Building Successful Delivery Businesses – How to Choose Your Customer Niche?

You’ve heard the stat: 80% of businesses fail in the first five years. We often think this is because it’s “tough to start a business.” While this is true, this is NOT the explanation. The reason people fail is that they fail to plan, and therefore, they plan to fail.

You don’t want to do that, do you? You want to be successful. This article is part of a series to help prospective delivery business owners to build successful delivery businesses. This article will focus on the customer niche aspect. This single task is seemingly small yet drastically significant. Read on to learn more!

The Growth of the Delivery

Growth of Delivery Businesses

There has recently been a massive rise in the delivery service business in recent years. We know this to be true when we think of how we interface with our surroundings: the food and restaurant sector, the rise of mobile phones, mobile applications, the app ecosystem, and the mighty food delivery app. According to NRN, digital ordering and delivery have grown 300% faster than dine-in traffic since 2014.

This trend is true of other sectors; we know that customers have started to do orders and deliveries directly to their house for many services. We know the many industries’ requirements, from retail to clothing to equipment, home health care services, and grocery delivery service. The small business now has a variety of options in terms of a mobile customer base. These changing preferences for potential customers have been evident in groceries as well as every item.

The trend, of course, was accelerated with the advent of Covid-19. It seems now that every business requires to service its customers through deliveries or a mobile service option for ease and convenience. Customers have new requirements now for deliveries and services. They need touchless assistance, and often an app is required to support these transactions.

It is a digital mobile app era, and it is a sanitary and safe delivery era. Every logistics delivery business is adapting to this new reality.

Plan quickly, deliver faster, delight customers and get home early.

Everyone deserves to have simple and easy route planning.

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How to Start or Improve Your Delivery Service?

The tricky part is finding out how to start or improve your delivery business or your delivery services. Some people want to launch a new delivery service business or errands business. There are existing businesses that need to adapt to the new reality and offer delivery services to sell their current products. You need to understand the details of the business model or the business structure. This article will focus on a new small business that wants to create a new delivery business or courier service. However, many of the steps below are also helpful for existing business owners who wish to ease their delivery services.

Below is a summary of the number of steps required to start a delivery service business:

Important Steps to Start a Delivery Service Business

  • Research: The first step is to know your field. Whether it’s grocery delivery business, courier services, food delivery business, or deliveries of other items, the first step is to know who in this field is taking orders, what their business plan is, how they meet demand, and everything about their business operations (equipment or vehicle, team, staff, pricing, etc.). This step includes Customer Discovery as well as the competitive analysis. This will give you an idea about the customer expectations from the delivery industry.
  • Business Planning: The second step is really to plan your new delivery business endeavor. Whether you are a service business, using an app, or doing direct to customers, it would help if you had a business plan with the financing options and other details figured out. You’ll also want to outline your startup costs and a list of other essential items in this, like office space.
  • Admin and Legal: You’ll also want to do several administrative and legal requirements. Such as getting business insurance, a business bank account, a credit card, and so on.
  • Marketing and Sales: Now, you’re ready to get out there! Create your delivery business name, creating your branding, social media platforms, and business website, get some business cards, email address, start talking to customers (to turn them into repeat customers!).
  • Operations: Identify the “app stack” you will need; note: an app stack is each type of app for a specific feature. For instance, you’ll want to get a route planning app to plan your deliveries and manage your delivery fleet. The route planning app will help you take out the guesswork from the delivery schedule.

For more information, please check out
Checklist to Start a Courier Business: 32 Best Steps on Getting Started

Types of Delivery Service Businesses

There are many types of delivery service businesses out there. The variety of home delivery companies are essentially as varied as there are categories of items, products, and services out in our society. For this article, we are going to list seven of them here for you:

