You must have heard about front end and back end products. You also understand you must have both in order to grow your business. You can think a front end sale is a sale that you make for the first time with a particular customer. A back end sale is your additional sale to the same customer once he/she enters your funnel.
Now you ask a question, which one is more important? Front end sales or back end sales?
Before I answer that question, I want to remind you about 2 of the most important metrics in your business:
- Cost to acquire new customer
- Life time value of your customer
These 2 numbers are very important, in fact, just by knowing these 2 numbers you will be able to see how well the business unit is performing.
So tie these 2 things together, we have definitions like this:
- Front end marketing is a marketing activity that focuses on acquiring new customers
- Back end marketing is a marketing activity that focuses on increasing your customer’s life time value
Back to the question, which one is more important? Well, the answer is front end. You will be much better off focusing on your front end marketing effort. Why? Here are the reasons:
- Front end sales face more competition
- Front end sales are harder to make (it is harder to convince people to buy for the first time as opposed to buy the second or third time)
- Front end requires constant innovation to make your offer unique
Back end sales convert higher and have higher profit margin. That’s why in online world, you should automate your backend sales and focus on your front end. Make your front end products as attractive as possible for your customers and business partners.
Always think about giving high value products and solving your customers’ problems. For partners, you can give higher commission checks for them to promote your products harder.
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