How to set up a host beneficiary
First of all, what is a host beneficiary? It’s a relationship between two businesses that helps each one make more profit by working together in a non-competitive manner. For example, a hairdresser might do something to help out a beauty salon – it works because ladies getting their hair styled will probably want beauty treatments too. Host beneficiary relationships are also a great way to advertise your business because someone else is promoting your company and people see that as a referral. So how do you go about it?
First of all determine who exactly it is you want to target as potential customers – who is your target market? Think about age, profession, lifestyle, income, location and anything else that you think is relevant to the offering you will be making.
From there you will be able to determine what sort of host business you’re looking for. Ideally they will need to have access to your target market, be non-competitive, have a large database of clients/customers themselves and be willing to work with you for mutual benefit.
The next stage is to decide what the offer is going to be. You also need to think about whether the message is going to come direct from you or from the host business. There’s a lot to be said for the host business to send out the message as their clients already trust them and so are more likely to react positively. It can also be phrased to put them in a good light too – “My colleague Dave is an excellent mechanic and I’ve persuaded him to offer my customers a winter check at cost price – that’s 30% less then others will be paying”. See how it works? As with all advertising you should also make sure that you test and measure the offering and message and refine it over time.
One final thing, if you’re going to run a business successfully then the bottom line is you need to be making a profit. Before deciding on the final offering and how you’re going to promote it you need to work out all your costs. As well as the offer itself which you will probably be lowering the price of you also need to think about any printing or postage costs, phone calls and your time in setting it all up. If, after all that, you can still make a profit then what are you waiting for? Get going!