Back-end sales and how to profit from them:
Let’s talk about why the back-end of your business, is generally the most profitable part of it.
Long one today, but bear with me. You might learn something :-)
Let’s talk about getting “back-end” sales and why they’re so important.
We’re going to talk about 3 things:
1. What is a “back-end” sale?
2. Examples of back-end sales. And…
3. How to make a back-end sale even when you think you can’t get one (And why there’s ALWAYS a sale to be made!)
O.K., so without any further ado…
1. What is a back-end sale?
A back-end sale is your “sale after the sale”. Meaning, it’s what you sell one of your clients or customers, after you’ve sold them you’re “initial” service or product.
You see, most people are possessed with just “getting” a new customer. Once your sale is made and the euphoria is gone… you’re so excited, you just start thinking about your “next” piece of business, instead of thinking about a back-end sale.
But when you do this, you typically wind up leaving a bunch of money lying there on the table, by not helping this new customer of yours out, even more.
That’s because back-end sales are much more profitable, since there is no additional customer acquisition cost involved.
The truth is, after that first purchase, you’re not finished with that customer yet — not by a long-shot.
What you should be thinking about, immediately after you make your first sale… is, your “back-end” sale.
In fact, you shouldn’t ever think of selling anything unless you’ve got a back-end sale behind it.
Well, just think about it: What’s the toughest time to get money out of someone?
The first time, right?
And what’s the easiest time to get money out of someone?
The next time. Especially if it’s right after that first time.
Back-end sales are the sales you typically make just after your customer gives you money.
Listen, in business there is very little “low-hanging” fruit to pick off the trees. So please don’t ignore one of the few “easy” opportunities you have, to make a few easy duckets.
Whenever you sell someone something, always think about another logical sale you can make to your customer, either at the same time (an upsell, or a down-sell)… or shortly afterwards.
Any of these post-purchase sales are called back-end sales.
And if you’re not using these strategies now, you have to start getting yourself into that mindset. Re-programming, or re-training your thinking so that back-end sales become your “norm.” And over time you’ll thank me for it.
In fact, someone, somewhere is reading this… and they’ll wind up naming a wing of their house after me, if they listen and do this stuff.
So now let’s look at item #2:
How To Get More New Customers, Clients, or Patients Than Your Business Can Practically Handle
Let me show you some examples of back-end sales.
I go to a lot of concerts, mostly with my older son.
In fact, the last concert we saw was ZZ Top, right before New Year’s Eve. Before that, it was the Eagles around Thanksgiving.
And besides having a fantastic time, and sharing some quality father-son “bonding”, you get to see an awful lot of back-end marketing being done at these shows.
For example, after forking over $150-$200 bucks for tickets… once you’re at the show, you also get the pleasure of dropping another $35 Dollars on a t-shirt.
And $25 Dollars on a baseball cap… a $15 Dollar program… and a $20 Dollar CD.
My point is… each of these related items being sold at the concession stands are “back-end” sales to the up-front ticket sale. And in actual fact, when it comes down to it… the concert itself, is a back-end sale.
The original sale was made when I bought the band’s latest CD in the first place.
You see, everything’s all about the back-end.
The group makes “some” money off of CD”s. Sure, a group like ZZ Top is going to make a lot more than a new band, because they have more control over their recording process and they get a higher % of sales than a new band does.
But most bands make virtually ALL their money from touring, and a high percentage of it, from the concession stands. After all, some of these venues cost a small fortune to rent for the night, and not all bands can be like the Eagles and charge $140 per ticket.
So these bands are depending on concertgoers to spend as much money as possible on concession sand items.
So the CD is really a lead-up to the back-end concert purchase… and the concert purchase is really a lead-up to the back-end concession purchase.
As an aside, you want to hear some differences between going to a concert today, versus going to one in 1981, which was the year I graduated high school?
Well for starters, when I went to concerts at Madison Square Garden, kids were passing around loose joints. And when you wanted to honor a good guitar solo, or a great performance, you’d stand up and hold out a bic lighter.
Today, they’re passing around their cell phones and taking videos of everything.
And they hold up their cell phone, or an app with a zippo lighter flame on it, instead of the actual bic lighter.
Another difference I noticed, was… I never had an opportunity to sit in the “good seats” when I was a kid. I was lucky to afford money to hop on the subway to even get to the concert hall.
And so of course, back then I rationalized… Where you sit, “doesn’t matter.” I was a purist — there for the music, only.
But you know what?
That’s the stupidest thing I could have said.
The truth is, 4th row center really is a LOT better than the nosebleed section.
Anyway… let’s take a look at a couple more “back-end” examples.
Here’s one: Ever buy something online, and then at the bottom of the shopping cart, they say, “People who ordered this, also ordered that?”
Of course, right?
Well, that’s kind of a “baby upsell.”
They are offering you something similar, more like an “add on” to your existing order.
Another example would be when you buy retail items, especially when your sales person gets paid a commission, as opposed to… let’s say an hourly department store employee, where you’re lucky if they’re even conscious or can carry on a conversation, or if they’re willing to even pick up their head for a minute, and stop looking at their cell phone.
When you go up to the counter, don’t the best sales people try to accessorize your outfit?
