Prosper Newsletter: November 2006 > Marketing
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
Patience And Knowledge Give Marketing Student Support Needed For Success!
I would like to thank you very much for all the help, ideas and encouragement you have given me thus far. I really appreciate the patience you have had with my technological ignorance and questions. You never made me feel uncomfortable or incompetent. This was very important to me during coaching. Thank you for sharing your expertise and resources and for being my coach, I have learnt a great deal and am excited about being successful at Internet marketing. Speak to you tonight.
Warmly,
- Lyn C.
Elkhart, IN
Innovation in your field is key. Whether you are a product or service based company, the need for constant improvement is integral. Thin of 5 ways that you can do to dramatically improvement the customer buying experience, the customer service experience, system for customer loyalty and repeat purchasing, and marketing to your target. Specific steps taken each week and each month may yield exponential returns.
One of the best ways to tap in a brainstorm of ideas for improvements is to ask both your customers and your employees. Some of the most meaningful points of feedback you can receive may come from someone in these two camps. Don't be too quick to dismiss this feedback.
Front and Back-End Systems
Business consists of three main activities: marketing, sales and fulfillment. Many people do not understand the difference between these activities. In order to help you understand, we will define all three activities.
Marketing is defined by asking and answering the question where? Where is the target market? It may be people who live in certain geographical location, it may be a certain age group, it may be certain words that are typed into search engines, or it may be certain websites that are frequented. It might be people who belong to certain organizations or go to a certain church or shop at certain stores. A certain amount of creativity is required to determine exactly where the target market is.
Sales is defined by asking and answering the question what? What to say to persuade somebody to buy the product or service that is being sold. This includes ads or scripts used for telemarketing. This is where the notion of creating a unique selling proposition (USP) and all things related to persuading someone to buy the product or service is important.
Fulfillment is fulfilling the sale. This involves finding someone, persuading them to buy and then fulfilling.
The process of business is nothing more than implementing these three steps over and over again. If the amount of sales or the amount of money that is being made falls short of expectations, certain questions can be posed. Questions such as: Have I chosen the wrong product? Am I not being persuasive in what I'm saying? Or am I simply not finding enough people to persuade?
Front and Back-End Systems
A front-end system is an inexpensive product or service which is used to get someone to express interest in learning more about what you have to offer. In the information industry, this initial "lead product" is often a book, an e-book, a one-time consultation, and a one-time attendance of a class or a CD. It is anything that will get people interested in buying into the back-end, which is where the more expensive, higher-profit products or services are sold.
The back-end is where the money is. Back-end services and products are naturally related to front-end services and products, like consulting services, a seminar or tele-seminar, a tele-class or home-study course, or other services with a higher profit margin.
An example of front-end products are downloadable reports that are available on different topics, such as making the decision to start a non-profit organization or how to acquire funding for your non-profit organization, making the decision to go back to school or where to find scholarship money. These reports can cost anywhere from 5 to 40 dollars, and when people buy these products they are later contacted and up-sold into products of a higher profit margin, such as non-profit setup services or accounting or grant-writing services. These are the back-end services and products.
The relationship between the front-end and the back-end depends on the amount of involvement the creator of the front-end wants to have in the back-end. Time does not always allow the creator to be involved in sitting down and helping set up a non-profit organization, but when a sale results from a person purchasing the initial product and then purchasing the back-end service of setting up a non-profit organization, the creator makes a percentage from that sale.
Involvement in the Back-End
When designing a business you should start with the end in mind and work backwards. In other words, start with fulfillment. Do a market analysis. Find out if there is a market for the product or service that's being sold. People usually fall short in marketing and sales areas. The product is great, people want it, but the product creators just don't know how to be salesmen. The creators don't know how to generate the relationship that is necessary to make contact with the target market.
Transitioning From Front to Back-End
Once the business has already been through the marketing, sales and fulfillment process once, it's time to pick someone who has purchased on the front-end and sell them into the back-end. An example would be selling them into the tele-class that's offered in association with the front-end product.
Where is the target market? The obvious answer is that it's from the same group of people that purchased on the front-end. Already on file is their physical address, e-mail address, and phone number which can be used to up-sell them into the back-end. One way would be to e-mail an announcement to the customers. Another way is to send a flyer out in the mail. Knocking on their door is also a possibility since their physical address is already on file.
An important question is which method of contacting customers will be most practical. If they're all over the country, going door to door doesn't work. If they're all over the world, mailings may not be practical. E-mails are a good option. The sale may also necessitate a live meet. An important question to be answered is how to best contact the customer.
Another question that you need to address is who is going to do the sales. Does the author of the book pick up the phone and invite customers to the class? Doing so would give the author insights into which the customers are, as well as insights into that part of the business. But if 30 books are being sold every day, it isn't practical for the author to contact all of them. Also, authors usually don't want to be the ones doing the marketing.
There are many issues to think about. Who writes the script for telemarketing? Who makes the calls? The author can do it himself or his employees can do it. What about the issues associated with having employees? Who trains the employees? Who pays them? One other option is hiring a telemarketing company. The company and the author negotiate a price and then the marketing company does everything. This saves the author from having to deal with all these issues, but it also adds an extra expense.
There are two other ways of doing front and back-end systems. The first is done by attaching one front-end system with the back-end system of another company. This is done by finding a company that already conducts a seminar dealing with the same subject the book was just written about. The company that sold the books, the front-end, licenses out to another company that is conducting the seminar, the back-end, the right to contact the people who bought the book and invite them to the seminar. The author must trust the seminar. The company must have a good close ratio. The author asks questions like, how do they generate sales and how many contacts are required to generate one sale. If the author is making a profit margin of 25 percent, give or take 5 percent, he's getting a good deal. It can also be done on a per-lead basis.
The other method is to attach a back-end system with a front-end system. The back-end company can buy the contact information of the front-end company's customers and either charge a 25-percent profit margin on every sale, or charge a set amount for every lead. It can also be done the other way around. The back-end can be attached to a front-end company. The company finds an author who is selling a book about the subject that company is running a seminar on.
Finally, there are brokers that find companies doing front and back-end business and facilitate the meeting of these two companies.
