For new businesses, finding ways to market your service or product with little or no budget is a challenge.  One creative way that you can do so is by developing a host-beneficiary relationship. In this article we have a look at host-beneficiary relationships and identify five steps to making them a success for your startup.

What is a host-beneficiary relationship?

In simple terms, a host-beneficiary relationship is where Company A (the host) agrees to let Company B (the beneficiary) deliver a sales message presented as a special offer to people who are Company A’s customers or clients.

For the beneficiary company, it’s a simple and relatively inexpensive way to get your marketing message out there to large numbers of highly qualified prospects with the tacit endorsement of the established host business. And for the host, it offers the opportunity to reward their customers and generate some goodwill with a sales offering that is presented as a gift from the established business.

Let’s illustrate this better by way of some examples. A framing shop could buddy up with a photographic supplier’s 200 customers and offer a free photo framing. One new computer support business offered a voucher worth two free hours of computer repair to the small business clients of a local accountant. So, as you can see, the host-beneficiary relationship has benefits to both sides of the partnership. But what makes for a successful host-beneficiary relationship? Below we identify five steps that will help you create a partnership that works both ways.


  • Be definite about the target audience.

Who exactly is your target audience? What is their gender, age profile, likes and dislikes? The more characteristics you can identify, the more potential hosts you can approach.

  • Identify possible local hosts that serve a similar demographic.

Focusing on a similar demographic will not only bring people in with your initial offer, it also increases the likelihood that they will become regular customers.

  • Have a targeted offer for each prospective host.

The free photo faming offer may not have worked so well for a host company that had nothing to do with photography. Make sure you come up with a free or heavily discounted offer that has a high perceived value for the consumer at a relatively low cost to you.

  • Spend time on developing a pitch.

Give careful thought as to how to present your pitch to the potential host. Emphasise what’s in it for them. Be clear that it’s a great way for the host to reward their loyal customers at no expense and very little effort.

  • Make it easy for the host.

Have a draft offer letter ready for them so they can see how easy it will be to participate. Some businesses may let you insert the offer in one of their regular customer mailouts or emailed newsletters. Others may charge for the use of their database or will ask you to pay for a separate mailout. Be flexible as it’s a small price to pay for access to the host business’s database.

Make sure that you also spend time on thinking about how you will convert these new prospects gained from the relationship into long-term customers. A bakery, for example, that gave away a lamington also handed out a buy five get one free loyalty card as a way to encourage repeat business.

Host-beneficiary relationships, therefore, offer the potential for real benefits to hosts and beneficiaries. For relatively little outlay, they offer a win-win situation for both parties so make sure you consider host-beneficiaries as part of your startup’s marketing strategy.