Does It Make Any Sense to Turn Your Business Into a Club?
Issue #2005
- WEALTHY: Are your investments ready to suck you dry? (Andrew Gordon)
- HEALTHY: 5-minute fitness while you’re on the go (Craig Ballantyne)
- WISE: William Butler Yeats on associating with the right people
ALSO IN THIS ISSUE:
- Why an exclusive club means more clients and more money (Michael Masterson)
- Networking from your seat in the audience (Ilise Benun)
- It’s Good to Know… about reproduction
- Add "tropism" to your vocabulary
He’d Have Called Them Crazy - Or Worse!
With the Internet, it’s now possible to spend no more than a few dollars, write a couple of very basic ads, and have instant access to millions of potential customers all in a matter of minutes.
If anyone had told Jim Sheridan he could bank thousands in just 24 hours. . . without any product of his own. . . without spending a penny on getting it or promoting it, he’d have justifiably said they were nuts.
But Jim made a decision that he would overcome his skeptical nature and give it a go. Boy, is he glad he did! That one deal alone banked him $187,296 in one day.
The great news is - you can copy Jim’s plan exactly. The program is called Instant Internet Income and I guarantee it does exactly what it says it does.
Take a look at how Jim brought in over $175,000 in a single day!
- Patrick Coffey
The Walking Dead of the Stock Market
By Andrew M. Gordon
Bankrupt companies are the zombies of the stock market, ready to suck you dry of your savings if you let them. Filing for Chapter 11 does not remove them from the exchanges they’ve been trading on. And there’s nothing stopping you from investing in them. For one thing, they’re hard to identify. If you look them up on commonly used financial sites like Yahoo, you won’t see the word "bankrupt" on the summary or main quotation page.
But if you do end up investing in one of these walking dead, the odds of ever again seeing your money are overwhelmingly against you. Take Delta, for example. Since they declared bankruptcy in September 2005, their stock price has doubled. That’s CRAZY. Delta’s bankruptcy reorganization plan says that "current holders of Delta stock will receive no distribution of new Delta stock." Their securities will simply be canceled when the re-org plan is complete.
DO NOT INVEST IN BANKRUPT COMPANIES. If you want to throw away your money, go to Las Vegas. Or bet on the horses or the New York Yankees winning a world series this year. (I’m a Red Sox fan, y’all.) Even if those companies are taken over by other companies offering a generous payout, that money (by law) goes first to creditors, then to bondholders, and last to shareholders. The payouts almost never trickle down to shareholders. It’s a sucker’s game. Don’t play it.
[Ed. Note: Andrew Gordon, ETR’s financial expert, is the editor of our new investment service, INCOME.. Each month, he uncovers income-generating stocks that promise safety (first and foremost), along with much higher-than-average profit potential.]
"Dear fellow artists, why so free / With every sort of company, / With every Jack and Jill? / Choose your companions from the best; / Who draws the bucket with the rest / Soon topples down the hill."
William Butler Yeats
Does It Make Any Sense to Turn Your Business Into a Club?
By Michael Masterson
I was hoping it would never happen, but it did. And now that it’s happened, I am glad. Because it’s given me a good idea.
I got a letter from AARP (the American Association of Retired People) today inviting me to join. They said their "records show" that I hadn’t "registered for the benefits of AARP membership," even though I am "fully eligible."
Registering is easy. All you have to do is fill out your date of birth and send them a check: $12.50 for a year, $21 for two years, or $29.50 for three years. The benefits? "The resources and information you need to get the most out of life over 50."
Specifically, you get a bimonthly magazine on health, fitness, food, money, travel, etc., an AARP Bulletin that "keeps you informed on current legislation and issues that affect you most," free health guides, travel discounts, a low-interest credit card, and lots of insurance offers.
AARP might be one of the most successful direct-mail operations in existence.
