Discover your ultimate back-end and explode your revenues

In this issue, we'll cover a topic that can quite literally make you filthy rich. It's responsible for billions of dollars in sales, and is available to everyone, from the biggest Fortune 500 Company to the smallest Mom and Pop shop.

First, let's clarify what it is not ...

This technique is not about getting traffic, or making sales, or collecting names or getting ranked in the search engines. It's not about recycling traffic, or increasing your conversion rate, or finding new advertising sources, or learning the best keywords, or even increasing your visitor value (at least not directly).

No my friend, what we're talking here is how to discover your ultimate back-end product or service and leverage it into a money machine.

Let's define exactly what a back-end promotion is ...

• It's the process of selling something else to people who have already bought. It's usually a more expensive, more extensive, or more targeted version of the lead product they initially purchased. For example, if you sell a book on real-estate investing, you might promote another book teaching how to get low-cost financing on the back-end.
  
  
• It's sold via a separate transaction, as opposed to an upsell which is a technique designed to increase the order size of the first sale. When you "Super size it!" at McDonald's, it's a great example of an upsell, but not a back-end.
  
  
• It's made with "push," rather than "pull" techniques. In other words, you (as the merchant) make a proactive attempt to contact existing customers with your back-end offer by e-mail, direct-mail, or telephone, as opposed to sticking a page on your site and hoping people find it. You specifically target existing customers with the promise they'll get more of what they got from the initial sale.

Now, let's define your ultimate back end ...

Back-end marketing is not new. It's been around since the first merchant realized selling to customers is easier than selling to prospects. It's a great way to bring in extra cash, keep existing clients buying, and reduce customer acquisition costs.

Imagine a world where the transaction size is $1,000, $5,000, even $25,000 or more. This size sale has an immediate impact on just about any size business. But what, you may ask, can you charge that kind of money for?"

Simple ... Sell the ultimate solution based on the
end result your customer is trying to achieve!

• If your lead product solves problems, you actually solve their problem instead of just telling them how.
  
  
• If your lead product moves people toward a passion, you enable them to realize their passion instead of simply telling them how.
  
  

• A book on taking your company public might cost $20 at Amazon.
  
  
• A back-end to the book would be a consultant who helps you outline your IPO strategy for $200 an hour (total price $5,000).
  
  
• A back-end to the consultant would be lawyer who helps you implement the initial strategy for $500 an hour (total price $50,000).
  
  
• The ultimate back-end would be an underwriter or consulting agency who does all the work for you, for which they can charge hundreds of thousands or even millions of dollars!
  
  

With the $20 solution, the end result is discussed, but the prospect is far from realizing it. The book is simply a description of the process in somewhat generic terms to satisfy a wide variety of readers. It tells about the steps, and extols the benefits of being public, but that's about it.

When you hire the consultant, you start getting specific. Your $200 an hour brings you closer to the end result by providing an actual plan to implement based on your company's needs and wants.

When you hire the lawyer, you learn the particular steps you need to implement and the benefits you will achieve by going public. You get the business structure information, the compliance issues, the employment documents, and the accounting procedures, and when it's over, you will be much closer to being a public company.

However, if your goal is to be public, and you want it done quickly and efficiently (and you have the budget), it makes perfect sense to pay someone to do it for you. The ultimate back end in this scenario is to offer a fully integrated service where the entire plan is implemented on behalf of the customer.

The customer's perfect solution is your ultimate back end.

Who is your prospect?

Only a small percentage of your front-end customers will buy your ultimate back end. Most people will never even get to step two or three. In fact, many people who say they want the end-result really don't ...

• Maybe they are afraid of reaching their goals.
  
  
• Maybe they don't have the budget to pay for the end-result.
  
  
• Perhaps they are comfortable where they are, and dream of the end result with no intention to get there.
  
  

What are you really selling when you
develop your ultimate back-end?

Big-ticket back-end sales are about helping your customer achieve their desired end result. So, you need to learn how to drill down the benefit chain and discover what's really motivating them. The deeper you go, the higher the price you can charge.

