"Discover How I Find Operating Profit Margin Customers That Are
Five Times More Likely To Purchase My Product
- And Get Them To Buy More!"
Have you ever heard of the "Pareto Principle"? If you
haven't, you are missing out on one of the MOST EFFECTIVE
routes there is to bigger profits.
Also known as "The Vital Few and Trivial Many Rule," the
Pareto Principle was named after the Italian economist who
observed in 1906 that 20% of the Italian population owned
80% of Italy's wealth.
He then noticed that 20% of the pea pods in his garden
accounted for 80% of his pea crop each year. Coincidence?
Well, it got him thinking...
Vilfredo Pareto applied this 80-20 rule to pretty much
everything - and whether or not you agree with it is your
prerogative. But when it comes to your e-business, you're
missing out on a lot of profit if you don't realize that...
20% of your customers are
RESPONSIBLE for 80% OF YOUR SALES!
With other applications of the Pareto Principle, it's often
impossible to determine the accuracy of the ratio (i.e., 20%
of the food you eat is responsible for 80% of your health).
But in your e-business, you can easily track which customers
are buying customers...
It's a little-recognized fact that at least 20% of people
who have purchased from you once will buy from you again...
IF you follow up with them. One-fifth of your customer base
is just waiting for you to offer them something new.
So if I am not following up with my profit site customers, I´m
actually IGNORING 80% of my business' profit potential!
Operating Profit Margin: Follow Up With Your Key Customers
If I don't follow up with my profit site customers, I´m losing a
LOT OF PROFIT - it's as simple as that.
The fact is, when a person trusts you and likes your product
or service enough to buy from you once, they'll often buy
from you again and again.
Your existing customer base is FOUR OR FIVE TIMES MORE
LIKELY TO BUY from you than a "cold" market... and the
"lifetime value" of these customers is one of the greatest
assets of your business.
Repeat sales can be so profitable that some people even
offer their product or service below cost on the first sale
-- just to get their potential customers to buy (think of
all the mail-order book clubs and CD clubs that let you
purchase 11 books or CDs for a penny!).
Because once people have bought for the first time, at
least 20% of them will buy again... And this backend market
should be where you focus A GOOD DEAL OF YOUR ATTENTION.
You have already cultivated a relationship with your
customers - you have put in the time and money to get their
attention, establish credibility, and close that first sale.
That's by far the most difficult part - not to mention the
most expensive. Think of all the planning, advertising, and
promotional activity that goes into getting those initial
But once you've acquired those customers, you can develop
their "lifetime value." Show appreciation and offer special
incentives to them. Send them "thank-you for your purchase"
messages, renewal notices, and free information. Reward them
for being loyal customers and they'll become even more loyal.
And offer them more products! If they liked what they
bought, they'll buy from you again.
Operating Profit Margin: What To Offer From Site
The most brilliant thing about follow-up offers is that
THEY DON'T COST YOU A SINGLE RED CENT. You've already
dealt with the salespeople, the brochures, the mailouts,
the ad placement, etc.
But now that you've made those initial sales, and in the
process collected the e-mail addresses of your customers,
you can simply e-mail all of your previous customers your
special follow-up offer... so all of the sales you garner
are 100% pure profit!
Of course, you have to ensure that what you're offering is
something your customer base is actually interested in - so
the kinds of follow-up items you offer will depend on your
business. But consider the following types of offers and
think of how they could apply to your business...
2.1. ON MY OPERATING PROFIT MARGIN SITE I OFFER PRODUCTS THAT COMPLEMENT MY INITIAL PRODUCT
For example, if I sold golf clubs, I could offer
customers a golf club bag to carry them in.
But it doesn't have to be quite that closely related
- for example, if you sold memberships to fitness
programs, you could also offer fitness clothing,
fitness books... you could even promote daycare
programs to provide fitness moms with more options!
Even if you have to struggle to come up with an idea
for a complementary product, it will be well worth
You've already got the interest of your customers, so
at this point you have to think of any way possible to
keep them buying, because buy they will... unless you
don't offer them anything!
2.2. I SELL MORE FROM MY OPERATING PROFIT MARGIN SITE OF THE SAME PRODUCT AT A DISCOUNTED PRICE
Show customer appreciation by offering them a "special
discount" on the product they're already buying.
If your product is refillable, you've got it made. Your
"Vital Few" customers will purchase the product repeatedly
over a lengthy period of time - and this gives you a
legitimate reason to get in touch at regular intervals.
But even if your product isn't refillable, you can offer
upgrades, newer versions, improved models, or add-ons to
the original product. And each time you contact your
customer, you can offer a special discount on a new or
related item also - even offer something free to maintain
2.3. USE NEWSLETTER SUBSCRIPTIONS AS UP-SELL OR BACKEND OPERATING PROFIT MARGIN PRODUCTS
Once people trust you enough to buy from you, they'll
likely be interested in hearing more of what you have
Newsletters are also an excellent way to stay in constant
communication with your customers, answer their questions,
respond to their concerns, and provide them with the kind
of knowledge they'll need if they're using your products.
