6 Market Research Strategies for Hyperlocal Startups
For new businesses entering the hyperlocal sphere, identifying an audience of potential users or clients — whether that’s as broad as smartphone users across the U.S. or as narrow as yoga instructors on the East Coast — is critical. By conducting in-depth market research, and investigating the needs of their target market, hyperlocal vendors can determine everything from potential pain points and market segmentation, all the way to competitive trends and ideal pricing structures.
Hyperlocals shouldn’t take a one-size-fits-all approach to market research. A strategy that worked great for one startup may be a total failure for another. While many successful hyperlocals have been systematic in their qualitative and quantitative market research measurements, others have taken a more relaxed approach by cold calling potential clients and simply asking what they’d like to see.
Here are six strategies for conducting marketing research as a hyperlocal startup, from executives at firms that have been through before.
1. Interview early adopters. “Reach out to people who are an ideal fit for what you’re thinking about making. [Before launching inDinero, I] talked to dozens of small business owners about their accounting problems. I learned about what they did, who they purchased services from, what they liked and what they didn’t like. I just called friends who run their own businesses. I also had a bunch of small business users who came in from the PR influx, and I emailed them to set up in-person visits to get feedback.” (Jessica Mah, inDinero)
2. Run a market analysis. “We ran a huge market analysis, including a competition study and long discussions with industry leaders and industry analysts. The analysis confirmed that it was a niche market, so we decided to launch the conceptualization of the solution.” (Alexandre Rambaud, Agendize)
3. Cold-call businesses. “In each category or vertical of interest, I personally cold-called several businesses in the Bay Area and secured 15 minutes of time with owners of businesses. I indicated to them that I was an entrepreneur interested in learning about their business and not in ‘selling’ them because, well, I had nothing to sell them then anyways. I tried to understand what worked for them and what didn’t. I tried to elicit pain points. I compared notes between businesses and tried to form my own understanding of their pain points.” (Saumil Mehta, LocBox)
4. Ask open-ended questions. “I strongly believe in face-to-face interviews where potential users can come with a lot of insights and strategic information. This is why startups should ask open questions to customers and really pay attention to what they have to say. It’s also important that startups should meet with users in their own environment.” (Alexandre Rambaud, Agendize)
5. Show mockups to potential users. “We mainly focused on consumers, consumers, consumers. We wanted them to validate the idea and the concept before anyone started developing the online scheduling app. With the help of designers, we were able to draw some mockups in order to show the concept to potential users and customers. Then, we organized two focus groups where potential users were able to interact with visuals and give us input.” (Alexandre Rambaud, Agendize)
6. Gather commitments to validate an idea. “Once I had my value proposition dialed in, I visited several businesses, showed them a simple PowerPoint pitch deck, and attempted to test a low subscription price for my software to see if they would verbally agree to pay it. For a few, I actually collected small subscription amounts to validate that I actually ‘had something’ by way of customer commitments.” (Saumil Mehta, LocBox)
Interviews have been edited for length and clarity.
Stephanie Miles is a senior editor at Street Fight.