“Back End” Profits

PEPnet Educational Moment (06/11/12):
“Back End” Profits

  • Front End vs. Back End= It is important to understand the differences between the two and how you can apply them differently in your business to increase profits.
    • Front End = This is the initial point of sale.  Whatever primary item it is that you sell, that brought your customers in to begin with.  A front end sale is going to be harder and more expensive.
    • Back End = The back end is any other additional sales that are made to the customer or client over the course of the relationship.  Ultimately, you should be extracting more profits at the Back End than at the Front End.  Therefore, back end sales are easier and more profitable than front end sales.  Back end is about the power of small numbers… put that force to work for you!
  • The Crux of The Issue = You must leave no rock unturned and no penny left forgotten.  To extract maximum profit out of your business you must become completely obsessed with back end not front end.
  • 7 Ways To Create Your Own Back End
    • Do more of the same, whatever it is that you are doing.
    • Do audio versions of your books – multimedia packages. People will by the same thing if offered in different media.
    • Create a membership program and membership upgrades.
    • Create a “Something Of The Month”: Book, Cigar, Newsletter, etc.
    • Back End Services / Products that require manual labor: Seminars, Spend the day with, Bootcamps, Conferences, etc.
    • Do It For Them Programs
  • Slack Adjusters = A slack adjuster is an item that is high priced that you don’t sell very often but when you do, makes up for a lot of smaller sales.
  • Bounce back Coupons = Including a coupon in your final materials is a great way to get someone to reuse your services within a given time.
  • Licensing= Licensing your product or services in different ways can also increase your back end profits.
    • Use rights – e.g. here is this thing of mine and you can use for a seminar but not publish, etc
    • Sales rights – distribution
    • Market rights – You want to licence/sell one of my product for only…
    • Territorial Rights
    • Distribution rights
    • Use of your name, likeness
    • Use of your testimonials
    • List Use
    • Exclusives & Non Exclusives – exclusive is the most expensive license.
  • Where To Find That Hidden Back End Money?
    • Test and push prices
    • Improve ratio between small, medium, large & super size. There has to be something in each box that someone wants in increasing desire.
    • Get money from advertisers, get people to subsidise your marketing
  • Miscellaneous Tips
    • Have 3 price options if you can with the third being a super high priced premium. Two thirds people will go for the middle number and a small percentage for the super high one.
    • Immediate Up-Sells are a great way to increase your back end as well.

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