After years of buying cars, I decided for the first time that a lease would fit my circumstances better. Picking the car I wanted with the leasing specialist’s help was more what I would call a "consultative sell" than the adversarial process I was used to, which was a nice change. When a basket of fruit arrived at my company’s reception desk the next day, I was flabbergasted. For that matter, so were a lot of other people in the office. I'm sure that simple thank you has repaid the car dealer many times over.
What if you’re in a business with narrow margins, or what if you simply can’t afford to increase your costs with an out-of-pocket thank you?
Consider a twist on the host-beneficiary relationship
Usually forming a host-beneficiary relationship involves a start-up company partnering with an established business who caters to a similar target audience. The start-up promotes itself to the established company’s clientele through a special offer presented as a gift from the host business, and they both benefit. The start-up has instant access to a qualified customer base, and the host can reward customers without any cost.
But there’s nothing that requires the beneficiary to be a start-up, or, for that matter, there’s nothing that says a start-up has to initiate the relationship. With a little effort your established business can gain appreciation, respect, loyalty, and cashflow, while your partner gains qualified prospects, credibility, and cashflow. It’s a win-win. Actually, win-win-win, because your customer benefits, too.
Here are some tips on how to find a partner, how to set up the relationship, plus some common obstacles and advice about how to overcome them.
Find a partner
First decide which part of your business you want to promote. You should thank anyone who walks through your door, but in terms of a thank you that costs you, those should be based on how you want to drive your product/market mix. You may want to encourage the sale of some products or services more than others, or you may want a different thank you's for different products.
Next, determine what other businesses have a customer base similar to your own. If you run a printing business you might want to partner with a computer repair company. A hair salon might partner with the jewelry store next door.
You need to develop an offer that will work for you both—something with a high perceived value but low cost. The printer might say thank a customer with two hours of free virus detection and removal. The hair salon might offer their customers free jewelry cleaning.
Establish a relationship
Selling the idea to prospective partners is the next step. You need to emphasize that you’re offering them a way to acquire qualified customers with lifetime value at minimum cost, that there is no risk of lost income because you don’t sell competing products, and that you offer them implied credibility. And you obviously want to emphasize that you’re open to alternatives since they’re in a better position to know what works for them. Make it clear that you’re willing to start with something simple, and learn together. And above all, make it something fun.
Finally, you need to define who’s going to be responsible for what, what kind of a schedule is realistic, how you’re both going to measure success, and what your respective exit triggers and strategies will be.
Overcome the obstacles
Fear is the greatest obstacle to a successful host-beneficiary relationship. The beneficiary may worry that, as the host, you’ve ensured the customers will have less to spend when they visit. Or they may worry that you may somehow want to take away their existing customers. The solution is to identify and deal with such concerns up front, and openly collaborate on handling others that may crop up during the relationship.
Greed is another problem that could become an issue. Perceived differences in the benefit may make a partner reluctant. The solution is to prevent this obstacle form becoming an issue, by making sure both parties are not only comfortable with the relationship to begin with, but that both are willing to adjust as the strategy develops—basic management, in other words.
Control in any relationship can be an issue. The solution is to focus on what’s good for the customer first, make sure you both stay independent, and make sure that the whole project is fair and equitable—that it really is a win-win-win.
Finally, a word of caution. Saying thank you through a host-beneficiary relationship is a great way to build customer loyalty and repeat business without adding additional expense. But don’t use it to make up for deficiencies in product or customer service. Saying thanks isn’t the same as apologizing.
Tom Harnish is a serial entrepreneur. Always on the bleeding edge of technology, he learned what works (and what doesn't) leading projects, products and companies to success (mostly). He can't play a lot of musical instruments.