Most entrepreneurs think profitability and immediately think minimize collection costs and uncollectible accounts, unbillable bench time and minimize office space rent — you know, cost-saving measures. Heck, most financial professionals do the same thing.

I’ve been working with service based entrepreneurs for a handful of years now and I’m here today to once again affirm that marketing plays a role in boosting profitability too. I’ve also spent years learning how to improve the profitability of my own strategic marketing consulting firm.

Now, don’t get me wrong, I’m all about employing cost-saving measures, but there’s another component at play.

So, how do you boost profitability? Take these three steps and get everyone on your team aligned around the search for answers.

1. Understand how to choose your customers and not the other way around

One of the most important elements of boosting profitability for a service based business is understanding the make up of your ideal customer. Effectively, understanding who makes an ideal customer allows you to build your entire marketing, sales and service efforts around attracting and converting this customer group.

Next you should start analyzing the common characteristics they share. Start asking yourself or your customer facing employees some questions about these people: what age, sex, illness, income, and particular area of town are they? what industry are they in?, where are they located?, what size is their organization?, what do they read?, what do they listen to?, what challenges do they face?, how do they buy? and most importantly what triggers them to start looking for a solution?

This information is the secret to unlocking massive profitability. Most service base businesses have a need triggered soon by some type of life or business cycle change, married, children, divorced, birthday, illness, pay raise, calendar event, budget refresh, office relocation, etc. (Hint: focusing on identifying what these triggers are with your current clients is the best way to immediately grow share of wallet.)

The answers to the questions above are not always available, but thinking about them in correlation to your ideal customer will allow you to boost profitability.

2. Offer some unique and desirable element that can’t be compared

Until you can firmly offer a solid reason for why a prospect should buy from or hire you over the competition, you’ll compete on price or shall I say a decrease your profitability.

When service based businesses solution sell and respond to RFPs they basically make every business look the same and make price the primary issue.

Working with your marketing/sales team or a strategic marketing consultant can help identify what service or product element really nails the buyers pain-point or desire. Working together marketing and sales efforts can communicate a unique way of doing business that will demonstrate a premium pricing value proposition.


  • First Responder Cleaning. There are very few one-of-a-kind commercial cleaning services. They offer a 30 minute response time.
  • Punctual Plumber. We’re on time — offers to pay commercial customers $5 for every minute they’re late up to $300.
  • Attorney’s are notorious for not returning phone calls in a timely manner — one attorney offers a Return Call Guarantee. If clients’ calls aren’t returned in one business day, they’ll take $500 off the client’s next invoice.
  • Contractors frequently overbid projects and rely on the power behind their license as a justification — Guarantee your work to pass Building and Safety inspection or you will fix it for free.
  • Customer support don’t really care if you find a solution or not — offer a No Hang Up Guarantee “We don’t hang up until you’re happy”.
  • Marketing agencies and firms known for unclear deliverables, lack of results and using jargon — one marketing firms offers a very detail “proof of concept” with a set project price, clear deliverables, a results review and education process.

3. Make keeping customers your new profit center (Upsell and Cross Sell)

Did you know that it costs five times as much to attract a new customer, than to keep an existing one? The first rule of any business is to retain customers and build a loyal relationship with them, and thereby avoid customer acquisition costs.

Moreover, let’s not forget that a customer’s needs grow and evolve with time. A smart business anticipates that and welcomes an opportunity of increased profits.

Upgrading to a better, costlier service offering or switching to a long-term (e.g., annual) payment plan are all options you can explore when dealing with long-term customers.

How you can use it: Can your customers benefit from a product or service closely related to what they are already using? Or might they be interested in an upgrade that costs more but represents better value with respect to their needs?

Real World Business Examples:

  • A $3 car wash offers a $14.95 monthly unlimited car wash membership
  • McDonald’s employees always offer you a drink or some waffle fries with your purchase.
  • Medical practices offer nutritional supplements, protective products, and health action plans.
  • IKEA will soft-sell delivery and furniture assembly as additional services. Indispensable Marketing will offer you a digital and graphic design service management with your marketing plan project.
  • Gyms thrive on offering annual or even lifelong memberships.
  • Online marketers earn more by creating enhanced, premium versions of their content.
  • Financial institutions like credit unions and community banks will offer a savings account along with your checking account.

The theme here is that increasing profits is a direct result of improving the variables that ultimately determine your level of profitability. When you improve these variables about your business you will increase profits and affect your bottom line.

NOTE: I intentionally focus on the word “profitability” in the title of this post because I see so many service based businesses working hard just to sell — increase revenue. There is a much better approach, but it requires a shift in thinking about marketing in general and I hope this post will shed some light on an approach to profit.