And a big smile on their face!

Now what could we sell to a $750 rod buyer to give them more of what they want?

• More tackle? A good back end, but hardly the ultimate end result!
  
  
• Books and videos? Closer, but not quite!
  
  
• Fly-fishing classes? Almost there!
  
  

How about this: A week with the company president, the chief rod builder, a five star chef, 9 other guests, and all the best fishing gear in a luxury river-front resort in Montana (or Alaska, or Chile, or wherever).

And how much could you charge for this amazing, once in a lifetime experience? Maybe $10,000, or perhaps even more!

Of course, not everybody who buys a rod will buy the trip. Ten grand is a little rich for most folks, so this becomes aspirational. But the offer is on the table, and since not everyone can go, it's a good thing not everyone can afford it.

That's an ultimate back-end!

Now that we're all on the same page, let's talk about some of the obvious and actionable ideas you can implement quickly in your own business.

In most cases, there are three directions you can go:

1. Coaching and Consulting

For many businesses, especially those selling information products or services, coaching and consulting are a perfect back-end since they allow you to deliver an advanced and personalized version of your techniques while charging significantly more.

Though most customers won't go beyond your initial product, a percentage prefer one-on-one training because they can achieve their goals faster.

For those, cost is irrelevant. The value you provide, and whether they believe you can deliver it, is what's most important. If you can, do so· and charge handsomely for it.

Here's a great case study:

A client of ours sells an advanced back-end version of his $49 real-estate course to existing customers for $695. He hired us to help him improve the e-mail conversion rate on this product, and wanted our opinion of his new bonus, a personalized one-on-one coaching program for 30 days.

Now listen, this guy gets marketing. He probably makes $50K a month selling the $49 book, and another $50K selling the course. In addition, he earns very good money as an investor.

He never considered the value he could offer to his customers by teaching them to become successful real estate investors. In fact, he artificially limited it to $695 since that was as far as his clients could go with him financially after they bought his initial book.

Open your eyes!

We performed a little research and discovered what his competitors were doing. We found out what they were selling, how they were selling it, how much it cost, and who was buying it.

The results were shocking ...

• Competitors offered products in the $1,500 to $5,000 range, some much higher.
  
  
• Many offered coaching programs and charged as much as $1,000 a month to participate.
  
  
• A few offered "complete solutions" including personalized mentoring, investment recommendations, financing sources, and more for $15,000.
  
  

• None relied solely on e-mail. All used telemarketing, direct-mail, and broadcast faxing, which are perfectly legal if the prospect is an existing client.

• If that worked, we suggested he increase the length to six-months, and charge $4,500.
  
  
• If that worked, we suggested he offer annual memberships for $7,500.
  
  
• If that worked, we suggested he raise the price to $15,000 and include a seminar or other value enhancer.
  
  

1. Our client is uniquely qualified to teach people how to invest in real estate. He's an active investor who makes significant income buying and selling property, and he loves to show others how to do it too.
   
   
2. There are people who will gladly pay $15,000 to achieve this goal. It isn't too much if you can learn to make it back (or better) every year with the techniques you get.
   
   
3. The market had established the price, not him. There were quite a number of competitors who had already broken through the $1,000 price barrier, so it really wasn't a stretch for him either.
   
   

The end result:

He now offers far more value to his customers, dramatically increased his sales, and developed new revenue streams by repositioning his offer to include personalized services he identified his clients wanted to buy.


2. Turn-Key Solution

The second example is what we call the turn-key solution, because you actually do the work for the client, and hand them the end result on a silver platter.

When you do the work for them, you can charge a lot more, and depending on the value you provide, even leverage it into recurring revenue.

Here's a great case study:

An important aspect of starting a new business is to understand how to protect your business from lawsuits and excessive taxes. Eventually, many business owners discover an amazing solution called a corporation, yet few understand exactly how it works, or what the legal implications are.

