MindValleyLabs Internet Marketing Blog

Whilst in Los Angeles, I met Brad Antin, Director of Marketing for Centerpointe Research Institute.

He works with Bill Harris, and after listening to both these guys, this is the first of a series of posts in which I’m going to share some key points and interesting things these guys are doing with Centerpointe.

Our partner, Larry Benet "The Connector", was nice enough to introduce me, so I had several conversations with Brad Antin.

Allow me to share Centerpointe’s statistics again. Though you’ve likely heard them before, it’s worth repeating before dissecting some of their numbers with you.

In 2007, their total sales were over $17M, and that is just from the main products they sell. There’s much to learn from them because $17M is VERY good. Throughout our discourse, some very powerful data points came to light.

50% of Centerpointe’s sales come from referrals. I will bet you that today, on any of our websites, I suspect, from gut instinct, that our figures are far below where these guys are.

A referral sale is a sale that’s generated from a friend’s referral, via word of mouth. It means someone picked up a phone and told their friend, "I’ve been trying out this new Holosync® stuff, it’s amazing! You have to give it a shot because it’s helping me have a stress free life, I’m enjoying myself more… I’ve found a Miracle cure, you have to give it a try." 

That’s what a referral is. And Centerpointe is getting half of their business from people passing it on.

When you break it down, that means they generate $8.5M worth of sales because of word of mouth marketing (WOMM). That’s a tremendous amount, by any standard.

If your remember, they sell their front end product for $180. Their average lifetime value per customer (CLV) is $800. This means that they are getting $620 on the back end. That’s another large figure.

They do a promotion twice a year, where they send a letter to their back end –their existing customers – almost like a mini launch to their own list. Their back end promotions bring in between $4M to $-5M per year.

In addition to that, they have set up a specific follow-up sequence for every customer. This sequence includes upsells that they get in the mail, based on which of Centerpointe’s 12 custom made levels the customer is at… (You can buy from them 12 times…that is cool)!

When you dissect this picture and do the math, you start to see that if you take away the back end and the referrals, you end up with $1.5M.

Ask yourself, how can you improve your business in order to get these kinds of results? Do you have enough back end products to increase your customer life-time value?

About the Author

Prior to MindValley Media, Mike was the Head of New Ventures Strategy at eBay where he conceived of the strategies that led to the investment in Craigslist, the launch of Kijiji.com and the acquisition of Skype. Mike has an MBA from Stanford and previously worked for the Boston Consulting Group. He is also a certified Google AdWords Professional.

Check out other posts by Mike

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