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Mar 29

Master Back-End Marketing

Back-end marketing is one of the most important elements of business success. In fact, I view it as the real core of the business. I see too many people putting all their emphasis on front-end marketing, which is illogical. First of all, it’s difficult to make any kind of profit on the front end. You can, but it’s not the norm, especially not in the modern business arena. The real money comes from doing more business with the customers you already have; that’s going to make you rich. So unlike many of your competitors, you should put most of your focus on back-end marketing.

Let’s simplify the back end, especially for all of you just starting to understand what this whole marketing thing is all about. A “back end” is something additional that you sell to a customer you’ve already converted. Actually, it’s a whole bunch of somethings additional, because the goal is to attract the best people as new customers and then continue to sell to them again and again. Every time you resell to an established customer, the profits can be higher and higher. The expense lies in getting that new customer initially, so the goal is to bring in as many new customers as you can, and resell them all the products and services you can.

It sounds like a daunting task, but it’s fun — and that’s the thing that many business people just don’t realize. When you have an existing group of customers who already know you — who trust you, whom you understand intimately — then trying to decide what products and services to sell to them becomes much easier. Because you’re focused on them, instead of being confused about what to sell, your only real challenge is this: what are the few things I can sell that will produce the highest profit? Your decision-making becomes easier, and it’s easier to develop products and services for people you really care about. And you should care about them, because they’re the people paying your bills. They’re giving you money, financing your dreams, and helping pay for your financial goals. So you’re really reaching out as one friend reaches out to another, trying to give it all you’ve got.

Once you create a customer, it’s easier to go back and sell to them because you already share a relationship. You can take the same promotions you’re sending to new customers and, without changing a thing, you’ll get at least double the response from your best customers. Sometimes you’ll get as much as 10-20 times the response, because when people trust you, they’re more open and receptive to giving you money. The biggest challenge of new customer acquisition is the fact that they don’t yet trust you, so they’re less apt to do business with you. The good news is that once you do have customers who have already done business with you once, they’re likely to do business with you again.

That’s where the passion lies in doing business for me, because that’s where the real business is. The front end is a necessary evil; I call it an “evil” because it’s difficult to make money with it. Oftentimes you don’t make money at all — you actually go negative on the front end. You can spend a lot of money on the front end, hoping to get a customer, and it simply may not develop the way you want it to.

I became a reverse millionaire a few years back because I got too aggressive — and that was a lesson I had to learn just once. I wasn’t watching my numbers carefully enough; I was spending far too much money on every new customer I was bringing in, and it got to the point where I couldn’t pay my suppliers, I was having trouble meeting payroll, and I was having to go talk to bankruptcy attorneys just to explore my options. I was drinking milk and eating crackers, because that’s all I could handle. But most people are pushing at the other end. For every crazy and wild entrepreneur like I was back then, there are probably hundreds or thousands of others who could and should be doing more. They should be marketing more aggressively both on the front end, to both acquire new customers, and on the back end, to resell to their old customers.

There’s no real formula regarding how much you should apply to the front end vs. the back end to maximize the amount of money you’re trying to extract from a customer. I think it depends on the individual marketplace and your promotions. I do know that you can be as aggressive as you want to be, as long as you’re testing small groups of prospects with each idea.

I think the real answer to that question is, do you have a back-end product or service that’s directly tied to what they bought from you on the front end? If the answer is yes, then if you can tie your back-end promotion with your front-end, so that it’s a natural, logical up-sale that’s directly related to what you sold them the first time, then you should be fine. If there’s enough money and profit in that back-end sale, then what you want to do is test small, so if you lose everything on that test you’re not losing it all.

That’s the smart way to approach it. Always develop back-end offers; always have a good idea of what you’re going to sell them next after they buy that initial product or service from you. The closer that you can marry the two, the better. One of the ways we do that is with two-tier distributorships, where we bring people in as distributors for a product or service.

Now they’re all excited, and suddenly we have a master distributorship opportunity. It lets them come in at a higher level, where they’re able to get more money on every transaction. It’s closely related to what they bought the first time, so it’s a natural, logical step for them to take. It makes sense, and therefore our conversion rates are higher. We’re able to convert as many as 50% of all of those initial buyers who come in at a lower price point.

Generally, with brand new customers, you can’t ask for a lot. They don’t have any trust developed with you. It would be foolish to try to sell them something big and expensive, in most cases — and of course we’ve done it. We’ve tested it, and in some applications it works; but in general, it’s foolish to ask a brand new customer to spend thousands of dollars with you. The smart thing is to take them through a series of very logical, closely-related steps that lead to that additional money. Once they’ve bought something from you and you’ve treated then right, they trust you. They’re more willing and able to make the commitment, to give you the larger sum of money.

I’d like to re-emphasize the need to make sure that you’re always testing small groups with your back-end marketing, so you’re not really spending a huge amount of money on a product or service that might end up failing if sold to your front-end customers. Now, a lot of us hate to test; but like front-end marketing, it’s a necessary evil. Of course, the more successful somebody is, the more they tend to feel that they don’t have to test things — and I’ve fallen for that myself, when I actually knew better.

I’ve lost tens of thousands of dollars by not practicing what I’m preaching right here, because I just said, “Oh, hell! We don’t have to test; it’ll work!” Sometimes you have a gut reaction to something based on past experiences, or based on ego, or based on somebody else’s input — but that doesn’t necessarily have anything to do with that product’s relationship to the customer, because you don’t know what the customer is going to do, or how they’ll react. Sometimes your gut feeling is wrong, so you test.

Here’s what you do. You start out testing every new idea you have to your very best customers first. By doing that, you’ll never lose money — your best customers will buy anything from you, as long as they know that if they’re not happy, they’ll get their money back. You could sell them a box of rocks, if they knew they could get their money back if they wanted. So you test your idea to your best customers first, and then slowly start rolling it out to the rest of your customer list; and then, if it’s still profitable, you use it for new customer acquisition. You turn it into a lead generating campaign, a two-step new-customer-acquisition front-end marketing plan.

There’s a Zig Ziglar quote I’ve adopted as my mantra, and I actually put it on the back cover of the first product I ever developed. It’s become an overall theme for our company and I suggest you adopt it as well: “You can have anything in life you want, if you’ll simply help enough other people get what they want.”

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