The Money Is In Your Back End!

Have you ever stopped to wonder why some businesses struggle along barely making a living for the owner while other businesses thrive and prosper and create great wealth for their owners? The answer may well be in the BACK END.

Most Small Business owners are only focused on their FRONT END which is the acquisition of the next new client. They fail to see the full profit potential in their BACK END.

Just for the sake of definition ... FRONT END is the first sale you make to a new customer and the BACK END is every additional sale you make to that same customer. The real profits in your business is in the BACK END sales you can make to your customers.

Marketing consultant are often called in to Small Business to help them with their marketing strategy. In nearly every case the business owner wants to focus on how can we get more new clients. My questioning always leads them to ... 'How can we maximise the VALUE of each of the existing clients?'

You see ... it is FIVE TIMES more expensive to find the next new customer as it is to make additional sales to your existing customers. If that is the case then BACK END sales are far more PROFITABLE!

Lets consider the example of a Bed And Breakfast marketing for new customers. The vast majority of them are busy marketing for new people to come and spend a weekend in their BnB. Very few however spend any time attempting to get past customers back again for additional weekends which would be easier and more profitable for them.

A personal trainer invests their money into running ads in the local paper to find new clients. They work with them for 4 weeks and then for whatever reason the client drops off. Instead of maintaining the relationship with the client (and offering them additional products and services) they only focus on getting the next new customers in the front end.

A Life Coach provides a free coaching session and if that goes well books the new client into 3 paid coaching sessions. Beyond that though there is typically no business model to lead customers through. There is no additional products or services of increasing price value to lead the happy customers to.

As I said before ... the real money in your business is in the BACK END. You need to sit down and ask yourself the question ... 'Once I have a new customer what are all the additional products and services that I could provide to them?'

Here are a few ideas to help you develop your BACK END:

1/ Turn Products Into Services - If your front end is a product look for ways that you can then turn that product into a service. Take the car industry for instance ... they sell you a car (product) and then if they are smart marketers they then sell you car servicing (service). Most of the money they make is in servicing your car.

2/ Turn Services Into Products - If you provide a service as your front end then look for ways you can productise the service. For example .

3/ Third Party Products - Look for third party products that you can access to sell to your customers. If you were running a Bed N Breakfast for instance you might organise tickets to the theatre or horse racing events that you then on-sell to people coming to stay in your BnB. These additional sales require no extra investment of time and money to create.

4/ Upsell -  We have all had the experience of ordering at a fast food venue and being asked ... 'Would you like fries with that?' ... BUT have we taken that idea and implemented it into our marketing? How can you upsell your customers once they have made a YES decision into higher dollar value purchases or additional purchases that compliment their original purchase?

5/ Back End Ascension - The most effective BACK END strategy is to use what is known as ASCENSION. This is where you structure your back end offerings in ever increasing dollar value. So the first product / service in your back end may be a low dollar value offer, the next a mid price point offer and then a high dollar value offer. The key is to always lead your customers to the next offer in your back end of ever increasing value. Not all of your customers will come all the way through your offers but enough will to make it extremely profitable for you.

Now I want to let you in on a secret that is known by those businesses that are highly profitable ... often times they will lose money (or break even) on their front end sale. Why would they do that? Well its simple really ... to acquire a new customer that they can then lead through their back end where the real money is.

Most people make the mistake of thinking that the purpose of finding a customer is to make a sale. They are wrong in their thinking. What they should be thinking is ... the purpose of making a sale is to find a customer. Think about the logic of that. The first sale is designed to have customers enter your marketing funnel where you can then make subsequent and numerous back end sales to. In a lot of cases you will see business owners prepared to just break even on the front end sale. In other words they are willing to invest all of the potential profit from the front end sale to find the customer.

So here is what you can do to apply this in your business:

1/ Start to think of your business as being a front end and back end business.

2/ Map out all of the possible back end products / services you can offer.

3/ Structure your back end products / services so that they ascend upwards in dollar value.

4/ Develop a systematic approach to leading your customer from the front end sale through all of the layers in your back end.

5/ Implement your back end system into your business.

6/ Test and measure the results and adjust accordingly.

If you can see the value in developing your BACK END then you will want to allocate some time in your schedule to sit down and map it out. You may also want to grab a copy of the Attraction Marketing System for more details on setting up your marketing system.

Sheree Montgomerie

INNERGENIUS

http://smallbusinessmarketingcd.com