When you were a child, did you have a brother or sister who started a club? Kids often do create little clubs in their play. And if you were an outsider looking in, what did you want, at that moment, more than anything else in the world? To join them! Even if they weren't doing anything but sitting around in a club-house, you just wanted to be a part of it.
Apparently we never really out-grow that desire.
Turning people away in your business may seem counter-intuitive because it seems counter-productive. After all, most businesses want more customers, not less. If you have a niche, though, you are already limiting your customer base for positive results. This is another way that can work, too. It may not work in all business models, but it could work in yours.
By creating a set of limits and restrictions, you make your business tempting to others. It seems exclusive so they want to join because no one wants to be excluded.
In his book, BuzzMarketing, Mark Hughes talks about the value of limiting your customer base and refers to a time when he paid a few hundred dollars on eBay for a Gmail account, which is a free email account offered by invitation only. It was free - and there are already many free email accounts out there (Hotmail and Yahoo! are two of the biggest) but this one was by invitation only, so he wanted it. He wasn't the only one to pay hundreds of dollars on eBay for an exclusive email address.
Aside from Gmail, other companies have created a set of limitations - a series of "hoops to jump through" - in order for a person to do business with them. Rental car companies, for example, have legal and risk-management restrictions of requiring licenses and credit cards to rent cars. These restrictions may be in place because of the law, but go and ask a rental agent how many people try and rent a car without a driver's license; you'll be surprised at the number. Car rental is a multi-billion dollar business and people want to rent cars (even if they can't) because it's exclusive.
How do you implement this exclusivity in your business? Here are some ways that work for many businesses. Test one or two before making it a standard business practice in your business, to make sure that it can work where you are.
Memberships: Create a membership list. Implement different tiers, depending on the amount purchased from you. For each tier of membership, offer different bonuses and discounts. For example, in an online store, you can offer increasing discounts as members go from silver to gold to platinum levels of membership. In offline businesses, consider having after-hours events. Here are two effective offline examples from businesses in my city: A local wine store sells memberships and offers its members after-hours wine and cheese tasting social events. And nearby, a new Paintball company opened up. Paintball is no big deal but the company advertised a limited number of openings to buy into their membership (which would give you discounts). They had a huge line-up!
Sign up process: In the rental car industry, they call it "qualification" and although they are simply complying with legal requirements, some rental car companies are bombarded with prospects that bend over backward to qualify. In your business, even if the requirements are small steps (and may be part of the legal process), use it to your advantage.
Waiting lists: One busy writer took a page from the medical establishment and adopted a waiting list of clients. Occasionally prospects do not want to be put on a waiting list, but she says most are relieved to be able to "make it onto the list" and it makes her appear busy, which she is.
By invitation only: Advertise an event for invitation only, but provide a phone number for more details... and a small blurb that says "if your invitation didn't arrive, please call us." A furniture store does this as a way to get a lot of targeted clients in the door at once.
How do you make it work for your business? Don't make the limits too severe, but if you do have limits, make them obvious enough to have clients want to be in your special club.