Raising A Millionaire: Weekly Digest

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Raising A Millionaire: Quote of the Week

"Leadership and learning are indispensable to each other."

  -John F. Kennedy

Raising A Millionaire: Article of the Week
Finding New Customers
If you're a startup, the fastest way to get the cash registers ringing is a little-used method that involves forming "host-beneficiary" relationships with established businesses that cater to a target audience similar to yours. Then you promote yourself to their database with a special offer presented as a gift from the older business.

The beauty of this arrangement is that the startup (the beneficiary) can instantly reach large numbers of highly qualified prospects with the tacit endorsement of the established business (the host). The host is willing to participate because it's a way to reward loyal customers without incurring any costs. The rookie gains new customers, while the veteran gains goodwill.

Six Steps to Success
Host-beneficiary marketing is actually a simple and relatively inexpensive process that will deliver solid results if you follow a few basic rules:
  1. Precisely define your target audience. "Women 35 to 55" might be a start, but it's not enough. Create a detailed profile of your target customer. The more segments you can identify, the more potential hosts you can approach.

  2. Identify local businesses that serve the same market segments. That way, you can not only bring people in the door for your initial offer, but also increase the likelihood that they'll return to give you repeat business.

    For a cigar store, logical host partners might include better men's clothiers, upscale shoe stores, luxury car dealerships and country clubs. And don't forget non-commercial organizations like Rotary or Kiwanis.

  3. Develop a clear offer for each prospective partner. Come up with a free or deeply discounted product or service that has a high perceived value for the consumer with a low dollar cost for you.

    A new computer support business could offer a voucher worth two free hours of computer repair to the small business clients of a local accountant. A jewelry store might offer free jewelry cleaning to clients of a hair salon. A marketing consultant could offer a free seminar on how to run sales to one local newspaper's advertisers. A framing shop might offer free photo framing to a photographic supply store's top 200 customers.

  4. Pitch the plan, highlighting the benefits to the host business. Emphasize that it's a way for the established business to reward their customers at no expense and with virtually no effort. It's also a way to reach out to customers without overtly trying to make a new sale.

  5. Supply a letter for the host's use. Providing a draft "offer" letter that can be sent to the host's customers on the host's letterhead will help put the plan into motion quickly. It will also show the partner how easy it will be for him to participate.

    Some businesses will allow the letter to be inserted into their monthly invoices or newsletters at no cost to you. Others will charge or require that you pay for a separate mailing. It's a small price to pay for access to the host business' customer base.

  6. Develop a strategy to convert redeemers to repeat customers. This, after all, is your long-term goal. Whatever the specific plan, the host-beneficiary method is the single most effective way to quickly attract a critical mass of qualified customers to a new business. Instead of beating the bushes for customers with individual referrals or scattershot ads, you can tap into a targeted group of consumers en masse to jumpstart sales.

    Best of all, you're piggybacking on the success of another entrepreneur who has spent years building a solid customer base. In many ways, this eliminates the need to reinvent the wheel. For a startup facing so many other challenges, it's just smart business.

Raising A Millionaire: Other Articles

12 Great Reasons to Start a Business - Before you dive in check out the following 12 best reasons for starting a business.

Making Your Dreams a Reality -The successful entrepreneur does not keep his or her head in the clouds for long, because the only way dream becomes reality is a plan.

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