Types of Delivery Service Business

  1. Food and Meals: When we think of delivery, we often think of food and meals. This delivery business in and of itself, so much so that it has spawned many substantial companies that focus exclusively on this niche. There are giant software and app companies that focus on this. We can quickly think of Uber Eats, GrubHub, DoorDash and many more. We’ve covered this variety of applications in this article destined for restaurants. While one can use one of these applications, there are many other local alternatives. A prospective business owner can decide to launch such a delivery business on a local level. Other examples can be to deliver food in bulk or pre-prepared meals. We have several clients that are in these industries.
  2. Clothing and Retail: Someone who wants to do deliveries can partner with any clothing or retail company. We know that many of our clients have created small businesses to help shipping products from clothing and retailers. One example we have is two retailers that work with a small company. They have 100 stops to deliver a day, and they have two drivers and two vehicles. Clothes reach customers in less than two days.
  3. Alcohol: While it is illegal in certain countries and areas of the world, alcohol is a big business where it is permitted. In many instances, it is illegal to ship it as well. There are exceptions. For example, one can deliver to restaurants and other establishments. And there are places where delivery of a single bottle by liquor stores is permitted. This is something to verify in your city or country.
  4. Flowers: Who doesn’t like flowers? Flowers are beautiful, colorful, inspiring, and brighten anyone’s day. Flowers are short-lived (which adds to their charm)! So people want them delivered promptly! They are constantly being given the whole year, with course spikes during certain occasions (Valentine’s Day, Mother’s day, etc.)
  5. Pharmaceutical: For many people, they are not well enough to leave their homes. These same people often need to get medication delivered to them at their domicile. This vital service is found in most parts of the world and is an essential service.
  6. Couriers: There are all courier services, from huge companies like UPS to the local and very small. As we’ve mentioned in this article, there are many ways for the “David” to Compete against the goliaths. It’s about finding a niche that is underserved in your market or area.
  7. Documents, essential items pickup: The last niche we will talk about is the business of delivering important items, packages, and documents. Couriers often offer these services. However, it’s important to note that there are special considerations here, for instance, confidentiality, promptness, and reliability.

Other popular businesses are laundry delivery business, HVAC repair business, furniture delivery, and lawn maintenance business. A delivery business needs to choose who its target customer is (or customer niche). This is what we’ll cover in the next section.

How to Choose your Customer Niche?

There are several steps to choosing your niche. We’ve broken it down step-by-step.

How to Choose Your Customer Niche

Step 1 – Do your market research.

The first step is to do your market research; this is the basis of any business. What does this entail? This is about being curious and exploring all the service offerings in your area, the kind of companies that already exist, and try to get a good idea of the delivery industry. Discuss delivery business ideas with people from the industry. This part requires lots of googling, research, interviews. The ideal is to write everything down in a document for analysis (see step 2). This step includes what is typically called competitive analysis.

For more information,
How to Start a Delivery Service – How to Do a Competitive Analysis?

Step 2 – Identify problems or gaps in the marketplace.

Once you’ve done extensive market research, you can start identifying some of the common problems people have and the service gaps. This is more of an analysis step in your delivery business ideas.

For this step, it is recommended that you start to pick out some common themes or gaps. Ideally, you can make a separate document flowing from your available market research or competitive analysis document from step 1.

Step 3 – Create Different Customer Avatars

From here, a good next step is to create a customer avatar. In short, the customer avatar is a “guess” or a “hypothesis” of what your customer would like. It includes information like:

  • Name
  • Age
  • Occupation
  • Salary
  • Likes
  • Dislikes
  • Wants / Desires
  • Problems
  • and much more

Many websites explain how to create a customer avatar so that we won’t go into detail here. Here is a link for Digital Marketer on how to make a customer avatar.

Step 4 – Talk to Potential Customers

We’ve covered some of this in our customer discovery article. In short, the purpose here is to get out of your head, away from the theoretical, and get to the tangible/real life. In this phase, you’ll talk to people and challenge your avatar’s assumptions, and you will see if they are true.

The purpose of this phase is to get to the truth. Again you want to be curious!

Step 5 – Update Your Customer Avatars

As you talk to people, you’ll inevitably be wrong about many assumptions. That’s great! You’re learning and growing. So now, update your customer avatars, and keep talking as you know more!

Step 6 – Choose Your Customer Niche

Finally, after you’ve had enough conversations, you’ll come to the point where you know where you should focus your energy! Congratulations! You’ve found your customer niche! Also, congratulations because you’ve drastically improved your chances of succeeding in business!


FAQs

A delivery business can undoubtedly be profitable. There is a lot of needs for a delivery service business in most industries in most countries. Like any business, it requires entrepreneurs to research, know the demand, plan accordingly, find customers, and serve them well. These are all elements that the entrepreneur needs to take into account.

There are many types of delivery services in the delivery industry. Business owners can do grocery delivery business, online order delivery, courier service, and logistics, food delivery service, be a delivery partner, and much more.


Conclusion

The bottom line is starting a business is not easy. However, there are things in your control. Controlling these variables is crucial. Similarly, acknowledging the variables that are not in your possession is also vital. In short, what we want to see for you is the increased likelihood of success and decreased chance of failure and despair. We hope this series of articles will beneficial to you in this regard. As always, let us know if we can help you with anything, and until then, happy route planning!