • $5.00.
  • $3.00.
  • $2.00.

This is a profit profile that requires strict discipline. You don't have sufficient long-term customer value to be sloppy. You must be a precise, effective operator to have any chance of running a successful brand. These brands need spectacular customer acquisition programs that bring in organic traffic at virtually no cost. These brands have no choice.

Know what the profit profile of every marketing channel looks like. Then use the profile to your advantage in your Marketing Budget Experiments!

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