Founded by retired high school principal Dr. Ethel Percy Andrus in 1958, it evolved from Andrus’s National Retired Teachers Association, which helped its members get health insurance in the days before Medicare. So many non-teachers contacted the group that Andrus decided to change its name and open it to all older Americans.
Today, with 35 million members and counting, AARP claims nearly half the 50+ U.S. population in its membership. Retirement is not a requirement for joining. In fact, the organization says that 44 percent of its members work full- or part-time.
Shira Linden of WebProNews notes that AARP has recently moved away from a mass approach to member acquisition, and has also adopted a more targeted approach to marketing its products to members. Instead of using the same standard direct-mail packages (which attempted to appeal to everyone), they are taking a segmented line of attack. The organization has started testing and tweaking products, offers, topics, and language in an effort to better reach specific groups, such as new or longtime members, the 50 to 59 population and other age groups, and others that they consider to be distinct markets.
In preparation for the baby boomer boom, AARP is trying to shake off its old, stodgy image. Chief Brand Director Emilio Pardo calls his company "an organization for vigorous working people," not old timers on the shuffleboard court.
Changes include a revamped logo, a blog, and the centerpiece: a $100 million+ ad campaign, including TV ads with a punk rock soundtrack that are geared partly toward baby boomers and partly toward the next generation of prospective members, those currently in their 30s and 40s.
I am sure the membership fees don’t begin to cover the cost of the marketing, let alone the fulfillment of AARP’s benefits (mostly publications).
AARP The Magazine has - at 22.5 million subscribers - the largest circulation of any U.S.-based magazine. Full-page, four-color ads cost nearly $450,000. Advertising revenues are great, but, according to AARP’s 2005 Annual Report, the cost to produce and send out AARP The Magazine,as well as secondary publications, to members was $165 million, with only 65 percent covered by advertising.
The real money for AARP comes from the fees and/or commissions they get by introducing members to various insurance and annuity programs. At $379 million, the 2005 Annual Report lists royalties and service provider management fees as its top revenue source, followed by membership dues at $229 million.
The bottom line: AARP is a very successful business that works because its customers perceive it to be a friendly, benefit-oriented club.
What’s So Good About Clubs?
I like clubs. In fourth grade, I started the He-Man-Women-Haters club, which provided mostly moral benefits for the boys who joined (at a nickel apiece). A few years later, I was able to get a dollar a year from boys who wanted to join my Junior Police Club. In high school, I was president of a fraternity (gang/social club) that raised money not just through monthly membership fees but also with illegal door-to-door raffles.
Those early experiences taught me a valuable lesson about the psychological benefits a club can offer:
- Fraternity: the camaraderie of like-minded people
- Purpose: the sense that, by merely being a member, you are advancing a good cause
- Status: the immediate social standing conferred by acceptance into a limited group
As a marketer, I incorporated those deeper benefits into the many clubs I started as businesses, including several that ended up servicing tens of thousands of members and generating revenues of tens of millions of dollars per year.
Direct marketer Edward Nash and David Frey, a marketing consultant, know the power of what I did. Nash, author of Database Marketing: The Ultimate Marketing Tool, says that "there is a sense of recognition [with club memberships that] reinforces the customer’s relationship with the company and makes them feel special."
Along similar lines, Frey wrote in Business Know-How (a small business-advice website and newsletter) about his wife’s reluctance to close a bank account she hadn’t used in years because she was a "charter member" of the bank. She was paying fees for services she wasn’t using because, said Frey, "belonging" made her feel appreciated on a deep level.
Certainly, before a club can work, all the benefits extended to its members have to pay off. Arthur Hughes, in Strategic Database Marketing, says the first step is to calculate the lifetime value of each customer to figure out if what you’re spending on maintaining a database, mailing out letters, and sending e-mails will bring in enough sales.
Once you’ve taken those issues into account, turning your ongoing business into a club can have substantial economic benefits. For example:
- Upfront marketing can be easier and more effective because of the perceived added value of membership.
