One of the most important parts of building a highly-profitable business is increasing the total value per customer.
Value per customer is a metric that defines exactly how much a customer is worth to your company in the long-term.
For example, if you sell a product worth $129, and your average customer buys five times, then your total value per customer is $645.
Now, a great way for a business to multiply income quickly, is to find ways to increase their overall value per customer.
If you have 1,000 customers, and they each buy five times, that’s $645,000.
Now, what if you can increase the total value per customer, to $700?
That number becomes $700,000 – a $55,000 increase in total revenue!
And since the customer is already spending $645, selling another product worth $55 to them should be relatively easy.
This is what’s called a “back-end”.
Once a customer has paid, they’ve proven themselves to be interested in your business and the product you offer.
Many businesses believe the only way to generate more revenue, is to get more paying customers.
By having this mindset, they miss out on a prime source for fresh revenue… customers who have already proven they like buying from them!
Now, offering a product on the backend is all about value.
The way it’s done, is by determining exactly WHAT a customer likes about your current products.
Then, adding an additional product or service that ADDS to the value they’re already getting.
A great way to determine what your customers will be willing to pay more for is to send out a survey.
By surveying your customers, you can find new pain points and then create new products and services to address those pain points.
By doing so, you can dramatically increase the average value per customer.
In many businesses, the money they make on the back end is significantly more than the initial sale.
This makes having a back end vitally important. If your business currently doesn’t have a back end, how much money are you losing?
Often times, it’s easier to offer a backend than many business owners think.
This applies to both small and large businesses… and even individuals.
For example, I know of one blogger, who used to only sell an e-book.
It was a good selling e-book and made the blogger a few thousand dollars a month.
He realized that the buyers of his e-book would likely enjoy actually talking to him over the phone, to get even more value.
So, he led with a decent rate and offered phone consulting to buyers of the e-book.
He found that he sold out his consulting hours extremely quickly and just like that, he added an entire new chunk of revenue to his business… practically overnight!
This is the power of the back end.
Find the pain points your current customers have and then provide more value to solve them.