Scarf with your blouse ladies? Handcream with your perfume? Tie with your shirt fellas? Appetizer with your frozen margaritas?
Dessert after dinner?
Each of these items (the scarf… the handcream… the tie… and so on…) are all upsells to your original purchase.
Are you starting to get this concept here a little better?
You must start training your mind to always think of selling, like a “1-2” punch from a heavyweight boxer.
You tag ’em with your jab, and then immediately afterwards, send ’em an solid right hook, like this: “Front-end, back-end… front-end, back-end… front-end, back-end.”
So now, lastly, let’s take a look at…
3. How to make a back-end sale even when you think you can’t make one.
(And why there’s ALWAYS a sale to be made.)
There are some professions where you think, “Hey, I can’t get a back-end sale here — I can only get one sale because nothing’s ‘left’ after that.”
Well ye of little faith… come hither… settle down… and listen very closely to what I’m about to say. Because what you really need to do is just start looking at things differently.
Sometimes, you need to look at your business, and especially your sales process… as a series of little “mini-systems” all put together.
When one system ends, another one begins.
Each of your systems are going to have different end-results. But the overall goal is always going to be…
More duckets for you.
You getting this?
OK, good. I may have to go slow for you, and if I have to… I will.
So don’t worry.
Anyway, here’s an example of what you’d probably think is a traditional “one-shot sale” kind of business, and how you can get get a back-end sale out of it…
As long as you’re willing to accept the fact that it’s not going to be an “immediate” sale.
I’m talking about the proverbial residential real estate brokerage business.
Imagine you’re a real estate broker. You’re probably thinking, “After I sell someone a house, what could I possibly sell them after that?”
Well, you’ve got a few choices here:
If you look at your business a little differently, you don’t look at what you can sell them. Instead, you look at “What other sources of income can you get out of them?”
Referrals, for example.
But you can’t just sit and “hope” for referrals, you have to proactively make them happen.
After all, “hope” is a very bad business strategy.
So let’s look at the numbers here to see what I’m talking about.
If you sell a home or a condo for $200,000 and you split your 6% commission evenly with another realtor, you wind up making $6,000 Dollars, correct?
Now what do most real estate brokers do after their transaction is over?
After they help you buy or sell your home, they send you a shitty fruit basket that costs $39.99 from Harry & David (if you’re LUCKY), and then every Christmas, they send you an awful cheesy calendar that no one even uses any more, with their realtor Glamour Shots picture on it.
The cheesy calendar usually goes into the circular file, immediately — unless you have relatives who live in another country.
For some reason, older relatives in other countries are very entertained by these calendars.
They look at them, the way you and I might look at a real live unicorn. It makes us curious, but we’re not really sure what to do with it.
Anyway, I digress…
Back to the story.
But what if instead of doing the bad gift and cheap calendar routine… you take 10% of your commission, and buy your clients 2 round-trip airline tickets to Las Vegas, or New York, or DisneyWorld, or somewhere else they’d really enjoy going?
And then, instead of mailing them a cheesy calendar at Christmas, what if you sent them a monthly newsletter called “Craig Garber’s Low-Cost Tips To Keeping Your Home Looking Like A Million-Dollar Estate!” (except you’d put your name on your newsletter and not my name, of course)
Don’t you think if you did these 2 things, you’d have your clients endorsing you all over town, any time they could?
People would go out of their WAY to give you business. And since you’re sending them a cool monthly newsletter, they’d never forget about you, either.
These folks wouldn’t be clients, they’d be hard-core members of your fan club, and ANY time they heard someone wanted a realtor, they’d do absolutely EVERYTHING in their power to make sure it was you.
Plus, what if you reminded them every month in your newsletter, you pay $500 Dollars for every person they referred to you, who ultimately either bought or sold a house using you!
How much of a raving fan would each of your clients be in THAT case?
And then, in each issue of your monthly newsletter, you can have pictures of your clients who you sent away on these cool trips… enjoying themselves.
So you wind up spending $1,500 Dollars to get a new client ($1,000 on the tickets, $500 on the referral) that’s going to put at least another $6,000 Dollars in your pocket.
Sounds like a winner to me, no?
You bet. Especially because you’ll be attracting a lot more clients, a lot faster.
And these new clients will be much better than your average run-of-the-mill clients, too. Remember, these clients called on you — they don’t need to be “sold” on anything.
They’ve already been “pre-sold” on you. You’ve been so heavily endorsed by the people who referred them, they’re going to do everything you tell them to do, including working with you exclusively, and anything else you want.
And you’re going to love it.
And here’s yet another way you could make some back-end sales. What if you had articles in your monthly newsletter, written by local people like designers… furniture store managers… pest control operators… caterers… landscape artists… insurance agents… accountants… and other people who could help your clients.
And each of these articles contained a special offer, only for people who read your newsletter.
Then, whenever someone called and used one of those coupons, you’d have an arrangement with the vendor that says you get “X” percent of the gross purchases, or a flat referral fee, or free pest control, or whatever.
See the back-end potential of this “one-shot” business now?
Remember, with a little thought… a lot of ambition… and a willingness to take action…
Comments? Leave ’em below
Now go sell something, Craig Garber
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