- Repurchases should increase because of customer loyalty.
- Higher-end ancillary products can be introduced as part of an upper-echelon level of membership by taking advantage of the customers’ desires to rise up the club’s hierarchy.
- Membership fees can create an additional source of revenue.
- Endorsement opportunities for related and ancillary products can be significant. (Customers are more likely to buy an advertised product if their club recommends it.)
- Membership renewals (including lifetime renewals) can provide a predictable and substantial stream of revenue.
- Referrals can create extra business.
The bottom line: A club can mean more new customers and more money from existing customers.
There are two things to consider when looking at turning your business into a club: Should your business make that change… and, if so, how could you actually do it?
Here’s an example of a club you could start: a restaurant with a VIP diners’ club that offers members exclusive invitations to a monthly dinner and wine tasting featuring exciting new recipes.
You’d offer a fixed-price menu for $75, although Gold Level members would pay only $50. You would invite only members of the club. And the head chef, sommelier, and restaurateur (you) would act as hosts for the evening. You could also offer a single VIP table on a particular weekday, which would help boost sales on a usually slow night. This exclusive table would garner interest as everybody else in the restaurant craned their necks, checking out the table and wondering what is going on.
The basic elements of a club that are at work in this example:
- Association with like-minded people
This is the fraternal aspect of the club. If you sell gourmet food, for example, it makes perfect sense for your customers to share their similar interests with each other. You reinforce this camaraderie with a forum for your members to keep in contact.
- A sense of social advancement
Clubs provide a sense of exclusivity, a sense that their members have more refined tastes than regular people. This only works if there is a natural way to provide a more sophisticated, not just more expensive, version of your product or service.
- Financial benefits
Your club members are presumably your best buyers. You already know that 20 percent of your buyers contribute 80 percent of your profits. So your club should cater to that 20 percent. Your back-end sales increase when you accommodate those frequent and loyal customers.
- Hierarchy
You can create different levels of exclusivity within your club. In other words, the more a club member is willing to spend, the higher level she can attain. (Think silver, gold, and platinum memberships.) You can create an incentive to move up in the club by setting up a visible hierarchy that is reinforced through well-advertised discounts for members at higher levels.
The type of club I’m talking about is a new kind of back-end product or service you can add on to your existing business. But, sometimes, it is possible to convert your whole business into a club. And in that case, all the same rules apply. You have to create the sense that you’re appealing to like-minded people, that you’re going to give members privileges regular people don’t ordinarily get, and that you’re raising their social status in some way.
Turning your business into a club could forge stronger - and more profitable - relationships between you and your customers. How can you start changing your business into a club?
[Ed. Note: Learn how you can be part of an exclusive group of 25 to 50 ambitious businesspeople that Michael will be leading through an elite 5-day program that can help you dramatically increase the profitability of your business here.]
How to Invest in the Hottest Sectors at Just the Right Time
Massive money migrations occur all the time in the global markets…
When the stock market falls, bonds rise. When the economy falters, consumer staples and utilities heat up. And when things slow down in one part of the world, you can bet there is an economy somewhere else screaming higher.
I have developed a system that can help you identify the top performing sectors of tomorrow… and which markets are due to lag. Click here to learn how you can double the market’s return.
Reader Feedback: ETR’s "One Big Idea" Approach Produces $24,000+ Payday
"Congratulations on your 2000th issue!
"I’ve been reading Early to Rise for about 4 years. I receive more than 400 e-mail newsletters and RSS feeds every week, and I dump most of them. But I read almost every issue of ETR because the street savvy insight always gives me something that will improve my health, wealth, or business dealings.
"I recently deposited a check for more than $24,000 in royalties for an information product that I developed with the help of Early to Rise. ETR suggested focusing on One Big Idea rather than 5 or 6 - and that was the defining moment for the product.
