Step 1 of 6 · IMPACT Offering
How to choose the most profitable offering to grow.
Ask most business owners which product or service their marketing should push, and they'll name the one that brings in the most revenue. It's a reasonable answer, because that offering is what they're known for, it pays most of the bills, and the sales team knows how to sell it. But once you work out what each customer is worth after what it cost to win them, the answer often changes.
The offering worth growing is the one that earns the most profit per customer, has room to sell a lot more, and keeps customers coming back. In ProfitPaths® we call it your IMPACT Offering, and we find it by scoring each of your main offerings on six lenses: Interest, Margin, Potential, Attract, Competition and Tenure. This page walks you through that scoring with your own numbers, so your marketing ends up behind the offering that does the most for the whole business.
IMPACT Offering is the first step on this site because every step after it depends on the answer: you can't pick the right customer, channel or budget until you know what you're selling.
Your biggest seller is often the wrong one to grow
Here's how that plays out at a company where the answer seemed obvious.
A commercial contractor sells three things: new HVAC installations, annual maintenance agreements and emergency repair. Installations bring in most of the revenue, so they get most of the marketing budget, and nobody thinks to question it. Step through the three views to see what the leadership team found.
Showing size of each sale: Judged by the invoice, installations win easily.
per sale
Judged by the invoice, installations win easily.
This is how most marketing budgets get set: the biggest sale gets the most attention.
Installations are still a strong offering, and nobody should stop selling them. But maintenance agreements are cheaper to win, carry a higher margin, renew for years and feed the installation pipeline on their own, so building the marketing around them gives the company steady profit from the agreements plus a stream of installation projects that never needed an ad. That's what an IMPACT Offering looks like in practice: the offering that does the most for the whole business, which is rarely the one with the biggest invoice.
Before you score anything
First, find out which offering your marketing is actually selling today.
It's often not the one you'd guess. Pull the customers your marketing brought in over the last six to twelve months, group them by what they bought first, and put the gross profit each group earned beside it.
This check explains one of the most common and frustrating situations we see, where a company raises its ad budget and profit doesn't move. Ads tend to sell whatever is easiest to sell, which is usually the cheapest or most familiar offering, and often the one with the thinnest margin. More budget behind that offering buys more of the same low-margin sales.
A one-afternoon check
- List the customers marketing brought in over the last six to twelve months.
- Group them by what they bought first. First purchases show what your marketing is really selling.
- Add the gross profit each group earned, and compare it with the offering you'd most like to grow.
- Note where sales discounts to close. An offering that only sells with a discount is telling you something about its Margin and Competition scores, and it's worth knowing before you put more marketing behind it.
The IMPACT test
Score each of your main offerings on six lenses, from one to five.
Compare your offerings against each other rather than against an ideal. Here's what each lens asks, what answers it, and where that information usually lives in a company.
Score your own offerings
Click the dots to score each lens, and the total tells you where to start.
Use real figures wherever you have them, and where you don't, use your best estimate rather than skipping the lens. If an offering fails a hard limit (you can't deliver much more of it, a regulation or contract limits how you sell it, or the only buyers who want it are ones you can't reach), tick the box and it's left out.
Example These are the contractor's scores, so replace them with your own offerings to find yours.
Your likely IMPACT Offering
Maintenance agreements 25 of 30
This is the offering to build your marketing around, until it's growing predictably and the next one deserves attention.
Nothing you enter here is saved or sent anywhere.
The scores are only as good as the people in the room.
At a larger company, get finance, sales and operations together, because finance knows the margins, sales knows what buyers ask for and where you lose, and operations knows whether you could deliver twice as much. And don't let the leader of the biggest division score their own offering alone, since the largest line tends to rate itself highest on Interest and Potential and nobody wants to be the one to argue.
Judge margin after what it costs to win the customer
Two offerings with the same margin can cost wildly different amounts to sell.
Gross margin (the share of each sale left after the direct cost of delivering it) is where the Margin lens starts, but a product that needs a long sales cycle, several meetings and a big ad budget per customer can earn less than a lower-margin product people buy on their own. So compare gross profit per customer after the cost of winning them: the average sale, times the gross margin, times how many times a customer buys over their life with you, minus what it costs to win that customer.
Example These are the contractor's numbers, so replace them with yours to compare your own offerings.
This counts profit from the offering itself. Follow-on purchases (like maintenance customers who later buy an installation) belong in the Attract and Tenure scores above. Nothing you enter here is saved or sent anywhere.
