Take 10 Minutes to Build Your Backend Profits Strategy

harness backend sales

You work hard to get prospects through your doors, or their contact information onto your email list – but are you getting all the value that’s available to you?

In a moment, I’m going to use the opt-in email list as an example here because it’s an incredible asset all small business owners should be building, whether their business is online, offline, or a mix of both. However, the same principles apply to all the contacts you have with customers.

Here’s the big idea: The real profits are in your backend sales. You spend time and money to get a prospect to buy something, or do another “action,” such as signing up for your email list. We can essentially assign your customer/prospect acquisition costs to that first action. Any money you make via follow-on actions is pure gravy.

Backend sales propel auto dealer profits

Let’s use a car dealership as an example. Savvy car dealers often make very little off the sale of a new car. That’s the front-end profit. However, when the dealer signs up a customer with financing, sells an extended warranty, and gets the buyer to pony up for undercoating, those are all backend profits. On average, they far exceed the front-end profits.

One great thing about having a good email list is that it gives you a means to enjoy more backend profits. If you know the buying history of your customers or the specific interests of your prospects, you can design all kinds of backend offers to send to the names on your email list. Further, the growth of your email list can be viewed as the growth of your backend profit potential – and it’s the kind of growth that is totally in your control.

In one of my recent newsletters, I was discussing passive income, and an affiliate marketing strategy I mentioned in that newsletter is ideal for generating additional backend profits: cost per action (CPA) opportunities.

CPA programs as backend sales

Maybe you have extended warranties, clearance items, or other related products or services you can offer after you’ve made a sale, or signed a new prospect on your email list. Some of these backend sales items require you to carry inventory. That’s fine in many cases, but when you can make money without having to carry inventory – especially if each additional sale is fairly substantial – it’s even better. Many CPA programs award affiliates with generous payouts. You’ll find many CPA opportunities at the following websites:

If you enroll as an affiliate in one or more CPA programs that relate to your niche, you can present these opportunities via your mailing list in a variety of ways. You can:

  • Present one or more offers at the end of the opt-in process,
  • Present one or more offers via an email receipt when a customer makes a purchase,
  • Present one or more offers in a targeted email to a list that has been segmented, and
  • Present one or more offers in an auto-responder program to prospects who have shown interest in your small business.

These are some of the basic approaches. If your small business model is more closely aligned with sales made in your location, you need to develop a menu of backend sales and train your staff in the best ways to present them.

Proper presentation critical

Extended warranties, as I mentioned above, fall into this category. Nine times out of 10 I refuse the extended warranty, but every so often I’ll buy one. Frankly, when I decide to opt for an extended warranty, it’s usually because the sales associate has done a better job explaining its benefits to me. All too often retailers leave it up to cashiers who have been on their feet for six hours to mumble something like, “Do you want the extended warranty with that?”

The point is that whatever you present as a backend sale, it must truly offer value to your customer or client. If it’s not a good fit, don’t bother your customers with it – you’ll only be lowering your credibility and their trust in you. However, when you have a good backend offer, don’t hide it. Take 10 minutes today to assess your situation and plan your strategy.

Let your customers know what you have for them. They will benefit and you’ll greatly enhance your profitability.