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If you are clever and well advised, you will waste as little of your cash as possible. But, spend you must.
Suppose you spend $500 and you get 5,000 targeted hits to your web site. If you have written a really good sales letter and have a clear message, you might be very lucky and convert 3% of visitors into sales (very lucky!). That would mean that you sell 150 items and each sale has cost you $3.33.
If your ebook sells for $9.99 you are looking at a healthy 200% profit.
Now, here comes magic.
You have not just created 150 happy customers, you have also created a list of 150 'super-targets'. People who have shown themselves to be predisposed to buy from you.
The next step is to send them an email saying that as a valued customer, you would like to make them an exclusive special offer - a prelaunch special deal on your new ebook - instead of normal price of $24.99,which it will cost when it goes on general release, they can order it right now for just $17.97.
Your conversion rate against these super-targets should be much higher than before. Perhaps as high as 20%. So you may sell 30 copies and gross $539.10 from these customers that you would not have otherwise got.
At zero advertising cost!
Instead of making $1,498.50 for your $500 investment, you have made $2,037.60. 308% return on investment instead of 200%.
And that is just beginning, because you now have a loyal following to pre-sell your next product to - and next.
The lifetime value of your select band of 'super- targets could be enormous.
I have done a lot of mail order marketing in my time (I worked in advertising industry for 25 years) and have seen back-end marketing make companies millions. I even did it myself when I ran my own mail order company. We advertised a 'free' bottle of aromatherapy oil, which customers just paid carriage on. Thousands responded. We then sent a sales letter with every free bottle selling a great value pack of 6 oils. That sold a lot. Then every customer got a regular order form with additional products on it.
It worked well, and everyone was happy, but believe me, it works even better on Internet. Repeat contact of customers (often called relationship marketing) offline still carries a considerable cost - paper, printing, envelopes, postage, fulfillment.
Online, all of these cost just melt away.
Leaving you with that lovely, cuddly six-letter word: PROFIT.
So to answer original question, yes, your back-end does look big.
Martin Avis is a management and training consultant. To get your unfair advantage (and 6 free gifts) in Internet marketing, business and personal success, subscribe free to his weekly newsletter, BizE-zine. mailto:subscribe5@BizE-zine.com or visit his information-packed website at http://www.BizE-zine.com