What Backends Are And How To Use Them

by · September 21, 2012

In this article I want to talk to you about your backend.

Don’t turn over. Don’t switch off. You haven’t accidentally been misdirected to some dubious ‘adult’ website based in Russia. (Not that I would know anything about those of course.) Keep reading because this is important stuff.

Backends are important in all businesses – but especially in joint venturing. The problem is (just like real backends really) a lot of entrepreneurs are embarrassed by their backend. Maybe they know it’s not up to scratch. Maybe they don’t even have one at all!

But backends are really important. Because your backend can make you rich if you look after it and use it in the right way!

So what is a backend? Quite simply it is a product or service you keep ‘in the back’ to sell to people after they have made the initial purchase from you. Normally, you bring them in ‘on the front end’ with a tempting, bargain deal. Then make lots of money from them with further backend products and services.

Backends are where the most money is made in business. Here’s an example from conventional business: For a shoe shop, their front end product is a pair of shoes. In most cases the profit margin on them is pretty tight. But once they’ve sold you the shoes they try to sell you protective sprays, polishes and insoles as well. That’s their backend product range. And there’s tons of profit in those. You can do something similar in JV’s. Offer a tempting, low-priced product up front but then have lots of more expensive, more profitable ones as your backend.

So far so good. But there’s a little more to it than that. Because backends can be used to increase your chances of tying up a great JV deal in the first place! Why? Because if you have great backends available then you can afford to give up a larger share of the profits on a product in order to get the deal in the first place.

Of course, I generally advise you not to give away all your profits on a JV deal straight up. As I explain in my recent article – How To Get The Right ‘Split’ For JV Commissions – many partners will be thrilled with 50% of the profits. But it is good to know that, when you need to, you can afford to give more to get a great deal and blow all your competitors out of the water …. if you have your backend to rely on!

In fact, since the backend is so lucrative, many JV partners may even assume that you already have some add-on products or services in place to offer to the customers they will help you to acquire. And if you do have a backend offer ready – and you want to have an easy way to get more JV prospects to jump on the bandwagon – you can and should offer them a share of the backend profits.

Again, the choice whether to offer this is yours. It’s just a suggestion. But remember, the backend is where real money is made. Most good marketers know this and will be turned on instantly by the thought of getting a piece of your backend!

One very important thing here: One of the secrets of making all this work is how you put this over to the prospective partner. I would suggest that you emphasise it right there in the initial proposal. Drop these tempting little paragraphs (modify them to suit your requirements) into your proposal ….

As stated earlier our basic product retails for £97.00, and we are more than happy to offer you 50% of the selling price for each and every sale generated from your efforts. This means that you will make £48.50 for every course sold!

But, Fred, we want you to know just how serious we are about making sure you profit from this deal fully and fairly. We also have an advanced product that sells for £497.00. About 4% of all customers who buy the basic product also buy the advanced product. And for each of your customers who buys this we will also pay you 50% of the profits – or £248.50 – on the sale.

Is that a deal-clincher or what?
To summarise, here are a few more important thoughts about backends:

The real money in a business rarely if ever comes from the obvious ‘up front’ product.
Whatever a business is selling, the best and easiest profits probably come from something that is hidden away in the background.
Examine your own backend situation in detail (not a pleasant thought I know). If you have just one product or service to offer your customers you need to develop some new ones – pronto. You need to have good backends in place as soon as possible. The longer you don’t have any the more money you are letting slip through your fingers.
Finding backend ideas is simple. Ask yourself: What complementary or add-on products and services might your customers want, need, use or already buy from somewhere else?
A move in emphasis from making most of your money on a one-off sale towards treating the initial sale as a foot-in-the-door at the beginning of a longer relationship can be the key to massive profits.

At the end of the day the secret of making a great deal of money in a business can rarely be found lurking in the first transaction. What really matters is what leads on from that. The difference between a so-so JV-based business and a fantastically profitable one is often nothing more than a solid backend of add-on products and services.

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