Mining "Gold" from your "Back-End" Market
 by Stephen Mahaney

Mining "Gold" from your "Back-End" Market... Understanding the Lifetime Net Value of a customer — by Stephen Mahaney

Let's start by hypothetically assuming that you acquired ten new customers today whose average purchase of $50 each netted you a 50% profit. Can you tell me how much money you made?

Careful, this is a trick question. If you answered $250 your answer, at best, is only partially correct.

You see, the top professionals in business know that REAL profits come from finding a paying customer in the first place... after all, the most time consuming and expensive task any business is faced with today is the process of finding a new customer. The easiest thing to do in any business is to re-sell a satisfied customer -- provided that you have something to profitably re-sell that customer.

Now, if your business involves only one time sales, you may very well be in the wrong business. Businesses that are not positioned to "re-sell", "add-on sell", and/or "up-sell" are typically difficult businesses to become successful in -- because there is no back-end.

In case you do not know what a back-end is, here's the definition --

A business' back end is the revenue that results from the process of re-selling, add-on selling, and up-selling to people who are already your customers. This is considered the easiest "sell" in marketing... and is consistently proven to be a far easier and less expensive sale to close -- as well as more financially productive than attempting to exclusively sell to first time customers because it costs less to do so.

Ok, I know what you are saying... "Oh, repeat customers? Heck -- everybody knows that. That's basic business."

Yes, but how well do you do it? Careful...before you answer that question, read on -- because at the end of this article you may want to change your answer.

Before we continue, let's t...


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