Most companies overlook a unique concept in marketing known as the host/parasite relationship model. This area of marketing makes everything a business achieves 100 percent more profitable. Host/Parasite Relationship Models occur when two companies enter into a joint venture for mutual gain. Basically, this means that two gambling companies offer each other’s business for substantial profits.
The average company spends millions of dollars to connect with consumers through advertising and marketing. Most businesses want to build goodwill and develop a loyal base of consumers and prospects for their products or services. The cost of converting a new customer or prospect is immense. The host and parasite business relationship allows parasite companies to gain new customers and prospects by gaining sponsorships and offering incentives to the clients of other companies. The parasite gets a very specific pool of prospects based on the deal set up, while the host earns revenue without any cost of sales or overhead by receiving a certain percentage of the parasite’s sales. This is a win-win for both the parasite and the host.
The mutually beneficial relationship between parasite and host allows for different business combinations that are synergistic to open up vast areas of unrealized gains. For example, the parasite company can show the host company how to make money simply by endorsing their company. The host earns money by endorsing another business and recoups investments made in all business assets. The host also receives an income stream by depositing a percentage of the future sales of the parasitic company.
Consider this scenario
A real estate agent can make money after selling a house simply by using the host and hanger-on business model. Most real estate agents miss many opportunities to earn more money after selling a house.
Once escrow closes, homeowners never hear from the agent again. Real estate agents can increase their income simply by offering to arrange services for new families in a city or town. The agent would set up the family with all the necessary services and then receive a percentage of the sales from each company that sells something. The real estate agent at this point becomes the host bringing businesses into the family and earning a percentage of the profit.
The host and parasite relationship means going beyond conventional sales and marketing routines and taking advantage of related products or services that customers need, or offering products or services to other business customers in a related industry. The cost of targeting new customers and prospects is high. If the concept of host and parasite is used effectively, a business can target other businesses that cater to its type of consumer.