Does My Back-End Look Big In This?

Do you want to hear a secret? Something that high-
priced gurus would charge you a fortune for?

Okay, I'll tell you, but only if you promise not to
spread it around. This is how the big players make real
money on the Internet.

It is called selling to your back-end. Does that sound
painful? Well, believe me, learn about this and you
will feel no pain.

The term 'back-end products' is jargon that simply
means selling additional items to existing customers.

The traditional mail order business, and more recently,
Internet selling, depend largely on the power of
leveraging (that magic word) existing customers to make
maximum profits.

How does it work?

The first point is that there is no rule that says you
have to have back-end products. There are many people
online who sell a single product and make good money at
it. But, in truth, they are wasting a valuable
resource, and making a lot more work for themselves, as
we shall see.

Let's look at two examples of how back-end selling
works well online.

There is a lady I know online who sells a fantastic
topical cream that helps eczema sufferers. She spends
time and money targeting her advertising to the right
audience so that she can sell as much cream as
possible. But she is a one product company. She only
sells that one cream and has no plans as yet to
introduce bnew products.

What is her back-end?

More cream. Everyone who buys becomes part of a new
'super-targeted' audience. She can email them special
'repeat purchase' offers at virtually no cost to her.
So she makes these existing customers feel special by
giving them great cost savings - and ends up making a
higher profit-per-customer than she would have done
otherwise. Along the way, these 'super targets' also
recommend her to their friends and family, so she makes
even more sales.

That system works for her because she sells a
consumable product, that really works, and is not
available elsewhere.

But what about one-off purchases that do not have a
repeat function built in?

As a second example, let's suppose you want to sell
information products, or ebooks. Having created your
first book, take a moment and think how you can expand
it to add interest to the type of people who would buy.
Perhaps a special report, another book on a related
topic, a video, a member's site - the list is almost
endless. Only after you have created this second-string
product should you launch the first one.

How might this work in practice?

In order to sell anything on the net, you need to
invest some money. Don't believe the people who tell
you that it can all be done for free. it can't. Maybe
you need less to start up a business online than in the
'real world', but you still need some seed capital. You
need money for search engine positioning, money for
advertising, web hosting, domain names and so on.

If you are clever and well advised, you will waste as
little of your cash as possible. But, spend you must.

Suppose you spend $500 and you get 5,000 targeted hits
to your web site. If you have written a really good
sales letter and have a clear message, you might be
very lucky and convert 3% of the visitors into sales
(very lucky!). That would mean that you sell 150 items
and each sale has cost you $3.33.

If your ebook sells for $9.99 you are looking at a
healthy 200% profit.

Now, here comes the magic.

You have not just created 150 happy customers, you have
also created a list of 150 'super-targets'. People who
have shown themselves to be predisposed to buy from
you.

The next step is to send them an email saying that as a
valued customer, you would like to make them an
exclusive special offer - a prelaunch special deal on
your new ebook - instead of the normal price of
$24.99,which it will cost when it goes on general
release, they can order it right now for just $17.97.

Your conversion rate against these super-targets should
be much higher than before. Perhaps as high as 20%. So
you may sell 30 copies and gross $539.10 from these
customers that you would not have otherwise got.

At zero advertising cost!

Instead of making $1,498.50 for your $500 investment,
you have made $2,037.60. 308% return on investment
instead of 200%.

And that is just the beginning, because you now have a
loyal following to pre-sell your next product to - and
the next.

The lifetime value of your select band of 'super-
targets could be enormous.

I have done a lot of mail order marketing in my time (I
worked in the advertising industry for 25 years) and
have seen back-end marketing make companies millions. I
even did it myself when I ran my own mail order
company. We advertised a 'free' bottle of aromatherapy
oil, which customers just paid carriage on. Thousands
responded. We then sent a sales letter with every free
bottle selling a great value pack of 6 oils. That sold
a lot. Then every customer got a regular order form
with additional products on it.

It worked well, and everyone was happy, but believe me,
it works even better on the Internet. Repeat contact of
customers (often called relationship marketing) offline
still carries a considerable cost - paper, printing,
envelopes, postage, fulfillment.

Online, all of these cost just melt away.

Leaving you with that lovely, cuddly six-letter word:
PROFIT.

So to answer the original question, yes, your back-end
does look big.