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Partners in Profit: How to Use Host-Beneficiary Marketing to Grow Your Business


Establishing a new business – or growing an existing one – can be difficult. You might have limited money to spend on advertising and promotions. Maybe you put all of your available resources into setting up your store and buying inventory. Perhaps you are operating on a shoestring budget and need to save money wherever you can. Whatever the reason, you are in the market for ways to grow your business without breaking the bank. One way to do that is by creating a partnership with an existing business.

The Benefits of Partnerships

When a new business pairs up with a successful one, it is called host-beneficiary marketing. You are the beneficiary, and your partner is the host. Before we talk about how to identify and approach potential partners, let’s talk about why it can benefit both parties to team up. If you own a start-up business or you’re breaking into a new market, the benefits to you are obvious. You get access to an established customer base. They are qualified, meaning that they are in the market for what you’re selling.

The benefits for your partner are a bit different. They get to provide their customers with a special offer or promotion that they can’t get anywhere else. As long as they are convinced that you will provide good quality and service, it’s an easy decision for them. Their customers will feel valued and special – something every business wants – and you will get the benefit of attracting new customers. Everybody wins.

Finding Potential Partners

The first thing you need to know is how to identify potential partners. It doesn’t make sense to pair up with a business that is a direct competitor. They’re not going to want to dilute their sales by sharing their customers with you any more than you want to share yours with them. However, you do want to pick a partner who is competing for the same market.

That might sound confusing, but here’s how it works. It is very important to choose partners whose businesses are complementary to yours. For example, let’s say that you just opened a bakery specializing in wedding cakes. It doesn’t make sense to pair up with another bakery, but it makes a lot of sense to look for successful wedding planners, bridal shops, and florists who might be willing to join forces with you. Any prospective bride or groom is going to want services from multiple vendors.

To identify partners, look for complementary businesses in your area and ask these questions:

  1. Is the business I am considering successful?
  2. Do they have an established clientele?
  3. Are our products or services complementary?

If the answers to all three questions are Yes, then you know that you have identified a potential partner.



Pitching to Potential Partners

It is important to approach the partners you have identified in the same way you would approach a customer. Most importantly, the focus of your pitch should be on the benefits you are offering, not the features of your product. Here are some tips:

  1. Know what you are prepared to offer before you meet. Let’s use the same example as we did before. You have opened a bakery and you want to pair up with a successful wedding planner. Decide beforehand what you are offering. For example, you might offer a free cake tasting and 20% off the price of a cake. The offer has to be attractive – something that will offer real value to your partner’s customers.
  2. Bring samples where appropriate. You don’t want to bombard your potential partner with information, but it’s a good idea to offer some evidence of what you have to offer. Using our baker as an example, it might make sense to bring a sample of your most delicious cake for the wedding planner to try. A florist might bring a floral arrangement. You want to demonstrate what you can do.
  3. Be professional. It’s important to make a good impression. If you come into your meeting and you aren’t prepared, you decrease the chances that a successful businessperson is going to want to team up with you. Have your ducks in a row and know what you are going to say.
  4. Follow through on any promises you make. If your potential partner wants to do business with you, it is extremely important to follow up quickly and professionally. You might be providing your partner with materials to pass on to their customers. For example, in some partnerships you might be providing a sales letter, postcard, or even an email for them to share with their list. Make sure whatever you give them looks great and is professionally written. Now is not the time to be sloppy.
  5. Be open about other partnerships. If you are talking to several local business owners about partnerships, make sure to disclose them up front. The last thing you want is to be accused of deception or dishonesty. If you do partner with more than one company, they will be unofficially linked by their involvement with you. It’s only fair to make sure they know about it first.
  6. Consider offering a return incentive. If you’re just opening your business it might not seem like you have much to offer. However, it might sweeten the deal if you volunteer to reciprocate when you are more established, or even to offer a share of the profits. It might cost you some money up front, but it will be worth it in the long run.

The most important thing to remember is that you must choose partners whose businesses complement your own. It makes no sense for a bakery to partner up with an auto-repair shop. They might have a few customers who happen to be in the market for a cake, but those customers will be in the minority. The goal of this type of partnership is to find qualified customers who are highly likely to be in the market for your product or service. If you do that, host-beneficiary marketing can be mutually beneficial – and a great way to get your business off the ground.

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About the author

Sanjay Sauldie

Sanjay Sauldie, born in India, grew up in Germany, studied mathematics and computer science at the University of Cologne and did his Master of Sciences (M.Sc.) at the University of Salford (Manchester, UK) on digital disruption and digital transformation (2017 ) and was trained at EMERITUS (Singapore) in the MIT method of design thinking (2018). He is the director of the European Internet Marketing Institute EIMIA. He was awarded the Internet Oscar "Golden Web Award" by the international world association of webmasters in Los Angeles / USA and twice the "Innovation Award of the Initiative Mittelstand" and is one of the most sought-after European experts for digitization in companies and society. In his lectures and seminars, he ignites a firework of impulses from practice for practice. He succeeds in making the complex world of digitization understandable for everyone in simple words. Sanjay Sauldie fascinates his listeners with his visual language and encourages them to put the valuable tips into practice immediately - a real asset for any event!

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