PT Barnum of Barnum & Bailey Circus famously once said, “50% of my marketing is wasted. I just don’t know which 50%”.
Every marketer knows finding and targeting the right people in your market is critical to your sales success. Sales people waste huge amounts of time prospecting – sorting the wheat from the chaff.
People who simply aren’t in their target market.
Today we’re going to discuss a way of getting your message in front of exactly the right prospects, accurately and cheaply.
Let me introduce you to the concept of the host-beneficiary relationship, one of the best long term ways of generating a steady flow of business.
Here are some definitions:
Host: A business that already services clients you’d like to get in front of.
The concept: Have the host offer your products or services to their clients.
Why would they do this?
Every business wants to continuously add value to their clients. As such, if you genuinely believed an external product or service which did not compete with yours would add value, why wouldn’t you recommend them? Clients appreciate your thinking of them.
Look around you and you’ll see this in action in many businesses.
Financial Planners work with Accountants. Real Estate Agents recommend Handymen. The wedding reception venue recommends the photographer, cake maker or bridal gown shop. Or the Car Dealership who has a joint venture with finance companies to get you a car loan at competitive prices.
Major department stores do this as well. Every cosmetic counter is operated by the cosmetic company leasing space and providing their own people. Clothing labels do the same thing with sections in Myers and David Jones. They’re leveraging the foot traffic coming into the store.
So how do you go about this?
First of all realise not everyone you approach will be open to the idea. It takes a certain open mindset to entertain the possibilities.
It needs to be a win-win. Talk in terms of the value that you could provide their clients and how they could help yours by promoting each other to your respective client bases. Naturally only do this with people where there is mutual trust that delivery standards will be up to scratch.
And my strong suggestion is you offer to be the host first! This way you’re the one giving first rather than just appearing to want to take. And you keep control and see how the other person operates.
Keep going until you succeed.
Talk is cheap. People get excited over the concept until work is involved. So you will need to drive this and you may have many conversations before finding suitable partners.
Handle the money.
Ideally each party will get an equal number of referrals from the other. But in practice this may not happen for various reasons. It could simply be one party has more clients that can be referred than the other.
So consider a financial arrangement where you compensate by paying for leads that convert into business.
How much should you pay?
That depends on your profit margins and the lifetime value of a client.
Remember, no matter what, you will spend money on marketing and selling activity. Host/Beneficiary relationships reduce this spend so you can afford to give away part of your savings to generate more business.
Now it would be remiss of me if I didn’t mention the types of joint ventures we add value to.
We have mutual relationships with graphic designers and web developers, financial planners and accountants as well as high end strategic consultants.
In every case it’s a mutual win-win. Our clients need graphic design and web development. Their clients need marketing and sales improvement.
Accountants, financial planners and strategy experts who work with businesses wanting to grow send them to us for marketing and selling strategies while we recommend their services to our clients.
If you’d like to be part of our network, give us a call.
Finally, if you haven’t made looking for and setting up these types of joint ventures a priority, I urge you to do so.
And of course, should you need help in working out the terms, creating the marketing material or even selling the concept, we’re here to help. Call us on (02) 9499-7958 to get the ball rolling.
Rashid & Barbara.