If you have a nice back-end, you’re going to make a lot of money in sales. No, I’m not talking about that back-end! I’m talking about a sales strategy that you simply must adopt right now - the very survival of your business may depend on it.
What is back-ending? Simply this: It means having a second, third, maybe even a fourth product ready to sell right after you make the first sale. This is the way real money is made in sales, and sometimes, it is the only way a true business can increase sales profits and improve sales performance.
Amazingly, many businesses don’t do this.
Finding first-time customers is expensive - i.e the cost of acquisition. You have to advertise, send direct mail pieces, pay sales people salaries or commissions, bear the cost of telemarketing and more. Then tack on your other overhead costs, such as labor, raw materials, or what you pay wholesale for your retail sale items. Then calculate the time, agony and effort in getting that customer to put trust in your service or product - only to sell to them just once. What a waste!
Add it all up and each customer you attract and sell can cost as much or more than the business profits you make from each sale.
The solution is to make additional sales to each customers you have already bought and paid for with your marketing efforts. Each time you sell more to that customer, it frees you from the need to pay more to find a new customer -- although you still need to keep doing that on an ongoing basis.
But the point is, once you have a customer, you need to maximize the opportunities because you have expended a lot of resources to find that person in the first place.
(Read our blog about the value of following up your customers: 3 tips to increase business growth profits)
Successful back-ending means careful planning. It means having additional products ready to go and available at the time of the first sale. Back-ending works best when you try to make that second or third sale right away, and not two weeks later when the customer has already cooled off, or even maybe forgotten about you.
If you sells shoes, also be ready to sell shoe polish, and maybe a pair of socks. If you sell a shirt, sell a tie, or several ties. If you sell bicycles, sell as many accessories as you can - water bottles, pumps, biking gear, such as shoes, gloves, caps and more. If you sell computers, sell software and an extended warranty.
Back-ending provides a higher average sales profit margin per customer.
It’s really a simple concept to make back-end sales, but it’s amazing how many businesses never do it. Even if you’re satisfied with the profits you’re making on your first sale right now, and you don’t think you need a second-tier product, think about how much potential income you’re letting pass by, possibly to go into your competitors pockets.
Back ending is the method to continually garnering continuing sales profits from the customers that you have spent so much money acquiring and worked so hard to get.
So take care of your back-end, and it will take care of you.