Once you truly understand the power of backend profits, you'll explode your marketing results and create an unstoppable viral machine.
The techniques I will reveal to you have often been taught in many marketing courses and articles...but they are still underutilized because of two words -- "tunnel vision."
Backend profits means the additional income that you earn from a customer. The first purchase from a customer is the front end profits while the second purchase and so forth will be your backend.
The really good marketers understand that the most money will be made on the backend.
Here are a couple reasons why:
You can charge higher prices for backend products because you've already built a relationship with your customer.
They already know the quality of your product and of your customer service. You no longer have to convince them that you're credible and that your information is good.
You only have to convince them that your backend product is higher quality than your front end product and that they NEED the backend product.
Trust is one of the single most important components of selling. You can earn that trust by providing a good front end product.
Most marketers do not truly understand the power of the backend and that's a fact.
I know because I see very few affiliate programs which pay higher than 50% commission.
Think about this for a minute.
Let's say you sell your product for $50 and you give 50% commission. You have 5 affiliates who each make 10 sales each.
You pocket $1,250 after paying commissions. You now have 50 customers. Five of them end up purchasing your $100 backend product for a profit of $500. Total profits is $1,750 for you.
Now let's consider giving away 75% commission to your affiliates.
By giving away higher commissions, you get 10 affiliates instead of the 5. Ten affiliates making 10 sales each at $50 will make you $1,250 -- which is the same front end profits as before.
Now you have 100 customers and make 10 backend sales for $1,000 profit.
So how did you end up making more when you increased your affiliate commissions by 25 percent? You made it on the backend.
Here's what is happening behind the curtain as you increase your commissions.
You gain more affiliates and subscribers as those affiliates send you more traffic to your site.
Those affiliates are happier with their higher paycheck because you gave them higher commissions. Therefore, they will continue to send traffic to your site.
This cycle increases your traffic over time as you gain more customers, more affiliates and more subscribers.
It's the ultimate viral marketing machine!
More subscribers equal more profits. More customers equals more profits. More affiliates equals more profits.
So is all that worth a hit on your front end profits?
Yes!
The problem most people have is they can't stand to see their affiliates making more than them. Tunnel vision keeps them from seeing all the extra subscribers, customers and affiliates which could be theirs.
Please remember one thing about running your affiliate program.
A 75% reduction in profits is better than a 100% reduction, which is the case if the affiliate had not made ANY sale.
In summary, you should create an affiliate program for your front end product which gives away a majority of the profits.
You should also spend your time creating multiple backend products.
Gary Huynh is a full-time online information marketer. He currently earns money from affiliate programs along with running multiple membership sites. View his weblog at: http://www.garyhuynh.com for more tips and tricks to help you achieve a full-time work from home business.