Even those who bravely wade into the swamp of muddied information, rarely appreciate the intricacies and benefits of creating a separate legal entity. Many do nothing and operate as a sole proprietorship (the sucker-bet).

Of those who trudge on, many end up in an attorney's office, and pay as much as $3,500 for their initial filing (which costs the attorney only a few hundred dollars in application and processing fees). Unfortunately, most people still don't understand the benefits of establishing a new business structure, and make poor decisions down the road.

Enter Diane Kennedy ...

If you've read the Robert Kiyosaki series (Rich Dad Poor Dad, Cashflow Quadrant, etc.), you may have noticed the book titled Loopholes of the Rich, written by Diane Kennedy, CPA.

In the book, she explains better than nearly anyone else why you want to incorporate, why it's advantageous to do so in Nevada, how to set up a "double entity" structure, and how to benefit from the laws and pay less in taxes while enjoying the protection of a corporation.

Reading her book is the first step in an eloquently designed sales system. While it definitely gives you an edge, gets you excited, and answers important questions, it really positions her as the one you want on your team.

And when you reach the last page and see a big ad for her services, you are relieved rather than offended. So you call her to get a price to put it all together, and you are told ...

It costs $2,500 just to have her review your
situation and give you a quote for implementation!

That's right, the quote for the work costs $2,500! While this scares away most people, it's a qualifier on her part. For those who desire the benefits incorporation provides, and want them immediately, this solves a big problem.

So you give her your business details, accounting statements, bank information, and your financial goals and send them off with your $2,500 check. And what, do you get back?

A proposal for $5,000 to $10,000 for a
detailed implementation plan!

Now listen, many people drop out at this point. Some decide to do it themselves. Some hire a lawyer. Some forgo the process of incorporation altogether.

But a percentage plunk down the cash and rest easy, having hired a professional business advisor to assist them with their strategy and implementation, and knowing it's one less thing they have to worry about.

And that's just what she's banking on ...

• Hundreds of thousands buy the book
  
  
• Thousands contact her office
  
  
• Hundreds pay $2,500 for the implementation strategy
  
  
• Dozens pay her $5,000 to $10,000 to do it for them

Pretty cool system, isn't it? Clients get a fast and easy incorporation solution they know is done properly, and Diane Kennedy gets 300% - 500% more money for the same service a lawyer or accountant would charge.

First, she establishes credibility with prospects with her $20 book. Second, if you like the ideas and want to move toward a solution, she offers a personalized quote for $2,500. Third, if you accept the quote, she offers a personalized program of tax reduction, 100% accountability, and an explanation of each step so you get an education as well. Pretty slick turn-key model!


3. Partnership

For some, especially those who need help with their business on a day-to-day basis, the coaching, consulting, and even the turn-key solution aren't really appropriate. What they need is someone to do the work for them, and do it every single day.

That's when the partnership opportunity is best.

Here's a great case study:

We have a friend in a hot market, who is making a lot of money selling his digitally delivered course online. He's been working with a consultant, who has helped him develop his offer, create a sales process, and identify potential JV partnerships.

While our friend is a very nice guy, he's not a particularly disciplined businessperson, and would rather spend his time traveling and having fun than managing his business.

Sensing this, the consultant recently offered to take over marketing the entire business for half the revenue, with a guarantee to increase sales by 100%.

This allowed our friend to make the same amount of money and continue his "permanent vacation" status indefinitely. Needless to say, he jumped at the opportunity and immediately booked an around-the-world trip.

The consultant, on the other hand, wisely implemented what's possibly his ultimate back-end of all time, turning a $5,000 a month customer into a $50,000 a month revenue stream!

Two more ultimate back ends

In our discussion about ultimate back ends, we would be remiss if we didn't mention two others, which may be appropriate when the aforementioned are not.

1. Continuity

For some businesses, there is no high-ticket back end. Or if there is, it's neither cost-effective, nor practical to provide.