In the process, you will establish yourself as an expert
in your industry and a reliable source of information.
2.4. I TRY SPLITTING UP MY OPERATING PROFIT MARGIN PRODUCT
SELLING IT AS SEPARATE SEGMENTS
For example, if you were selling a book on research
methods on the Internet, you could offer a basic version
for $9.95 to generate a large volume of sales at a low
Then, 30 days later, you could offer them an advanced
version for $29.95 or even $39.95, and increase your
You could sell the smaller, individual parts of your
product separately, but also offer a package deal with
everything included for a bit of a discount. That way,
you'll cover a couple of different price points and
appeal to a wider range of customers.
2.5. TRY SELLING YOUR CUSTOMERS AN UPGRADE
TO THEIR OPERATING PROFIT MARGIN PRODUCT
If they've used and liked your basic model, they'll be
open to suggestion, provided that you can show them why
and how the upgrade is better.
2.6. OFFER SOMEONE ELSE'S OPERATING PROFIT MARGIN PRODUCT!
I know it sounds a bit odd, but as long as the product or
service is not in direct competition with your own, you
can make a good profit (and further develop your
relationship with your customers) by offering a great
backend item as an affiliate.
Joining affiliate programs can be a very lucrative way
to increase your sales. With an affiliate program, you
have the opportunity to give a highly credible personal
recommendation to your customer base (which is one of
the most effective sales techniques) and claim a
percentage of each sale... without having to develop
a new product of your own!
This can be an enormous timesaver and, done right, can
make up a significant part of your business.
In fact, many people earn considerable online incomes
these days just by promoting affiliate products. You
have to do your research accordingly, however, and only
recommend products that you truly believe in before you
can make a business of selling them.
Also, keep in mind that selling too broad a variety of
products as an affiliate will do nothing but confuse
your market - and lose you sales. Keep your focus
narrowed and your niche well-defined.
If you are interested in checking out affiliate programs,
the following are a few good places to look for the
programs that are right for you:
2.7. OFFER INCENTIVES AND INFORMATION TO KEEP YOUR BUSINESS IN YOUR CUSTOMERS' MINDS
You don't always have to be pushing products - in fact,
if you try the hard-sell approach each and every time
you contact your opt-in list, they'll start to see you
as a nuisance.
So offer a "tip of the day" or contest entry to entice
your customers to your site. Stay in touch through
newsletters and discussion groups. Observe holidays
and special occasions... (you could tie in promotions
to these events).
Because while you certainly want to sell more products
or services to this lucrative group, you also want to
balance sales with relationship building... developing
more trust, credibility, and customer loyalty each step
of the way.
Operating Profit Margin Follow-up
Okay, maybe I was wrong... maybe THIS is the most brilliant
part about follow-up offers:
Not only do you not have to spend any money to make follow-up
offers -- YOU DON'T EVEN HAVE TO SPEND ANY TIME!
You can AUTOMATE the entire process using autoresponders
- Send a "thank-you for your purchase and order
confirmation" type of message - you could also
offer a discount on a related item in this message
- Send instructions for use that may also mention your
newsletter or discussion group (you probably wouldn't
want to include a "hard sell" here)
- Follow up with a message a few days after the purchase
that asks how things are going and then offers a discount
on a related item
- Send another message a few days later to remind your
customer of the discounted offer and urge them to buy
before the offer ends or the product runs out
- Send "time to refill" reminders or "time to upgrade"
messages as appropriate
If you use autoresponders in this way, you can start
confirming orders automatically... providing instructions
automatically... and GENERATING HUGE OPERATING PROFITS MARGIN IN
FOLLOW-UP SALES - AUTOMATICALLY!
And when you automate your mailings, you'll not only tap
into the 20% of your customers who will be responsible for
80% of your profits - you'll also save yourself an
incredible amount of time in e-mail chores and customer
Final Operating Profit Margin Thoughts
Focusing on your "Vital Few" customers is the best way
possible to increase your sales through your backend
Once you've done the initial promotion work and made the
first sale, promoting to this highly responsive group is
FREE... and once you've automated the process, it won't
even cost you any time to do it!
As you can see, putting an automated follow-up system
in place is hardly the most difficult aspect of Internet
marketing, though it is definitely one of the most
profitable techniques out there - AND ONE OF THE MOST
But now that you know how profitable it is to follow up
with your key customers, and now that you understand how
the Pareto Principle applies to your business, you can
start running your promotions more effectively and
increasing your operating profit margin exponentially.
And who knows... maybe you can start getting more peas
out of your garden, too!