Sales Process Back End
By James Atkinson, LLB
Sales Funnel - Sales Process Backend: Managing the customer backend process time consuming so you need software to do the job. This is the heart of your internet business – it's not just mechanical, you need to THINK about this process very carefully.
Initially, when your business is relatively small, it’s quite easy to do. But as prospect and customer numbers increase or if you sell a larger number of products, you will need software to manage your sales relationships. Our own integrated CRM software easily does all of the functionality mentioned below.
The way in which your backend evolves depends entirely upon your own business model. The following image shows a typical backend schema. The image is a very stylized process. In reality a prospect / customer’s journey through your product offerings is much more chaotic:
Let’s unpack the image above. Many direct marketers create a product ladder (see the next article) which they use as a guide to sell products within an online marketplace. You’ll need something similar to the product ladder for your backend. Ideally, your backend is determined by your survey - see the series of articles entitled market segmentation.
Your sales process needs a source of prospect leads. Leads are simply qualified prospects with whom you want to build relationships that eventually lead to sales.
1. Lead Sources
The image shows six lead sources for your products.
Current Customers - often your best lead source for your backend products are current customers who have already bought from you. You have made an initial sale and these customers are already on your eMail Marketing data base. When your prospect buys for the first time and becomes a customer you can channel them down various sales paths.
For example, you can send them to an eMail Marketing campaign for Backend Product 1 which markets the product in a series of autoresponder eMails and eventually directs the customer to Backend Product 1’s sales letter. Then, eventually over time you can direct the customer to the sales pathway of Backend Product 2, Backend Product 3, Backend Product 4 and so on.
Many online direct marketers operate their online business this way and the process, although expensive, can work very well. One consequence of this method is that the product offerings tend to focus on the "Next Best Thing" - that is, the marketer keeps selling products to the customer as the next best thing.
If you follow the green arrows from “Current Customers” at 1 above you’ll see that customers may go direct to Backend Product 2 or jump to Product 4 and so on.
However, don’t simply rely on your NEW customers to buy your backend products. You need to market EACH backend product with its own educative, social content, PPC, and referrer process. You should maximize the selling capacity of each of your products.
PPC - PPC is expensive as a source for leads - but IT WORKS! However, to get a return on investment you have to "make the numbers work". It's a lot easier to obtain leads through PPC than through SEO and social marketing. Persuasionworks provides a PPC Lead Generation service. Without a content and social network to provide leads you’ll probably use PPC to obtain the bulk of your leads.
Going Direct from PPC to a Sales Letter
You can see from the image that some marketers send prospects direct from lead sources to a sales page. I show this in RED because there are many reasons you should avoid this method - especially if you are using PPC for leads. The main problem is persuasion. It’s difficult to be persuasive if you’re trying to do EVERYTHING in the short space of a sales letter.
Trust is paramount in human relationships and it is no less important in eCommerce. The earliest humans needed quickly to answer the question: friend or foe? Accordingly, we are hardwired to quickly assess people we newly meet as friendly or threatening, trustworthy or not. The internet is a low-trust environment especially when trust has not been established. It takes time to develop trust.
Relationships bond people to you and then drive multiple sales. Pre-built relationships and trust building do most of the heavy work of persuasion – BEFORE the sales letter. Thus, for those marketers who direct prospects straight from ad to sales page it’s no wonder that conversions usually remain around 1% or below.
So, think about it – you’re losing more than 99% of those prospects for whom you are have PAID TOP DOLLAR for the “privilege” of reading your sales letter.
Marketers are trying to squeeze a trusting relationship into one sales letter – an almost impossible task! And here’s another reason why you should NOT go direct from say PPC to a sales letter.
In my research and interviews I found that many affiliates only focus on the first sale without an email list or a viable backend. These advertisers are usually forced to drop out quickly. PPC is expensive and costs keep getting higher and higher.
Advertisers and affiliates often just break even or actually LOSE money on the first sale. This makes an email list and backend sales process absolutely essential.
Google imposes difficult criteria for advertisers to qualify for a high Quality Score and thus get lower ad prices and better ad positions:
A low Quality Score = Higher PPC Costs!
