Backend product profit systems explained…

Getting Started with Your Backend Strategy

A back end 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 a 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.

In our next post we will look at Conducting Surveys To Determine Backend Products/

Backend product profit systems explained…

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.

For instance, let’s suppose company A purchases Toyota Camry’s at $18,399 and sells them at $17,999. Company A thus loses $400 on the front-end sale. Meanwhile, other companies, which also obtain the cars at the price company A does, sell them at, say, $18,999. These companies thus technically make a profit of $600.

As people are more likely to purchase cars from company A, the others may justifiably complain that they are losing customers, and wonder whether the owners of company A were procuring cars at a lesser price.

Of course, company A, not being a charitable concern, is in fact making a profit. What company A is doing is concentrating on backend sales. Numerous extras, which would normally cost, say, $3,000 dollars are being offered with the car, for an extra price of, say, $1,400.

In this way, company makes a profit of $1,000, instead of suffering an apparent loss of $400. In addition, they can offer special discounts on finance, say 4% instead of 6%. This enables company A to build up a loyal clientele and ensure that the customers poached from other car dealerships would not be poached back by them.

You, too, can utilize backend sales and databases to make large profits.

In our next post we will look at … Getting Started with Your Backend Strategy.

Backend product profit systems explained…

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 different 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.

Backend product profit systems explained…

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.

For example:
Suppose you sell information products.

Assume that the selling price of your initial product (front-end) is $97, while its original cost price is $30. You run an advertisement for $600, which got you ten customers.
Your gross profit will thus be $670 ($97 X 10 customers) – ($30 X 10 customers), while your net profit will be $70 ($670 gross profit – $600 ad costs) for 10 customers.

Without having applied the ‘backend’ concept, your net profit would only have been $70 for 10 customers. However, if you offer these 10 customers with the backend product or service, which gets sold for $250 a few days later, and 30% of these customers avail it, you will make another $750($250 X 3 customers). Overall, you will make a profit of $820.

This is an example of how powerful the ‘backend’ concept can prove to be. Even if you do not make profit from your initial sale, you can make it up from your ‘backend’ sale.

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.

In our next post we will look at “The Importance of a Backend Strategy”.

Backend product profit systems explained…

Do you have a backend product?

Online or offline, regardless of what your business model is, there are profits to be made through offering backend products to your existing customers. These profits can be huge.

The backend marketing concept is little understood and used by many business owners. Most do not understand how important existing customers are in the big scheme of business. Often these business owners focus on getting new customers forgetting about those who have already proved themselves to be trusting enough to purchase the first time.

First let’s understand what the term backend products refers to. Once a first sale is made to a customer, any products offered after that point are referred to as “backend products”. Do not get these offers confused with up sells. Up sells are offers made during an initial offer. These offerscould be for a larger package or upgrades at an additional cost.

Backend products can be products and services of your own or the products and services of others. Which you can resell. After a certain time has elapsed after the first initial sale is when you can follow up with backend products. The time frame could be 1 day, 1 month or whatever time frame you decide upon.

In our next post we will look at why there is money in the backend…