Best commission structure for front end/back end?

Hi Dean,

thanks for the input, some good ideas.
I consider adding some changes to the front end as well as expanding the back end.

I like the forced continuity idea. It's easy to justify as front end and back end actually DO belong together.

There has been a lot of discussion about forced continuity, mostly about offers that did it covertly.

How do you introduce the it to your front end customers? Is it stated explicitly on the sales letter already? Part of the order form? Hidden?

Ralf

Coming at this from a different angle, it looks like to me you may be pricing yourself right out of business.

What it looks like are that your margins are way to low for such a 'support intensive' product, especially if you can't even breakeven on the back end after paying out a commission.

Can you increase your prices up to the next acceptable niche price point? Even a tiny 10% increase across the board on your back end should make a significant different.

Also loss leader products on the front end are great if you have deep enough pockets to absorb the upfront costs until you can make it up on the back end, but from reading the posts in this thread, it looks like your back end isn't priced properly to accommodate for it.

another option is to introduce a high margin product into the mid point of your sales funnel. In your case this should be a low support or no support product like an info product. Use the sales of this product to absorb your upfront costs and pad your pockets before they move further along your sales funnel.

On your monthly back end option to help offset your support costs you could also add an initial payment, something like $47 upfront + $27 per month. Call the $47 a set up fee and don't give a commission on it, but do give a commission on the residual, or flip it and give a commission on the set up fee and keep the residual for yourself.

Just a few ideas for you to consider.

Quote:

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Originally Posted by Ralf Skirr

Dean,. the front end as well as the back end in that case are support intensive.
They are not simple downloads.

So both together must generate the money to fund everything.

As stated in my first post I'm happy to give 100% on the front end, but that means I'm going negative there since I have to cover expenses each front end customer generates. If I then give away 50% from the back end too, the thing will not be profitable.

In other words: there's a reason why I gave the specific options in my first post:
1) 100% for front end - nothing for back end, commission directly to affiliate's paypal account OR
2) 75% front end - 25% back end, traditional affiliate payment: payout once per month for sales that left guarantee period OR
3) 50% front end - 50% back end, traditional affiliate payment: payout once per month for sales that left guarantee period

Ralf

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Quote:

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Originally Posted by Tanner Larsson

Coming at this from a different angle, it looks like to me you may be pricing yourself right out of business.

What it looks like are that your margins are way to low for such a 'support intensive' product...

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Hi Tanner,

thanks for that, makes a lot of sense.

Actually I did not put too much thinking into the pricing so far.
You may be right that I simply have to up the pricing and add some extra margin for the affiliates.

I still don't think that every affiliate program should have payouts of 50% or more including backend, but that probably needs to be tested and will certainly depend on many factors.

Ralf

Every person who buys your front-end product should be given as a bonus:

"Free eBook/CD/Video Just For TRYING (Frontend)"

Basically a one month free subscription into your continuity program. It shouldn't be forced, but it should be "checked" at your order form.

Your affiliates will appreciate the monthly commission, and your conversion on the continuity will be very high.

I learned this from Eben Pagan, who stated in his Altitude program that 1/3 (!) of his $20m business is based on his $19.95/month continuity programs!