back end selling, what is your opinion?

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back end selling, what is your opinion?

Postby Susanne on Fri Jun 26, 2009 9:28 am

I'm seeing a "new" internet marketing technique pop up everywhere and I'm interested in your reaction: A free product is offered, all you have to do is enter your email address. The next page that opens wants your credit card number to charge a nominal shipping and handling fee. After that you go to a "customization" page where something else is offered for sale, usually at a mid range price of $27 to $79. Whether you buy that product or click "no thank you" the next page offers a special deal on yet another, more expensive product.

The process continues on sometimes for 5 or 6 different, increasingly expensive, offers. If you do buy even the cheapest product, you get automatically signed up for an ongoing subscription to a membership site or a newsletter that you get billed for monthly, whether you wanted it or not. Is this a comfortable practice for you? Am I over sensitive or is this a slightly slimy business technique?

Car dealerships have been using almost the exact same technique forever. Once you agree buy a car the business manager helps you with the financing and registration, but also often tries to sell you extended warranties, fabric stain repellent coating, special paint sealants, etc. The logic being that you are already in a buying mood and more receptive the those offers.

All of those products are priced 2-300% over the real cost - I know, I used to work as a business manager. Truthfully, that's where the car dealers make most of their profit, not on the sale of the car. If you allow them to arrange your financing, for example, they get a percentage of the interest you pay every month. I couldn't keep trying to sell people stuff I knew was so overpriced so I had to leave that business. Consequently I may be biased now and not the best judge of this current practice :shock:

What do you think, are these kinds of offers an acceptable business model?

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Re: back end selling, what is your opinion?

Postby htwfh on Sat Jun 27, 2009 3:14 pm

Hi Susanne,

Using an OTO (or a few OTO upsells) is a perfectly acceptable sales method. One is merely offering other products in which the customer might be interested.

However, I get ticked at two underhanded things used with OTO upsells, both of which you mentioned.

I get angry at duplicitous selling like thinking you're buying one thing and in fact you've somehow agreed to multiple purchases (like a membership site). I don't use this method in my own selling and I haven't fallen for it as I read through the fine print, but many don't take the time. Unfortunately, the use of this kind of selling hurts all online marketing as previous victims become 'gun shy' with their next possible online purchase.

It's illegal for a marketer to sign someone up for a continuing (costly) monthly subscription unless the customer agrees to a TOU or other agreement that indicates that they are purchasing the membership in addition to their chosen product. Like I said though, many folks don't bother reading through all the fine print attached to a purchase, particularly if what's being bought is a service instead of a product, or if the product is software.

I'd think that a customer who was stuck in such a position and having gone through the refund process would be really mad with the seller. So, in these days of whistle-blower sites, the seller risks their reputation (one of the most important closing motivators a seller possesses).

The other thing that ticks me off is having to wade through too many OTOs for one purchase. I'm at the point where if I have to go through more than two OTO upsells (I prefer just one upsell), I just close the site and continue to look elsewhere for my product. It takes more time, but my opinion is that if a marketer is placing more than two OTO upsells then he/she doesn't respect the customer's time and efforts to purchase from their site. If that's the case then how can you trust them to treat you respectfully if you have a problem or need a refund, etc.

So one or two upsells is okay and acceptable IF the upsells are related to the original purchase, five or six upsells in an offer is ridiculous.

Duplicitous marketing is never okay and should be reported to the appropriate regulatory agency.


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Re: back end selling, what is your opinion?

Postby BethinArkansas on Sun Jun 28, 2009 4:11 am

Actually, this is not a "new" sales technique. Upsells have been around for years. I'll look at one other offer; then I'm gone. Plus, if they already have my email address before I decided they were someone I did not want to do business with - when I get their first email, I unsubscribe to their mailings.

My thoughts are that if you're offering a freebie, give a freebie. Then do your upselling in the freebie. It's not that uncommon for eBook authors to give away a chapter in hopes that you'll see value in owning the whole book.

My husband recently paid $15.99 for some trial software. It's fully functioning for 30 days. If he decides he wants to continue with it, then he'll pay a gadzillion dollars for it. Everything is upfront, even the upsell. I much prefer this type of marketing.
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Re: back end selling, what is your opinion?

Postby Susanne on Mon Jun 29, 2009 9:11 am

I like what Brian said, offering one or two related products, like extra battery pack and tripod when someone orders a camera, for example, that makes sense. Being completely upfront and straightforward with what's being offered makes sense too. I can only image that those who offer one thing then try to keep selling you 5 other things, each at greater and greater cost (like $1500 for a few CD's and a marketing newsletter! :( how ridiculous) or try to manipulate you into a long term membership, those folks won't be around long. Someone looking to make a quick buck, get in, get out and move on, will make those kinds of offers that try to cheat and manipulate people. I think those are called Black Hat marketers.
The more experienced I get, the more easily I recognize the bad guys - usually by the flashing lights and tons of exclamation points on their web sites :wink: Since I help people with SEO and site building, I come across a lot of scummy marketers as I search the internet for marketing ideas.

I just wasn't sure that what I considered scummy, underhanded, used car dealer type of tactics was seen as acceptable by everyone else. If that is the type of marketing that is considered normal, I won't last long in an internet business.
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Re: back end selling, what is your opinion?

Postby KellyM on Mon Jul 06, 2009 2:20 am

I don't think the underhanded techniques are considered normal in this business. I think people appreciate honest business practices, and I don't think that will ever go out of style. ;)
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Re: back end selling, what is your opinion?

Postby lancehibner on Fri Jul 31, 2009 7:45 am

I had a customer purchase a membership to a safelist I was running, but he then decided that it didnt work for him. He requested his money back, which I happily supplied, but added to the end of the email that he may like to try a different way of advertising, and I was an affiliate for a company which could offer him an alternative.
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Re: back end selling, what is your opinion?

Postby dadeon on Fri Aug 07, 2009 12:52 am

You cannot ignore upsells anymore. You simply have to do it. The really good marketers have been doing it for years. I think the rest is only catching on now.

This is very important with PPC traffic. You need to convert clicks into sales as soon as possible. By having a cheap(er) entry level product you can quickly cover the costs of your traffic. Y make money on the backend.

As a rule of thumb you simply need to cover your PPC costs with the first sale. This then effectively "buys" you a customer. If your follow up strategy is good and you upsell effectively you can make as much as 10 times that from one customer.

if your cpc (cost per click) is 20c, then set your entry level product to $20. If you convert at 1% then you break even on the front end.

All you have to do now is to put an even bigger and better offer in front of your customer WHILE they are in the buying mood. This is proven to work. Just think of a supermarket aisle - they cleverly place certain items at the checkout because they know when you get to the till you are already in a buying mood, so adding another item to the trolley won't be nearly as hard as placing it on a shelf somewhere else in the store.
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