Professionals say: "If you advertise the product that you are selling, you are a bad seller!" For example, it might be wrong to assume that the well-known fast food chain McDonald's sells hamburgers and cheeseburgers.
In fact, the sale of hamburgers is not profitable. The well-known "cutlet sandwiches" are sold almost at cost, without bringing a penny (cent or penny) into the pockets of the franchise owners. The main part of the profit is the mark-up on "Coca-Cola", french fries, sauces and other products with, at times, a terrifying mark-up:).
Known to every man (and not only), Gillette reusable razors are essentially free - the buyer pays their money for the cassettes (blades) included in the kit. And when it comes time to change these blades, we are unpleasantly surprised - the price for razor cassettes for the machine is the same (if not higher) than for the originally purchased machine.
This is called a two-step sales model, in which the “locomotive” that “drags” the entire business with it is the so-called “front-end” product. The main (main) ones that bring immediate profit are called back-end products. As a rule, these are goods or services with a high margin, which is simply pointless to advertise “in the forefront” - most likely, the number of purchases (transactions) will be small or not at all.
Thus, the seller of this or that product / service must first of all “promote” the most “popular” product that the client needs with a high conversion rate. Simply put, out of the total number of potential customers (leads) who just entered your store or salon, the maximum paid for the purchase should come out.
One of my clients, the owner of a street cafe in St. Petersburg, was worried about competition. Despite the rather tough approach of local authorities to organizing such a business (especially if cafes are located in the center, on the banks of the Neva), the number of places for "cultural and beer" recreation is steadily growing. Someone tries to give their cafe a “specific” style in order to be different from others, someone expands the assortment, someone, simply, reduces prices.
Based on the specifics of the institution, the owner was offered all three of these techniques at once. The cafe was decorated in the style of medieval England, the assortment was expanded with a variety of snack sets for beer, and the price of the beer itself was reduced to … purchasing!
When Mikhail (that is the client's name) got acquainted with the consulting plan, he fell into, to put it mildly, bewilderment - in fact, all income was based on beer. And chips, nuts and other fish, although they provided income (by the way, very significant), at the same time remained “second plan” products. I, nevertheless, managed to convince the St. Petersburg resident to test the proposed plan and … and so the phrase “oh, miracle!” Suggests itself, but no.
A nearly fourfold increase in sales, resulting in skyrocketing profits, is not a miracle. In this case, Mikhail offered his clients (café visitors) a front-end product - high quality beer at a price significantly lower than that of his competitors. The main source of the stream of income was the very same snack sets for beer with, I'm not afraid of this word, a cosmic markup, which visitors to the "medieval English pub" were excellently buying. Sometimes, and without beer!
If you are a supporter of a healthy lifestyle, but at the same time own a cafe or restaurant, you can offer your clients business lunches at a unique price. Auto shop owners offer a free oil change, benefiting from the sale of the engine oil itself.
For the IT sphere, the front-end product can be a test period for software or a free audit of a corporate computer network for the presence of any type of threat and / or performance improvement, etc. Many training companies have a "trick" - "the first lesson is free."
Summing up, I will say the following. Highlight among your products (goods and / or services) the most popular and interesting to your target customer. Feel free to increase your back-end product margins. Use the existing advertising budget and other sources of lead generation to actively promote your fron-end and … count the profit, which will increase significantly from now on !!!
Good luck with your business and increasing sales!
