Use Back End Sales

By Steve Gillman

What are back-end sales? They are sales made after the initial sale, and are sometimes called add-on sales. If you call to order something you saw on a television infomercial, for example, it is likely that they will ask you if you are interested in adding something else to that order, "for just x dollars more." Upgrades can also be a form of back-end sale. You click to buy a subscription to an online service, and before you can enter your credit card number, you are prompted to consider spending just a little more for a "premium" version.

Why are back-end sales such a good way to boost your profits? Because they are made to customers that you have already paid for. Think about it, you spend money to get customers, in general marketing expenditures and in specific advertising campaigns. There is a cost for each customer acquisition, and therefore for each sale. But if you make an additional sale to a customer you already have, there very little or no cost to obtain that sale. Virtually all of the gross profit becomes net profit.

How you do this depends on the nature of your business. Suppose you own a pet store, for example. Once a customer buys a hamster or parrot he or she might never return again, preferring g to buy cheaper food at Wal-Mart. So once the sale is made, you might offer twenty percent off any food or supplies the customer buys today. If you have margins that allow for a profit after the discount, you might double your total profit from that customer on that day.

In a hair salon, a good beautician will not let you pay for a hair cut and leave. He or she will offer you some hair care products as soon as your cut and style is done. At the register in an office supply store, you'll be asked if you want an extended warranty for your computer or other electronics service. If you haven't already done this, find a way to do it in your business.

You can also follow-up later, again depending on the nature of the product or service that you sell. If you sell hot tubs, you can call the customer later and ask how they are enjoying their purchase, and also offer a regular maintenance plan so they don't have to worry about doing the cleaning and chemical treatments themselves. When the maintenance man is there he might suggest accessories that the customer can buy as well. Always look for opportunities for back-end sales.

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