Where Money Is Hidden
They used to say, “The money is in the list.” And that’s still true. But perhaps the REAL money these days is hidden someplace else. Somewhere you might not be looking.
Jeff Walker, in a recent video, confessed that he is a “numbers geek.” Meaning he likes to pour over the numbers in his business to find out what’s working. And it tends to be the most crucial time he spends on his business, too.
Here is a stat he says will change your business: “It is 15 times easier to make the second sale to your clients than it is to make the first sale.”
15 times easier!
But most online marketers aren’t looking to make the second sale because they’re too focused on making the first sale. If your only focus is on making one sale with a customer, then odds are you will never have a truly robust business. There is too much competition out there now, and it’s getting more and more expensive to get new customers, also.
When you add in a backend product, you can double your sales.
DOUBLE your sales!
People want mastery, convenience, speed, or a closer connection to you. And that’s what you’ll deliver on your backend.
How much should you charge? Jeff says that 20% of your buyers will pay five times the initial product cost for that backend product.
If your initial offer is $100, then charge $500 for the backend product. If the front-end product is $400, then charge $2000 for the backend product, and so forth.
Your backend isn’t about delivering five times the stuff, but instead five times the depth. Maybe you offer coaching – there is no ‘stuff,’ per se, except for your time.
Or maybe you offer a done for your solution.
For example, your initial product teaches how to do something, and you charge $100 for it. But if they would like you to do it for them (or rather, your outsourcers) then you charge five times as much, and your customer is thrilled they don’t have to suffer through all the steps and work involved in getting that result.
Bottom line: If you don’t have a backend built into your business, get one.
Or if you’re like Jeff Walker and you offer EVERYTHING a person needs to get the solution they want in the first product, then provide another, complimentary product that covers the next step of whatever it is they’re trying to accomplish.
And if you’re genuinely stuck for what to offer, then make it simple: Offer one-on-one coaching to help them do what’s in your initial product. For example, for $200, you teach them how to set up a non-profit status for their organization.
But for $1,000 you coach them over the phone or Skype on each step of the process. You’re holding their hand and giving them the encouragement they need to see the process through, which might take 5 to 10 thirty-minute phone calls. Do the math, and you’re earning $200 an hour, or more.
One more note from Jeff: Having a backend changes your math. Because you have (typically) doubled how much revenue you take in, you’re doubling how much each customer is worth.
This allows you to spend more on advertising while continuing to bank more profit, which leads to even more sales and yes, more profit.
The value of a backend cannot be overstated. And when the day comes to sell your business – if and when you get tired of it – then your business will be worth twice (or more) what it would have been worth if you did not have that backend.
If you have a business already, add a backend. If you’re just starting a business, have an idea upfront of what your backend will be.
It will give you a more robust, more secure business and allow you to retire that much sooner.
