Using Backend Products to Create Lifetime Customers

Coming up with new products and services is a lot of work. But it provides you with a great return on your investment; besides, if you don’t create new products and services for your customers, your competition will. This article will help you see what new items you can offer your customers, and show you how to get the most mileage out of your new creations.

Why Bother?

There are a lot of people who wonder why they should go to the effort of creating new products. Why should you bother to go through the process of creating more products for your web site, more features for your customers to come and use, more packages for them to take advantage of? If you do decide to go through the work of developing and promoting new products, how will you know which ones will succeed and which ones will be a waste of your time (man hours) and hence your money? And finally (and one of may favorites), how will you market your new products and services to one off subscribers who do not come regularly to your site?

The Reason

Manufacturers call it brand management. They spend millions of dollars on developing new products, and another few million on customer research. They do this because they know that new products mean new sales, unless you create a product that competes with your own original product (think Coke and Diet Coke). Online, you create new products and services at a minuscule cost, and still enjoy the benefits of increased sales. Your sales may not double overnight, but you will notice increased activity as your users check out your new products and services.

Is it Only for Sales Sites?

Is it only ecommerce sites that can offer back end products? Well, for an ecommerce site, more activity translates to more sales and reflects on the cash flow and the profit margin. All websites offer products and services, however, and all web sites need lifetime customers, whether they “sell” products or not. Nowadays every web site runs some form of advertising or the other, and more traffic is good because it can increase your rates for text links/banner ads, and translate to more clickthroughs on any other form of advertising.

If you constantly introduce new products and features to your web site, activity on your site (translate activity to sales) will jump thirty to fifty percent. Take a look at The Developer Shed network (we will look at loads of other illustrations as we go on). Imagine you are a fan of open source programming, and hence subscribe to Dev Shed. As you happily surf the Dev Shed site, you inevitably notice the ASP Free web site, and the Dev Archives and the Scripts sites. And your latent desire to know more about “other” programming languages will find expression. If other such back end products did not exist, and all that Developer Shed focused on was Open Source, you would have to leave the site and go somewhere else (Microsoft Developer Network website perhaps) else to get information on Windows programming.

So not only can you increase activity by offering new services, but you actually avoid losing potential customers who leave your site to seek out other sites that offer services related to yours. That’s right, if you do not offer new services, you can lose customers!

To begin to create life time customers, you must create your entire website with this idea in mind. You cannot just think “let’s make a sale.” If you do, you may make that first sale but give a bad impression of yourself by not replying to complaints on time, or not responding to emails for days. Even if you do close the sale, the user will justifiably complain about the after sales service.

You actually have to see the sale as the start of a relationship. If you successfully complete your first sale to a user, or give a pleasurable first user experience with your website, and successfully gather information which will allow you to send them new offers in a convenient manner, you are well on the way to obtaining a customer for life. A very successful online model is http://www.amazon.com/. This company sends offers after an initial buy, makes the buying experience fun,  collects information that will enable them to continue selling to you, and also is aware of your taste (since you have already bought at least one book from them).

And if you simply offer content, then ensure that your opt-in list is kept up to date. New subscribers should be welcomed, unsubscribe requests should be quickly attended to. I’m taking it for granted that you do have an opt-in list up and running, or else how will you market your lovely new products? It is essential that you have an opt-in list so that you can collect information that will allow you to continue sending offers to your users.

Note that it is actually easier to resell to a user than to close an initial sale. Since trust and credibility are already established, the user is not afraid that you are out “phishing.” And since your service has being tested, the user will know what to expect in terms of delivery and after sales. Closing the first sale in a satisfactory manner is the most important thing you can do, and the first step to getting your “lifetime customers.”

Michael Porter wrote two books which explain product expansion and competitive advantage. They are Competitive Strategy and Competitive Structure and were published by The Free Press, a division of Macmillan Inc. How do they relate to SEO? They give excellent models for creating products that will have an advantage over the competition. For simple product strategies for online businesses, however, keep reading.

Information Products. Whatever your web site sells, whether it’s software, SEO tips, or shaving cream, you can write an e-book or create a training DVD on it (I’m not sure how you would do that for shaving cream, but I know it can be done). You can constantly offer new books and DVDs; indeed, this is all that some sites do, they just get your name on their mailing list, and send you a new book or DVD that they or a partner have written every month. You can promote this kind of material by offering a teaser (a free e-book or pod casts), then you can offer potential customers your “special discount, one week only.” This looks great on your site and in your ezine.

Supplementary Products. This is where you can run away with market share, especially if your original product has gained a widespread following. Excellent models of this include Microsoft, who first created operating systems, then started building applications that run on their operating systems (supplementary applications). Now they create “bundled packages.” Since people that use operating systems will use office applications, such as spreadsheets, database packages and word processing packages, Microsoft offers such packages. In a similar fashion, web design companies offer hosting, database administration and security, ezine creation and emailing services, and search engine optimization.

Complementary Products. These are products which are actual complements to your main product; they are needed along with your product. For example, if your site offers books and CDs for sale, then offering book and CD racks is complementary. If you offer tutorials on Apache, then downloads to new versions of Apache count as a complementary product.

Upgrades. This is a no brainer for software development and hardware companies. It is very possible with info products also; e-books can be upgraded as new information come up.

Note that while you are developing your products, you have to stay in touch with what the rest of the competition for your back end product is doing, or you could make errors in service delivery and pricing. A good way to keep your product line fresh, however, is by selling other people’s products. This saves you the time and the energy of creation, and you can concentrate on the aspect of marketing and promoting your products (which is what we will go into next). A good place to find some products (a lot actually) is http://www.clickbank.com/.

There are two parts to this aspect, the medium and the timing. The major medium for marketing your back end products will be through email, so having an ezine is essential if you want to be able to continuously market your new offers, be they complementary, supplementary or informational. There is really no other way of marketing your back end products. If you own a new site, you would place your product and optimize your page using organic listings and paid listings.

To market your products, you have to segment your database, and you cannot sell your product to “everyone.” Everyone includes children and hermits living on mountains with access to the Internet. The more information you have on a user after a sale the better. Since the user has given you his/her money, parting with their personal information should not be a major problem. By personal information I mean street address, gender, nationality, occupation, date of birth, any thing that can help you segment your database fields and hence send a targeted email.

Some of your back end products that will appeal to women, some will appeal to men, others will appeal to entrepreneurs, still others to technical-minded people. Also segmenting your database will help you when you are creating (or choosing) your back end product. Knowing what will appeal to your users will cut down a lot of your work.

The Timing

When can you start selling back end products to your users? When would you offer new information, services or content to your users? Immediately of course, so the best time to give your users an offer is immediately after they have bought your product; immediately send them a thank you note and offer a complementary, supplementary or informational product listing advanced ways to use your product or other product-related tutorials.

You can make holiday offers, birthday offers or “just for you” offers. You can make new offers on purchase anniversaries. And of course, you can make new offers whenever you actually have new products to offer.

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