What Is Your Company’s Ratio?

What matters most in building a business is the ratio of new client sales to existing client sales — i.e., resales. This affects the amount of time and energy you put into the front end versus the back end.

In the information publishing business, I like the number of new sales to be about 10 times greater than the number of back-end sales. In terms of dollars, the average back-end sale is usually much higher than the average front-end sale. In the investment newsletter business, for example, back-end sales range from $300 to $5,000. Front-end sales range from $20 to $100.

If your business made 1,000 back-end sales last year, you should have your marketers establish a goal of at least 10,000 front-end sales this year.

Achieving that goal will not be easy. Front-end sales are tough. But it has to be done. Front-end sales are the ones that grow your business.

So explain the importance of this to your employees. Then connect the compensation of your key creative and marketing people to those front-end targets.

Before we get to your wealth, health, and happiness, a word about our new format: As you have no doubt noticed, we are changing things up a bit. And some of you like the changes and some of you don’t.

We continue to read every note you send us and make adjustments as we go. We are also doing split tests to determine whether certain changes result in greater or less reader response.

Our goal is a newsletter format that is easy to read and yet delivers a higher level of quality advice. This process will take another week or so to complete, but you can expect to be 100 percent satisfied when we are finished.

Source: ETR

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