Getting Intimate with Your Back End
Let's get straight to the point today - how's your back
end? Very well, thank you, and what's it got to do with you?
Good question!
The reason I'm asking is that I've learned something
interesting about back ends, you see. As long as you give
them the right kind of attention they can expand in ways
you would never have thought possible, and make you rather
rich in the process.
Excuse me ... you at the back there! Where are you going?
Don't leave now - this really isn't about what you're
thinking it's about. If you'll just bear with me for a
moment, all will be revealed.
Right ... where was I? Ah, yes. I was about to tell you
about something that happened to me a few days ago. It's
the sort of thing that's probably happened to you at some
point, too, so I'm sure you'll recognise the situation.
It was a nice weekend so I took my son Daniel to the
funfair that had come to town (any excuse, eh?). Once we'd
finished riding on "dreadful machines" that turned us
upside down and every which way, he wanted to win a stuffed
toy. Hardly surprising really, there were at least a dozen
stalls with huge fluffy animals hanging from their plastic
roofs.
But try as we might - yes, I'll admit I had a go - we
couldn't get a ring to land over a bottle or a dart to hit
a dot on a card.
But then, just as I was about to admit defeat, I noticed a
stall with a difference...
This one offered three balls for a pound, and all you had
to do was get one of the balls into one of the
strategically placed glass bowls. It looked easy enough.
The bowls had nice, big openings and as long as the balls
weren't weighted in some way, it looked as if even a babe
in arms would be able to hit a bowl.
We bought three balls each and lo and behold, we won. Both
of us! Two goldfish! A pure orange fish that seemed to
enjoy flicking its fancy, flowing tail and a black and
yellow example that appeared to hang motionless in the
water staring out through the bag most of the time.
I heard several people comment on this, most saying that
goldfish must be cheap if stall owner could give them away
like that. Of course, he wasn't giving them away at all.
People were paying a pound for the honour of winning a
fish, but even so, when you consider the overheads a
funfair must have, he couldn't have been making much of a
profit. Or so it would seem.
How many of those who won a fish do you imagine went to the
fair believing they'd come home with a new pet in a plastic
bag? A few may well have had a tank and food left over from
a previous fish but most would undoubtedly be wondering
what on earth they were going to do with it.
This is where we see just how clever said stall owner
really is.
The bowls you have to hit in order to win a fish are
arranged on a table covered in a velvet cloth. What the
punter doesn't know at the time is that underneath the
table there are dozens of plastic goldfish bowls complete
with food, gravel, and plastic plant. How many do you
imagine are going to say no to buying one of these handy
starter kits when junior's standing there with a fish he's
thrilled to have won?
While most of the stall owners were tight with their
prizes, mister goldfish stall owner was practically giving
away his prizes and making a bundle at the same time -
through his back end. At a tenner a pop, he was onto a good
thing.
This, you see, is what back end sales are all about.
The customer buys something that leads to the possibility
of him needing something else. The greater the possibility
of him needing that something else, the stronger the back
end.
Stores that sell domestic and electrical appliances use the
back end method all the time. It's ages since I last bought
anything electrical in one of the major appliance stores
without being offered an extended warranty and it's my
betting the same goes for you, too.
There are times when the whole thing gets a bit silly,
though. I mean who really needs to pay £22 to get
5-year warranty on a CD player that cost under £50? A
couple of years down the line and it'll be pretty much
obsolete anyway but people take up these offers and the
stores are making huge profits from it.
Back end sales can mean the difference between a successful
and an unsuccessful business.
There are examples around us all the time. Just this
morning I opened my mail and received an offer to join a
book club. I could buy five books for 50 pence each! That's
less than it costs to produce the book so how are these
people making their money? Well, the small print said I'd
need to buy at least two books from them at full club price
and that books would always be at least 25% under the RRP.
But it also said that a special club magazine would be sent
to members each month with lots of offers and information
about new releases. "The Book of the Month" would be
profiled in this magazine and if I didn't want it, I'd need
to fill in a form and send it back to let them know.
Ho, ho! People lead busy lives and they forget. How many
haven't been saddled with "Fly Fishing in Alaska" or "Rug
Making for Beginners" just because they forgot to decline?
These clubs easily make back the money they lost of the
'hook' and plenty more on top, and all thanks to a clever,
if somewhat crafty, back end.
Car dealers make money out of selling finance packages, car
hire companies by selling no excess insurance and even the
BOGOF offers that Tesco, Morrisons and other supermarkets
use are intended to draw us in so that we spend our hard
earned cash on lots of other products we had no intention
of buying.
If your business needs to increase its profits, there's a
lot to be learned from that clever bloke at the funfair.
1. Never let your customers know beforehand how the bulk of
your profit's made.
2. Look around at other businesses and give plenty of
thought to what they're doing. If they're doing well,
there's a huge chance they've got a handy back end going
somewhere. Keep looking until you find it - a clever back
end will be well hidden.
3. Think about the last time you gave your own back end any
thought, if ever. If you don't have one you're probably
working far too hard for too little profit.
4. Could it be time to start looking at your sales from a
different angle? Instead of seeing an initial sale as the
end of a transaction, see if as the beginning. If you've a
good back end, the real profit won't have been made yet.
5. When you develop new product lines, think about what
other products the customer might need in addition to the
"main" item. It makes good business sense to make the most
of a situation while you've already got the customer's
attention.
Believe me, when it comes to making money in business, you
need to look beyond the first transaction - it's what
follows that really matters. A profitable back end is more
often than not the only difference between a struggling
business and one that thrives. Make sure your business has
add-on products that your customers will want.
I'll be going now - I have my own back end to concentrate
on. But let me leave you with this to ponder:
What part of your business is the 'goldfish'? Somebody is
providing the tank - is it you? If not then it's time to
make changes.
Good luck.
----------------------------------------------------
Nick James is a UK based direct marketer and product
developer. During the last 5 years Nick has sold in excess
of £1.6 Million Pounds worth of products and sevices
online. Subscribe to his Free Tip Of The Week email at:
http://www.Nick-James.com