Take an online vitamin shop for example. One of the best back end products you can provide is simply more of the same. Since vitamins are a consumable, your goal is to get someone to keep buying them ... Forever!

Think about it for a minute. If you are selling vitamins, you are really selling health, which could easily lead to weight training, a nutritional system, a personalized workout schedule, even life and health insurance. However, these things are either regulated, low-dollar transactions, of they're location specific.

But if your vitamins cost $50 a month, you would be getting ...

• $600 a year
  
  
• $3000 over 5 years
  
  
• $6,000 over 10 years
  
  
• $12,000 over 20 years
  
  

And so on. Continuity is a good strategy for anyone selling a low-dollar consumable who is faced with big-ticket sales challenge.


2. Aspiration

The fly-fishing example detailed previously is aspirational. It's something most people can't take advantage of, but virtually everyone wants to.

Here's a great case study of another one:

Tony Robbins has a high-end coaching club which costs somewhere in the neighborhood of $65,000 a year.

This is for people who have already bought Personal Power, Get the Edge, Personal Power II, and who have attended his Life Mastery University, Personal Power seminar, and frankly, have run out of things to spend money on. (Don't you just LOVE those kinds of customers?)

Anyway, we don't have the exact details, but we believe the group is open to just 12 people who get to accompany Tony on bi-monthly vacations, amazing stuff like ...

• Lunch in Omaha, Nebraska with Warren Buffet to discuss stock investment strategies.
  
  
• A weekend in Scotland at the castle where golf was invented to learn from the resident masters and play a few rounds on the most famous course in the world.
  
  
• Three days with Mario Andretti learning the intricacies of driving race cars up to 180 MPH.
  
  

Implementation

Selling your ultimate back end is more complex than simply setting up an autoresponder to pitch existing customers. In fact, there are entire companies dedicated to making sales presentations and converting prospects.

But listen, you can do this yourself, just by following the marketing plan outlined here.

• E-Mail: E-mail should be your first line of attack because it's easy and can be automated. Use the sub-list strategy we reviewed in last month's issue.
  
  
• Telemarketing: Since so much email does not get through, we also recommend calling each prospect who doesn't respond to the automatic follow-up. If you want to use the soft sell, simply explain the offer, and send them to the Web site with the details. Most people are so shocked to receive a call from a live person, they'll check out nearly anything you recommend.
  
  
• Direct-Mail: For people who don't respond to the first two methods, we recommend direct-mail. Just take your online sales letter and send it out as a direct-mail piece by first class mail, overnight, or FedEx. You may even consider sending this to prospects who do respond (but don't buy) since the medium of direct-mail is largely underutilized, and thus, more likely to get read.
  
  
• Fax Broadcasting: If you have a relationship with the prospect, their permission, and their fax number, send them a fax. We don't recommend sending a long sales letter, just a one or two page recap of the offer, along with a tracked Web page so you can measure response.
  
  
• Teleseminars: If you are able to reach your prospects, but you can't convert them to the higher priced sale, consider an "informational" teleseminar. You simply explain both the problem (what the prospect wants to achieve), and the solution (your product or service). Include testimonials, examples, case-studies, and present an outrageous offer to make the participants say yes!
  
  
• Physical Seminars: If you are a local or regional business, or it makes economic sense, consider having a physical seminar where you demonstrate your product or service.
  
  

A great marketer with a penchant for statistical analysis, once commented, "If you take a group of 10,000 somewhat interested prospects, you can break them down as follows:"

• 5,000 will read your headline.
  
  
• 2,500 will read your sales letter.
  
  
• 500 will spend $20 to learn more via a book.
  
  
• 100 will spend $500 to learn more via a home study course.
  
  
• 25 will spend $2,000 to learn more via personalized training.
  
  
• 10 will spend $5,000 to learn more via a seminar.
  
  
• 1 will spend $10,000 if you just do it for them.
  
  

Pretty cool, huh?

Ask yourself: Who are the $10,000 prospects on your prospect list and what do they want?


Respectfully Submitted,


Jonathan Mizel