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Today I wanted to share a powerful direct response marketing concept I learned from my friend Chris Orzechowski (who also happens to be my mentor).
I have a feeling you’re gonna love this one.
It’s about offers.
If you’re in the DTC space, or sell products/services online, it could transform your business.
Here it is…
Every successful online business operates on the system of:
Front-end offers and back-end offers.
If you haven’t heard of these before, you need to figure out what these are in your business.
Let’s break it down:
What is a front-end offer?
Think of a front-end offer as something that’s most likely to acquire you a customer.
If you’re selling physical products, it’s often your most popular (but not necessarily the most profitable) product.
Example:
When I’m in the market for a wireless speaker, my first instinct is to buy a JBL. Their speakers are their front-end products. Eventually, I realize they also sell gaming headphones, subwoofers, and home audio systems.
I’ve gone from a one-time buyer to owning an array of products from one brand.
In some cases, your front-end product could also be free.
For instance, if you’re selling services, your front-end offer could be a free report.
The whole point of a front-end offer is to acquire a customer, get them on your email list, which then sets you up to sell them other products and increase customer lifetime value (CLV).
Next time you run Meta ads around a hero product and convert a customer, don’t think “Job done.”
Start thinking about how you can nurture that relationship and maximize profits.
Front-end starts the relationship. Back-end generates all the profits.
© the Moat by Chris Orzechowski
3 examples of front-end offers
Let’s take a look at some real-life examples:
1) Apple
Apple has two front-end products: the MacBook and the iPhone.
You’re likely to buy one of these two products first from them.
And if you’ve ever bought an iPhone, you know the deal:
You pay a few hundred bucks (or thousand, depending how fancy you are), and the only thing you get is … the iPhone.
Well, guess what?
You need a charger for your phone as well. That’s an extra $25.
You also might want a pair of matching headphones. That’s $150-$200 more.
Oh, did you say you like listening to music? Here’s an Apple Music subscription. $10.99 a month.
These are all complimentary products that cost very little to manufacture, but are literal moneymakers.
And just like that, you go from a one-time buyer to a bulk, repeat buyer.
2) Whoop
Whoop has a whopping (no pun intended) $3.6bn valuation.
I mean, no wonder when athletes like Cristiano Ronaldo and LeBron James are among your customers.
But it’s not just the celebrities that make it so successful.
It’s their front-end, back-end system.
Whoop only has one product: a wearable fitness tracker that sells for $39.
You might think there’s no front-end or back-end system here.
Well… there is.
Whoop makes all of its profits from their monthly subscription.
The band is the front-end offer. The subscription is the back-end offer.
What they’ve done is make their front-end offer (the band) ultra accessible (you can try it for free for a month).
But once you’re hooked, you’ll pay at least $199/yr for the subscription.
And what’s crazy, their most expensive annual subscription is $399.
That means if you use the band for five years, you pay almost two grand!!!
And if you don’t buy the most expensive subscription initially, they’ll send you targeted email campaigns to upsell you until you do.
3) Von Baer
This is an Italian leather goods brand that sells high-end accessories.
I worked with Albert and Igor for a few months last year. They’re great people and their products are top-notch.
When I built an email automation system for Von Baer, it quickly became clear to me what their offer system is.
Their front-end products are their travel bags and laptop bags.
Their back-end products are leathers wallets, belts, and other smaller accessories.
So, when we built a post-purchase sequence, we focused on cross-selling complimentary accessories to people who had bought one of their leather bags.
Within 12 months, their customer retention rate has increased by 48%!
TL;DR on front-end and back-end offers
Your front-end offer is usually your most popular product (but not necessarily the most profitable).
Use your front-end offer to run ads, acquire customers, and capture email addresses.
Then target these people again with email campaigns to sell your moneymakers (back-end products).
Figure out this system, and you’ll be good to go.