Dundee Advisors, a spin off of Dundee Venture Capital, is a new business concept with the purpose of helping e-commerce companies grow through a partnership model. The founder, a very successful e-commerce entrepreneur, was unsure if there was demand for the Dundee Advisors proposed service and partnership model, and was reluctant to pursue the opportunity without further vetting the concept.
My former employer was hired to conduct market research with the target market to validate the business concept for Dundee Advisors. The goals of the research study were:
1. Identify demand levels for Dundee Advisors’ services
2. Identify how potential customers solve the revenue growth problem today and how they think about outsourcing the work and pricing
3. Identify target market pain points so Dundee Advisors can craft its offering and communicate benefits so clients immediately see the value in Dundee Advisors’ innovative approach
After the kickoff meeting with the Dundee Advisors team, KOVUS was able to infer that the target customer was a CEO of an e-commerce business with $2-20 million revenue and seeking growth. Recruiting CEO’s for 60 minute research interviews was difficult, especially considering the project started in December, a busy season for a vast majority of e-commerce executives. We contacted 86 different CEO’s to get 12 research interviews, using a variety of methods like email hacking, cold calling, LinkedIn, drop-ins, etc.
CEO’s were reluctant to entertain the idea of hiring what they perceived to be just another traditional marketing and/or SEO company. Typically, they had not experienced good results from working with traditional firms. CEO’s overwhelmingly mentioned the idea of having a true partnership, a “skin in the game” approach to working together. Whether that was through pricing options, contractual agreements or other ways, it was clear that Dundee Advisors would needed to position themselves as a non-traditional marketing company that could help companies grow and share in the success.
A target strategy session was facilitated with key stakeholders to identify the the hypothesized target market and pain points that Dundee Advisors service would address.
Based on the research objectives, KOVUS drafted 30 questions in addition to testing generated problem statements. The following are examples of open-ended questions that were developed to identify marketing pain points for the target audience:
– Of all the issues that affect the success of your business, what would you say are some of the biggest areas you are focusing on right now?
– Specific to your company’s marketing and marketing strategy, what do you think are some of your biggest frustrations or areas that are challenging as a company?
– How satisfied or dissatisfied are you with your marketing firm? What are you happy about and what do you wish they did better?
After the open-ended questions, participants were read each problem statement and asked if they felt like it applied, somewhat applied, or didn’t apply to their business.
Results from the 12 interviews were transcribed and analyzed to address each research objective. There was significant consistency in the pain points interviewees expressed proactively and the problem statements that resonated with the vast majority of participants.
Based on the research, there was strong evidence that demand for Dundee Advisors’ services exists. Additionally, one research participant was so interested in the offering he requested to be connected with the founders of the company.
The target market was further refined. Originally it was hypothesized that companies with stagnant revenue growth would be an ideal target; however, the research revealed there was more interest from companies that were already experiencing good levels of growth that had aggressive goals for future growth. In addition, we recommended focusing specifically on the e-commerce space and excluding software as a service (SaaS) businesses since interviewees perceived these to be very different and wanted a company that specialized in their industry.
Four different pricing models were tested to validate whether Dundee Advisors hypothesized pricing model would appeal to potential clients. Overwhelmingly, the majority of participants preferred a small monthly fee combined with paying a percentage of increased revenue. The percentage of revenue was tested in later interviews to give clear direction to Dundee Advisors on what revenue percentage potential clients were comfortable with. The “skin in the game” and “strategic implementation” concepts were widely repeated in the research interviews, and it was clear that those ideas would be key selling points for Dundee Advisors offering.
Our research gave Dundee Advisors a data-driven strategy to developing the content and messaging that would resonate with their target customers.