By David C. Rich
Starting up a business has its own headaches and then to compound it, getting customers seem to be one of the hardest things start-up business owners face in their business. The high costs of advertising is not making matters any better and not to mention the fact that consumers these days are inundated with so many marketing messages that they barely pay attention to any of them.
Even if you’re able to scrape up some money for marketing and advertising, you’ll find out sooner than later that you’re not getting the desired results from them- that’s if you’re getting any results at all. Businesses fail especially because of the lack of cash flow. If you don’t market effectively you won’t get good results and then you won’t have cash flow; and getting results means getting customers to patronize your product or service.
If you’re a start-up (even if you’re not), the fastest way to get cash flowing into your business is a little-used method that involves forming what we call “host-beneficiary” relationships. The idea is that you enter into a relationship 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. In this case the established business is the “host” and you’re the “beneficiary”.
With this type of arrangement the start-up (the beneficiary) can instantly reach large numbers of highly qualified prospects with the silent, unspoken endorsement of the established business (the host). If you can get the host to actually endorse you to his clients, then better for you.
The host is willing to participate in this because it’s a way to reward his loyal customers without incurring any costs. You the start-up gain new customers, while the established business gains goodwill.
A simple case study example: One start-up that successfully used this technique was an interior decorator. She approached an up market spa and a high-end restaurant and offered to give a free 30 minutes consultation to their customers as a thank you gift to them.
She gave 500 gift certificates to each of her host partners. When she delivered the free consultation, because she was very good at what she did, she got a number of clients who paid her good money.
Host-beneficiary marketing is actually a simple and relatively inexpensive process that will deliver solid results if you follow a few basic rules:
1. Define your target audience and be as precise as possible. “Men 35 to 55” might be a start, but it’s not good enough. You need to create a detailed profile of your target customer. The more precise you are the easier it will be to find potential hosts and generate quick results.
2. Identify local businesses that serve the same market segments as you. That way, you would not only bring people in the door for your initial offer, but also increases the likelihood that they’ll return to give you repeat business.
3. Develop a clear offer for each prospective partner. Your offer could be a free or deeply discounted product or service that has a high perceived value for the consumer with a low cost for you.
4. Talk to your prospective partner, highlighting the benefits to the host business. You need to let them know that it’s a way for the established business to reward their customers at no expense and with practically no effort.
5. Take action and implement quickly. You can give the host business gift certificates or providing a draft “offer” letter that can be sent to the host’s customers on the host’s letterhead. This will help put the plan into motion quickly. It will also show the partner how easy it will be for him to participate.
6. Develop a strategy to convert first time customers to repeat customers. This, after all, should be your long-term goal. The strategy is to get new customers at little or no upfront cost, and then getting them to come back and patronize you again and again- which should be easy if their first time experience with you was pleasant.
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 spending money on ads that may not produce results, you can tap into a targeted group of consumers en masse to jump start sales.
____________________________________________________________
David C. Rich is a business growth and marketing expert specializing in helping business owners improve profits and grow their business. Get more free business growth resources from www.smartbusinessbigmoney.com