The Value of Back End Products

We just ran a successful workshop with 25% of the participants purchasing seminar packages (aka, the back end product) that were easily 15 times higher than the workshop (aka the front end product)  fees.  The result was a great energy and morale booster as we scrambled to put everything together in less than 3 weeks.  Suffice to say, the trainer was jumping up and down with joy. He wanted another one in July.

That is good news for us, as it means more business.  Now, those who have done marketing for consumer products and seminars will know that it is tough for a new products entering a saturated market. You have to be really creative to pull customers  from another pond to your pool.  The customers today are smart to compare features, benefits and price before they make a purchase. It is not surprising that many seminar promoters give out free tickets to fill the room.  Yet, we managed to have 100% PAID participants.

We suggested to the trainer that past graduates be allowed to attend the next workshop as a review for free. Not only that, he can invite 2 guests for free too. From experience, we knew that participants are more ready to sign up for advanced program (aka the back end product)that cost many times the workshop  fee, when they know that they have a friend who has done so. So having past graduates in the room to offer testimonies or help to answer questions can be especially important and helpful.

Yet the trainer disagreed. He felt that he offered such good value that everyone should pay for his 3-hour workshop.

One of my team members  put up a strong argument:

We all are fully aware, we bring in “big” value to the audience however we also need to be realistic, audience only know our “big” value when they are in our room. Right now, not enough people know about you and the massive value you are offering. To offer a low fee or even free seat to selected people will mean there is a low risk barrier for people who have not heard of the program to attend. Until they appreciate our values, until we have earn the rights, we should serve first and think about making money later. Anyway, money is not in the front end but is all at the back end.

Exactly! The money is not at the front end. It’s at the back end. I’m sure you know that you can buy a Canon, Epson or Lexmark printer for less than US$100. The price is dirt cheap but we all know that the quality offered by Canon,  Epson and Lexmark is excellent. So where do they make money? From the ink cartridges! If you are a heavy users, you can finish 2 cartridges or more of coloured ink every month. That’s almost the price of the printer. The lowly priced printer is the front end product that baits you; the money is found in the ink cartridges, also known as back end products. So in seminar business, the 3-hour workshop is the front end product and all other programs and merchandise offered during the workshop are the back end products that really bring in the dough. Some trainer and seminar promoter were all prepared to lose money on the front end product, because they know they can recover the loss at the back end.

There’s wealth when there is value offered. There ‘s no wealth when there’s no value offered.

Now, if you are running a business? Do you have back end products that bring you buckets of gold?