Marketing Approaches for On-demand Business Startups - Odtap
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Marketing Approaches for On-demand Business Startups

On-demand economy is the reason for emergence of a number of startup unicorns all over the world. However, it is unfortunate that this very economy is also the reason of a large number of startup failures. The researchers at ODTap find that inefficient marketing approaches make up one of the top reasons for on-demand business failure.
This article shares the most effective techniques for marketing in pre-launch and post-launch phases of startups.

On-demand Consumer Segmentation

The foremost step toward marketing of on-demand business is to perform consumer segmentation based on their interests, regions and a range of factors. Following are the four categories which classify segmentation for on-demand customers.

Demographic Segmentation

This implies grouping the customers in order of their age groups, household incomes, gender, cultural and religious beliefs, and academic qualifications.

Finding the median age and standard deviation enables on-demand companies to assess the interests because people from same generation are more likely to have overlapping choices. The reception of on-demand industries provides one significant example.

Millennial generation tends far more than their preceding generation X toward adopting on-demand services. The generation following millennial is even more inclined toward leveraging from gig economy.

Socioeconomic conditions defining household income also carries a crucial role in success of on-demand business. However, the most significant role is held by beliefs of native population. It would be disastrous to offer a beverage or a meal which is largely discouraged by the local community. Most consumers develop perceptions way too quickly. They are unlikely to return if you hurt their sentiments.

Geographic Segmentation

It is unwise to maintain uniform marketing strategy in each part of the world. Even if you intend to operate in one country, still geographic segmentation is crucial to identify region-specific opportunities and threats.

Also read: Native Tools for On-demand App Development

For instance, it would be impractical to offer bike-based delivery services in regions where whether is inimical. Providing bikes to gig workers would leave you in the middle of huge backlash from public and administration.
Another notable factor is the change in cultural values as you move from place to place. There are countries including the US where deep cultural diversity results in change of behaviors.

Working with clients, ODTap discovered that urban areas, suburban towns, and rural population all have varying interests. Some would prefer quality of services offered by on-demand business, others need ethical consideration from service provider, and again others aim for economical services. Thus, geography has a considerable impact on on-demand services.

Behavioral Segmentation

While demographic and geographic segmentation is performed before commencement of operations in an area, behavioral segmentation makes sense only once the business is up and running for at least a quarter of a year.

This kind of classification evaluates customers’ buying trends and their perception toward services. Companies often use data analysts to collect customers’ feedback from various sources and visualize it. Some of the notable sources of data include review sites, discussion forums, and social media channels.

Also read: On-demand Startup Challenging Superior Rivals

However, they need to ensure the reliability, currency, and validity of data. Reliability in this context implies the authenticity of feedback. There are competitors who place negative feedback to vilify your business. Currency indicates that the data is applicable in the current times. This is significant because a years old dataset would not provide correct perception of contemporary customers.

It should be ensured that data is valid as well. For instance, a company might be offering a range of services. The feedback about one service should not be used to assess about other services.

Psychographic Segmentation

The personalities of customers widely vary. A number of factors shape their thought process. Psychographic segmentation takes behaviors and demographic details and combines them with a range of other factors to forecast future buying trends.

Companies running on-demand business offer multiple kinds of promotional campaigns including discounts and referral bonuses. Many of them also advertise their efforts toward fulfilling social responsibility. The objective is to make an offer which is most promising toward each customer’s challenges.

Also read: On-demand Car Rental – Use Cases and Success Stories

Psychographic segmentation is crucial for building brand reputation. The significance of ensuring higher reputation reflects in the contemporary competition in urban on-demand markets. The customers would switch loyalties if your brand fails to impress them since there are scores of on-demand startups operating in the same market.

Perform On-demand Competitor Analysis

Knowing competitors is as crucial as knowing your potential customers. You need to determine the revenue generation schemes employed by your competitors. Besides, you should find the failure causes of some business models. However, it is also important not to entirely copy the competitors.

“Now if you go exactly where your competitors are, you’re dead.” (Thorsten Heins)

On-demand consumers are always on the look for innovations in services. Thus, you might not be able to make the impact quickly unless the services model has something not implemented earlier.