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- Marc Charles, editor of ETR’s Profit Center Dispatch
Turn Your Hotel Room Into a Gym
By Craig Ballantyne
Hotel gyms have a reputation for being tiny, ill-equipped, and crowded at peak hours. So next time you’re on the road and need to stick to your workout plan, here are a few exercises that can turn your hotel bed into an impromptu exercise device.
Beginner Routine:
- The incline push-up. Instead of struggling through full push-ups, place your hands on the bed to reduce the difficulty. Lower your chest toward the bed and push back up to the start position.
- The bed-squat. Stand at the side of the bed, facing away from it. Push your hips back and lower your body until your butt rests on the bed. Then push through your feet to return to the standing position. (You can use a chair instead of the bed.)
Advanced Routine:
- Advanced push-ups. Place your feet on the bed and your hands on the floor. Sink down, bending your elbows. Then push up until your arms are straight.
- The advanced bed-squat. Lift one leg off the ground and point it straight ahead. Push your hips back and lower your butt to the bed as slowly as your supporting leg will allow. Extend both arms straight ahead for balance. When your rear end touches the bed, push with your supporting leg to return to the start position.
Alternate between the two exercises, doing 8 to 12 repetitions each. Do up to three sets for a quick five-minute workout.
[Ed. Note: Craig Ballantyne is an expert consultant for Men’s Health magazine. If you’re looking to burn fat, build muscle, and quickly step into the body you have always wanted with just three workouts each week, check out Craig’s fat-loss system, Turbulence Training for Fat Loss.]
Networking Tip: Get Contacts to Come to You
By Ilise Benun
Wouldn’t it be nice if you could make qualified connections to a whole bunch of people at a networking event - without doing a lot of legwork? Here’s how: Stand up and ask a question.
Instead of just listening, participate. During the initial Q&A, introduce yourself and ask a question that reveals your area of interest. Establish yourself and your interests to the group, and people with similar interests or concerns will flock to you afterward to introduce themselves to you. You never know where those encounters might lead.
[Ed. Note: Networking expert Ilise Benun is the author of Stop Pushing Me Around. Get more networking strategies with Ilise’s free e-newsletter, Quick Tips from Marketing Mentor.]
It’s Good to Know: About Reproduction
The largest human cell is the female ovum. The smallest is the male sperm.
(Source: MadSci.org)
Start Making Money Today
Interested in getting a nice little side-business going on the Internet? Or maybe even from your living-room table?
But you don’t have too much money, you don’t have too much time, and you’re not exactly Bill Gates when it comes to technology. Sound familiar?
A lot of people are in the same boat. The good news is that ETR has heard you. And now we’ve done something about it…
We’ve asked our colleague Marc Charles to be on the lookout for profit opportunities that can be run from a kitchen table, your desktop or out on the road.
Criteria? They’ve got to be inexpensive, easy to start, and still have great income potential, but without a lot of red tape.
They say when you’re first getting your feet wet with a side-business, the most important dollar to make is the first one. Well, Marc is an expert at taking beginning entrepreneurs and showing you how to make that first buck. He knows, because he’s done it dozens of times for himself, his family and his friends.
If you’ve been dreaming about starting your own business… now you can get started for about the price of 2 lattes.
And get this - you could be making money literally just hours from now. Imagine the feeling of finally getting a side business launched - TODAY!
- Patrick Coffey
Word to the Wise: Tropism
"Tropism" (TROH-piz-um) is the involuntary tendency of an animal or plant to move toward or away from an external stimulus.
Example (as used by Geoffrey Wolff in a New York Times review of Heyday by Kurt Andersen: "[Evil] is afoot and brutality the quotidian, but Heyday is also a sweet book, with a tropism toward redemption and happy endings."
[Ed. Note: Become a more persuasive writer and speaker … build your self-confidence and intellect … increase your attractiveness to others … just by spending 10 VERY enjoyable minutes a day with ETR’s new Words to the Wise CD Library.]
Michael Masterson
Copyright ETR, LLC, 2007