Now here’s a summary of Chapter 8 – “The Iceberg Effect”.
No, you are not seeing double, the name of this Chapter is the same as the book’s title. So why does a book about Affiliate Marketing have a title that seems to have nothing to do with marketing of any description? The answer is; what the prospective customer sees in the first instance may not be all the customer is offered during the entirety of the customer’s relationship with the seller. Just ask the ghost of the captain of the Titanic how big the little block of ice he could see floating on the sea, or so he thought, really was!
It’s not only in Affiliate Marketing that this technique is employed. Order a burger and when you come to pay, you will be asked if you would like chips (fries to you Yanks) with your burger. Similarly order a main course in a restaurant and you will be asked if you would like a soup or appetizer first, and when your main course is finished you will be asked if you fancy a dessert. All at an additional cost, of course.
There are only three ways to grow any business
- Acquire More Customers
- Sell More Products To New Customers at the Point of Sale
- Get Your Customers to Buy from You More Often
1. Acquire More Customers
This subject has been extensively covered in previous chapters of the book. In particular, Chapter 5, “The 4 Core Areas of Focus.”
2. Sell More Products To New Customers at the Point of Sale
If you have not already done so, when, not, I hope, if, you pay the $7.96 required to acquire “The Iceberg Effect” book you will be offered two, what are known in the trade as “up-sells”.
Unlike the examples of fries and soup mentioned a few paragraphs ago, these up-sells are more expensive than the original “front-end offer”. In Affiliate Marketing this is very important. By giving away “The Iceberg Effect” for free, only asking for a contribution of $7.96 towards the postage and packing costs, Dean is losing money on every front-end “sale”, as you would too if you were in Phase 2 or 3, as Dean is, as explained in the previous chapter.
Dean also pays us, his affiliates, who he calls “partners” a nominal $1 for every book given away, therefore, to regain losses incurred with the initial “sale” of “The Iceberg Effect” up-sells must be of a higher value than the front-end offer, whatever that may be.
However, to avoid creating any mistrust from your new customers, it is also very important that up-sells are NOT compulsory, and new customers do not feel obliged to buy them. Therefore up-sells must not be over-priced and must enhance the value of the front-end offer.
3. Get Your Customers to Buy from You More Often
You must continue to follow up with customers even after they have purchased something from you. As long as the customer feels that he or she has received value for money from their previous purchase or purchases, they are more likely to buy from you again, rather than from another supplier. This is especially true when it involves high-ticket, expensive products. The following is my analogy rather than Dean’s. If you need all the plumbing in your kitchen renewed, you are more likely to give the job to a plumber who, in the past, has quickly and effectively fixed a dripping faucet in your bathroom than to a plumber you have never met before.
THE BIG PICTURE
Returning to the more important analogy, Affiliate Marketing compared to an Iceberg, the small visible part of the iceberg above the waterline is akin to the “Frontend” of your business. In contrast, the large unseen part of the iceberg beneath the surface represents the “Backend” of your business,
The Frontend
The frontend of your business is where you get to know potential customers, remember them by getting them on your email list, and, more importantly, they get to know you. It can be compared to a small specialty shop counter where small items are sold to passing customers. The image on he left, appears to be a camping shop, so presumably out of sight in the storeroom in the back are large expensive family multi-roomed tents.
The shop assistant probably earns a salary, but imagine for a moment, like an Affiliate Marketer, he was paid only on a commission basis. If so, after convincing the female customer that what he was showing her satisfied her needs, he would then suggest some more products that, if she bought them, would enhance the usefulness of what she was buying in the first instance. If she agreed, the shopkeeper would earn more commission.
The main lesson that you, as an Affiliate Marketer must learn from this is, that you must be aware of the up-sells being offered by the product owner and ensure that he or she will pay commission on those up-sells. This goes at least part of the way to overcoming the difficulties highlighted in Chapter 6, The Death of Traditional Affiliate Marketing.
The Backend
In the frontend of an Affiliate Marketing business the marketer spends time and/or money acquiring customers and potential customers for very little monetary return. Unless a customer buys all up-sells offered, the owner of the products will almost certainly lose money on the sale, and the affiliate will probably not earn enough commission to cover the cost of acquiring the customer, never mind the cost of acquiring the potential customers who have yet to buy anything. So what’s the point of this fruitless activity? You may well be asking. The answer lies in the backend of the business.
The biggest advantage of the backend over the frontend of a business is that the cost of acquiring customers and potential customers has already been paid, and can now be discounted. It is best practice that the owner of the products will follow up with buyers of the initial offer, whether up-sells were bought or not. The follow-up emails must contain details of more expensive items that prospective customers did not know were available when they first joined the affiliate’s list, represented by the submerged part of the iceberg. Of course, this does not mean that the affiliate cannot promote high-ticket items simultaneously with the product owner. The backend of a business is where the big bucks are made as customers’ trust in the value of the products and services being offered grows, along with their trust in both the affiliate and the product owner.
As an affiliate you must be sure that you earn a fair commission from all backend profits sold to customers that were originally introduced to the scheme you are a part of by your efforts. It is unfair if the product owner benefits 100% from a sale to a customer you paid for in the first instance with your time and/or money. This is true whoever has written the final email that has clinched the deal.
Cheers
Phil