Sustaining a Business Through Backend Sales07/07/2018
No matter what type of business you are in, or whether you market your products online or offline, the backend offers are the ones which determine whether you are going to make marginal or staggering profits. Many business owners seldom realize how important reselling their existing customers is. They solely focus on acquiring as many new customers as possible. They fail to understand how revolutionary the backend sales concept is.
We must keep in mind that a ‘backend’ is different from an ‘upsell’, and not confuse the two. The products or services you provide your customers with after the initial sale are referred to as ‘backend’. These products and services can be your own as well as of others, which you will be reselling. Usually initial sales are followed by backend offers after a certain time lapse. On the other hand, the additional products and services that are offered to customers while selling something and before the sale has been completed is known as ‘upsell’.
Why Is The Money In The Backend?
The reasons why applying the backend concept in your business can ensure unlimited profit are as follows:
- There will be no customer acquisition cost, as you will be selling to customers you have already acquired.
- You can cash in upon your goodwill. If you have properly established a firm relationship of trust between you and your customer, as general statistics show, about 35% of your customers will purchase from you again.
The backend concept can really help you to raise your profit margin by several notches. Keep supplying your existing customers with additional product offers, as money really lies in backend sale.
The Importance of a Backend Strategy
When you start peddling information products on the Net for profit, you’re likely to think that you need to create many and varied items for the various niches. But you’ll find that you need to take an approach that is going to leverage your lists of products when anyone buys any of those products. Say you’re selling to other Internet traders. Suppose your product deals with ‘finding the right niche’. Next, you need to develop a backend product which is related to your front-end product, be it an accompaniment or complementary. Then, when this second product is ready, announce it to your list of existing customers, who have already brought your first product. If they liked it, they’re very likely to purchase the new product, which is likely to suit their needs as well. In fact, the saying, “there’s gold in the list” is often used to refer to the many marketers who have built vast fortunes and created multi-million dollar empires by selling, not similar things to different customers, but different things to the same clientele.
You need to do several things: Firstly, you need to keep every customer for life. Even if a $0.05 click-through can procure you a paying customer, it’s more desirable, evidently, to make a $10.000 profit off him/her over the years rather than a one-time $47 profit. You should also create an efficient backend strategy for your information products which is tailored to your customers’ needs. Pick their brains without letting them know that it is simply for product-creating. This should actually be rather easy. People like being asked for their opinion—creating a poll or questionnaire and mailing it to your list should garner you a lot of information about what your customers want. And while your follow-up products are being created, continue supplying questions and/or useful information to your clientele, so they don’t feel used.
You needn’t constantly send them sales-pitches. Once their names are added to your list, start sending them some bits of helpful information that they can access for free. Once they’ve begun to somewhat trust you, and you’ve proven that you’re working in their best interest, they’ll not mind buying from you again and again. If you’ve gained the trust of your clientele, they’ll help you profit over the years. You merely need to discover what they want and over-deliver with the products you create for them.
Taking the Advantage of Backend Selling
It’s odd that many companies don’t focus on building a database and taking advantage of backend sales. There are, of course, countless examples of the value of building databases: Google, for instance, bought Youtube for $1.6 billion. It is extremely important to maintain and update your database to let your clients be aware of what special promotions you are offering and to keep them forever aware of the existence of your business. Having a good relationship with a large clientele is one of the biggest assets of any business in these consumer-oriented times. Besides, though most companies focus on front-end sales, the backend is where the most money is to be made. Your database means you can constantly market new products to your clients, allowing them to effortlessly upgrade, and expand your business further.
Backend sales are all about adding value to your clients’ purchases and persuading them that their main, front-end purchase would be much improved if supplemented by a number of backend purchases. If you market your backend good well enough, you can make a large profit even while seemingly offering the front-end product at a much cheaper price than other businesses.
Getting Started with Your Backend Strategy
A backend product is what you sell your after you’ve sold your main product. Building a business requires acquiring new customers. However, that is expensive since marketing costs have to be raised to attract new buyers. According to research by Fortune magazine it’s easier to sell a product to an old customer than to a new one since buyers are always apprehensive in their first purchase. An old customer trusts you and this enables him to buy other products from you. A foundation is created on whose basis you can introduce new products to the customer. This enhances their Customer Life Value and brings greater returns on your marketing investments.
While determining your back-end product, remember to keep it compatible with your main product. If you select an inconsistent product the customers will feel that you lack expertise and this can damage the customer’s confidence in your main product also. If you are undecided then you can always ask your customers’ opinion regarding different products. Your customers will appreciate the gesture and your survey will bring you valuable information.
How to Increase Your Backend Profits Quickly and Effortlessly
If you are selling a product and making profit on the front-end, without any attention to up sells or other forms of backend profits, chances are, you’re missing out on a lot of profit as well. Fortunes can be made by selling backend products to customers eager to devote time and money to their interests. Basically, suppose you’ve already sold a product to a customer and then give them a link to a page where they can access it. Now, instead of linking them straight to that page, you can create an up sell that shows the customer a one-time offer, which can also be called a backend sell. So, while a front-end sale is your main product, anything you sell the customer who has already bought it is a backend sale. Increasing the backend sale can greatly increase profit.
When you create a product, realize that you can make more than one sale to the potential customer. Anyone who’s making one online purchase is likely to make two. Many people go wrong while offering the customer extra products. You have to ensure that the extra you are offering is connected to the front-end product. For example, if you are selling information about generating revenue with free traffic, as your front-end product, then the backend product must also be about generating traffic. Another thing you can do to increase backend profits is have an extra offer on the download page itself. This way, when the customer visits the page to download his/her purchase, he/she will notice the product. Offers placed on the download page need not be as connected to the front-end product as those placed on an up sell. This lets you advertise any product.
Another method to increase backend profits is to simply request the name and e-mail address of your customer. Having obtained this information, you can mail him/her catalogues, or simply notify them about your products via email. While this sounds obvious, a number of people fail to do it. This is a good method of increasing our backend profits as it helps you build a relationship with your clientele and forge a loyal customer-base.
These are simply a few basic tips to get you started. Once you settle down and think of more ways to increase backend sales, you are likely to find that your profit margin has increased considerably.