If you don't know what it costs to win a customer for each offering, that's a gap worth closing, and the tracking setup on the Channel Selection page shows how to close it.
Pick one, and know when to change it
Grow one offering at a time.
A budget split across everything you sell rarely gets any single offering to the level it needs to grow, and messaging written for everything ends up persuading nobody in particular. Once your IMPACT Offering is growing predictably, add the next one. These are the rules we use to make the choice, and to know when to revisit it:
- Pick the highest total, unless that offering fails a hard limit.
- When two offerings score close, favor the one that's stronger on Margin and Tenure, because those two lenses decide what each customer is worth over time and they're the hardest to change later.
- Rescore when something real changes: your costs or prices shift, a competitor enters or leaves, your delivery capacity changes, or your IMPACT Offering has grown enough that the next one deserves attention.
- Don't rescore every quarter out of restlessness. Marketing built around an offering needs time to work, and switching focus resets everything your ads, content and sales team have learned.
What doesn't work
Five ways companies pick the wrong offering.
- 1Choosing by revenue.
The biggest line gets the budget because it's the biggest, even when it's the most expensive to sell and the least likely to bring customers back.
- 2Choosing the newest or most exciting product.
A new product tends to score high on Interest inside the building and low on everything else out in the market.
- 3Promoting everything equally.
It feels safe, and it all but guarantees that no single offering gets enough attention to grow.
- 4Ignoring delivery capacity.
Marketing something you can't deliver more of creates backlogs, unhappy customers and wasted spend.
- 5Leaving finance out.
Without real margin figures the Margin lens turns into a guess, and guesses tend to favor whatever already sells the most.
At every size
The scoring works the same way, but the hard part changes with the size of your company.
If you run a smaller business
You probably have two to five offerings and a good feel for which ones make money. You can score them yourself in an hour with your accountant's margin figures beside you. Your biggest risk is spreading a small budget across everything, so commit to one offering long enough to see whether marketing it pays.
If you lead marketing at a larger company
The hard part is the data and the politics. Divisions often calculate margins differently, overhead is often allocated in ways that hide which lines are profitable, and every product leader will make the case for their own line. Ask finance for contribution margin by product line (revenue minus the costs that rise and fall with each sale), score it with finance and sales together, and take the result to leadership as a portfolio decision about where the next marketing dollar earns the most.
Questions we hear about this step
- What Is a Good Profit Margin for a Product?A good profit margin for a product is one that leaves profit after what it costs to win and serve each customer, judged per customer rather than by percentage, so no single margin is good for every product.Read the answer →
- How Do You Calculate Break-Even ROAS?To calculate break-even ROAS, divide 1 by your profit margin as a decimal, using gross margin minus any other costs that rise with each sale, and any ROAS below that number loses money on the first sale the ads bring in.Read the answer →
- How Do You Calculate the Profitability of a Customer?To calculate the profitability of a customer, multiply their average yearly revenue by your gross margin and the years they stay, then subtract what it cost to win them, and run it for each type of customer to see which buyers are worth the most.Read the answer →
- What Is a Good ROAS?A good ROAS is one comfortably above your break-even ROAS, which is one divided by your margin after the costs that come with each sale, so it depends on your margins and repeat buying rather than an industry average.Read the answer →
More on choosing your offering
Guides that go deeper on choosing, pricing and positioning the offering you grow.
They're in progress and will be linked here as they're published.
Growth Strategy: Getting Past the Current Stage
For when you've stalled and need to decide where the next stage of growth comes from.
Go-to-Market Strategy for Mid-Market Companies
For when you're launching an offering or taking an existing one into a new market.
- Profitable Growth: how to grow revenue without giving the margin back. coming soon
- Breaking Through a Growth Plateau: why growth stalls at each stage, and which lever to try first. coming soon
- Value-Based Pricing: how to price your IMPACT Offering on the value it creates for buyers, instead of discounting to close. coming soon
- Brand Positioning: how to make your offering the obvious choice for the buyer you want. coming soon
- Messaging Framework: turning your positioning into words your sales team and ads can use. coming soon
- Competitive Analysis for Marketing: finding where competitors are weak, which is the Competition lens in practice. coming soon
- Win-Loss Analysis: learning from the deals you lost as well as the ones you won. coming soon
- Jobs to Be Done: understanding what customers are trying to get done when they buy. coming soon
- Voice of Customer Research: gathering the customer evidence behind the Interest and Attract lenses. coming soon
- Contribution Margin for Ecommerce: working out margin per order once shipping, returns and ad costs are counted. coming soon