Strategy 7: Back End Sales
What can you keep selling your customer on an on-going basis?
Take razor blades – Gillette Mach 3 or any other system FORCES you to keep buying the blades. And they’re expensive! So Gillette almost gives away the initial pack – a razor and a few blades, knowing that the profit is in the back end. (I’ve been using Mach 3 for over 15 years – so I shudder to think how much I’ve spent on blades!)
Nestlé produces (in my opinion) some of the world’s best coffee. The brilliance of the system is that the coffee comes in sealed capsules (one to a cup) that can only be used in certain machines (made by major manufacturers like Krups). So you buy the machine (and Nestlé prices it to sell) and you have to keep buying the coffee.
The add-ons are brilliant. Nestlé comes out with limited edition cups and other crockery, different flavours of coffee, and even a carry bag for taking your coffee machine on holiday!
Think about how much money they get on an ongoing basis from people who love their coffee.
Coming back to the BBQ place – they could have sold me far more over the years… Tools wear out, gas cylinders need to be replaced, and the grill and burners rust. If they kept in touch with me, who knows how much more they could sell me?