Let’s get straight to the point today – how’s your back end? Very well, thank you, and what’s it got to do with you?
The reason I’m asking is that I’ve learned something interesting about back ends, you see. As long as you give them the right kind of attention they can expand in ways you would never have thought possible, and make you rather rich in the process.
Let me tell you about something that happened to me some time ago. It’s the sort of thing that’s probably happened to you at some point, too, so I’m sure you’ll recognize the situation.
It was a nice weekend so I took my son Daniel to the funfair that had come to town. Once we’d finished riding on dreadful machines that turned us upside down and every which way, he wanted to win a stuffed toy. Hardly surprising really, there were at least a dozen stalls with huge fluffy animals hanging from their plastic roofs.
But try as we might, (yes, I’ll admit I had a go) we couldn’t get a ring to land over a bottle or a dart to hit a dot on a card. But then, just as I was about to admit defeat, I noticed a stall with a difference. This one offered three balls for a pound, and all you had to do was get one of the balls into one of the strategically placed glass bowls. It looked easy enough.
The bowls had nice, big openings and as long as the balls weren’t weighted in some way, it looked as if even a baby would be able to hit a bowl. We bought three balls each and lo and behold, we won. Both of us! Two goldfish! A pure orange fish that seemed to enjoy flicking its fancy, flowing tail and a black and yellow example that appeared to hang motionless in the water staring out through the bag most of the time.
I heard several people comment on this, most saying that goldfish must be cheap if stall owner could give them away like that. Of course, he wasn’t giving them away at all. People were paying a pound for the honor of winning a fish, but even so, when you consider the overheads a funfair must have, he couldn’t have been making much of a profit. Or so it would seem.
How many of those who won a fish do you imagine went to the fair believing they’d come home with a new pet in a plastic bag? A few may well have had a tank and food left over from a previous fish but most would undoubtedly be wondering what on earth they were going to do with it.
This is where we see just how clever said stall owner really is. The bowls you have to hit in order to win a fish are arranged on a table covered in a velvet cloth. What the punter doesn’t know at the time is that underneath the table there are dozens of plastic goldfish bowls complete with food, gravel, and plastic plant. How many do you imagine are going to say no to buying one of these handy starter kits when junior’s standing there with a fish he’s thrilled to have won?
While most of the stall owners were tight with their prizes, mister goldfish stall owner was practically giving away his prizes and making a bundle at the same time, through his back end. At a tenner a pop, he was onto a good thing.
This, you see, is what back end sales are all about. The customer buys something that leads to the possibility of him needing something else. The greater the possibility of him needing that something else, the stronger the back end.
Stores that sell domestic and electrical appliances use the back end method all the time. It’s ages since I last bought anything electrical in one of the major appliance stores without being offered an extended warranty and it’s my betting the same goes for you, too.
There are times when the whole thing gets a bit silly, though. I mean who really needs to pay £22 to get 5-year warranty on a CD player that cost under £50? A couple of years down the line and it’ll be pretty much obsolete anyway but people take up these offers and the stores are making huge profits from it.
Back end sales can mean the difference between a successful and an unsuccessful business.
Ho, ho! People lead busy lives and they forget. How many haven’t been saddled with “Fly Fishing in Alaska” or “Rug Making for Beginners” just because they forgot to decline? These clubs easily make back the money they lost of the ‘hook’ and plenty more on top, and all thanks to a clever, if somewhat crafty, back end.
Car dealers make money out of selling finance packages, car hire companies by selling no excess insurance and even the BOGOF offers that Tesco, Morrisons and other supermarkets use are intended to draw us in so that we spend our hard earned cash on lots of other products we had no intention of buying.
If your business needs to increase its profits, there’s a lot to be learned from that clever bloke at the funfair.
- Never let your customers know beforehand how the bulk of your profit’s made.
- Look around at other businesses and give plenty of thought to what they’re doing. If they’re doing well, there’s a huge chance they’ve got a handy back end going somewhere. Keep looking until you find it. A clever back end will be well hidden.
- Think about the last time you gave your own back end any thought, if ever. If you don’t have one you’re probably working far too hard for too little profit.
- Could it be time to start looking at your sales from a different angle? Instead of seeing an initial sale as the end of a transaction, see if as the beginning. If you’ve a good back end, the real profit won’t have been made yet.
- When you develop new product lines, think about what other products the customer might need in addition to the “main” item. It makes good business sense to make the most of a situation while you’ve already got the customer’s attention.
Believe me, when it comes to making money in business, you need to look beyond the first transaction; it’s what follows that really matters. A profitable back end is more often than not the only difference between a struggling business and one that thrives. Make sure your business has add-on products that your customers will want.
I’ll be going now – I have my own back end to concentrate on. But let me leave you with this to ponder:
What part of your business is the ‘goldfish’? Somebody is providing the tank – is it you? If not then it’s time to make changes.