Although Thorsten is partially true here, yet going too far would also push you out of the loop. This is what happened to BlackBerry – the company that Thorsten was leading from the front before it sunk in the wake of iOS and Android revolutions. BalckBerry leadership was sure that the company would maintain its larger share of corporate market because businesses trust them.

Also read: Rebrand On-demand Delivery App for Your Business

There are multiple on-demand examples where copying or going too far resulted in failure. Shuddle – deemed as the Uber for kids – also ended up with same fate. The business model was too rigid since it targeted a specific niche. It failed to sustain investments for being unable to attract larger proportion of population.

Identify Public Outreach Channels for On-demand Business

Once you perform pre-launch segmentation and competitor analysis, you need to identify publicity channels. Digital marketing is crucial in the contemporary times apart from traditional advertisement over newspapers and billboards. Following are the two highly successful digital marketing channels.

Social Channels

Social media platforms provide the ability to reach customers in their homes. The paid promotions on Facebook and Twitter are highly cost-effective when compared to other options for advertisement. Such promotions remain successful because over 90% of Americans between 18 and 29 years of ages inclusive are actively using social media as indicated in the graph.

This age group also accounts for the ones who place most number of on-demand services orders. The maintenance of social media pages and accounts eliminates the need to frequently run paid promotions because followers keep growing over the time.

Search Engine Visibility

The consumers seeking to adopt on-demand model or the ones intending to switch service providers are likely to find new options over Google or other search engines. Therefore, it is immensely important to be visible on top of the local search results for successful on-demand business marketing.

There are multiple ways to push your brand on top of SERP and maintain the ranking. Be sure that your app – and website if there is one – has search engine optimized content on it. Google ranks results on as many as 200 distinct factors. Adherence to these factors would ensure that you attain and consolidate top rank.

Also read: On-demand Healthcare Business

The introduction and high penetration of smartphones resulted in greater proportion of population using them for exploring over search engines. Both Google and Safari are more likely to keep those companies on top whose SEO ensures mobile-first approach.

On-demand Business Branding

If you succeed in creating an impressive and distinctive brand, you are more likely to attain market share faster than competitors. Many startups fail to attract customers despite offering decent services for their insufficient marketing strategy.

There are multiple factors affecting on-demand business branding. The efficiency of brand to reach customers and sustaining it is crucial. Your mobile app and website should be fast enough to meet the standards defined by operating systems.

Customers are more likely to remember your brand when it has a unique name and color schemes for website and app. The colors you choose would become the representation of startup in the long run. This selection should consider all factors which affect user experience over the apps.

Promos and Referral Discounts

Successful on-demand startups target the less privileged classes by offering promotional discounts. These subsidies are not intended to attain profit but to increase the consumer-base.

Investors would fund your startup irrespective of the fact that you pay subsidies. The reason is their aim to make your startup sustainable in the long run. Uber presents an instance. The company did not attain profits in its entire lifetime of operations. However, it remains as one of the highest funded startups due to its ability to eliminate costs and become profitable in process. This is why on-demand economy is deemed as sustainable.

Promo codes intend to provide customers with a discount for a limited period while referral codes aim at increasing the user-base. Thus, both campaigns ensure to return highly at a later time.

Invitation for Partnerships

The credentials of great leaders reflect in their ability to turn rivalries into mutually beneficial partnerships. Turning a competitor into corporate partner would not only enable you to care about lesser number of competitors but also increase the probability of success.

“Since most corporate competitors have the same problem with sustainability and social reputation, it is worth trying to solve them together.” (Simon Mainwaring)

Although there are specific interests for each business where collaborations are not practical, yet they can resolve the common problems mutually.

Moreover, the collaborations do not necessarily have to be with competitors. Two startups or established enterprises with mutually disparate on-demand service business model can assist each other. For instance, McDonald’s is offering country-wide delivery services through DoorDash. This collaboration is covering over 10,000 locations across the US.

The primary success factor of on-demand economy remains the underlying on-demand service platform. Nevertheless, marketing of such startups also holds significant role. ODTap is assisting on-demand business startups since 2015.

Over these years, our experts have developed a number of successful businesses by utilizing our platform. Contact us today with your on-demand business ideas so that our experts would help you in realizing them.