Of course, the criteria for achieving a high Quality Score are not made public, so only advertisers who understand what Google wants will thrive. For many businesses, driving 100% of their traffic with PPC is NOT cost-effective! Google does not usually index sales pages unless there is relevant content involved.
On the other hand having CONTENT pages connected to Sales Pages increases Google Quality Score and thus reduces PPC costs. So, link your PPC opt-in / sales pages to content.
I have argued with “gurus” about the above point. Many of them assert that ANY links from opt-in / sales pages are a distraction. Yes, this is correct but you need to do this nevertheless – if you want to reduce your traffic costs.
I have done experiment after experiment with Google’s Quality Score. PPC costs ARE reduced when you link PPC pages to content. This applies only to PPC opt-in / sales pages.
If you are concerned about click distractions, you can create separate sales pages from say an email campaign and exclude the content links. That is, with separate sales pages from emails, you don’t need to worry about Google’s Quality Score.
Other Marketing - there are of course other forms of lead generation. Aside from your content, social media, and PPC you can obtain leads from, wholesale online ads, banner ads, lead generation companies, newspaper ads, TV – any source really that can bring in prospects.
SEO and Social Marketing - SEO and social marketing can bring in a large number of leads. The investment in content and social advocacy is certainly worth while - but it's a long term proposition. Sometimes it takes months to rank high on search engines. In relation to social media the problem is compounded because it's a difficult media to use as a primary source for leads. Social media works well as a support mechanism after you have captured the lead. See Step 5 for further discussions on SEO and social marketing.
Joint Ventures - When you trade online its sometimes quite profitable to go into a joint venture with a competitor or two in the same marketplace. For example, the internet marketing and the foreign exchange marketplaces are very 'incestuous'. In those markets there's a constant need to sell new products - see 'The Next Best Thing'. Put another way, competitors and joint ventures can be a good source of leads.
Affiliates - For merchants, affiliates can be a wonderful source of leads. Many 'super' affiliates build up hundreds of thousands of leads in their particular marketplace. They then refer those leads to merchants for a percentage of the product price. Affilate commissions can range from around 3% to 75%. You will need affiliate software to properly manage your afffiliates. Affiliate management software is built in and integrated into the Persuasionworks system.
Opt-ins - It's quite difficult and expensive to get leads online. The conversion rate on direct PPC to sales page is often under 1% and seldom hits above 2%. Of course there are exceptions. With the high cost of PPC it's difficult to make a living if you don't have a system to capture leads. You MUST have an eMail Marketing opt-in system. Please see - eMail Marketing. The Persuasionworks system automatically integrates eMail Marketing into you CRM, Analytics, eCommerce Shopping Cart, Business Process, and CRM.
2. Backend Segment Management
After your various lead prospects have opted-in, you need to manage them. One message does not fit all! This is the process by which you choose products for your market. I suggest you start with one product and then build up your product list – See Steps 2, and 3.
You’ll need to carefully segment your prospects and then manage the various messages that go out to different segments. Try to market without segmentation. Please review the series of articles: market segmentation and our service offering: prospect segmentation.
3. Backend eMail Management
I have found that an eMail marketing campaign is the best way to persuade and direct your prospects and customers to your backend product sales material. I discuss eMail Marketing further below. Different messages to your various segments go out via eMail. You must therefore nurture and manage your lists and messages very carefully.
For example, if you have five products for sale, there is little point in sending Product 2’s autoresponder email campaign to a customer that has already bought Product 2.
Your messages must be planned and structured - together with all your other content and marketing. A great deal of persuasion occurs in your eMail Marketing Campaigns. See: The Role of eMail and Persuasion.
For a model of how eMail Marketing works see: Direct Response Model.
Persuasionworks Premium Busiess Software integrates an eMail Marketer with Customer Relationship Management and makes managing backend processes a breeze.
4. Backend Sales and Delivery Management
You can see at 4 in the image above that prospects and customers are directed to separate sales letters for each back end product. The leads either go through the usual opt-in and email marketing process or are referred directly from JV partners or affiliates (the red lines).
Let's look at how some marketer's 'ladder' their products.
Sales Funnel > Sales Process Back End > Product Ladder
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