If you’re starting a courier service, the most important question you will need to ask is – “What companies or individuals will find value in my courier service?”
The tempting answer can be to say “everyone”. But if you target everyone, you will satisfy no one.
Understanding who you are targeting and more importantly who you are not, will not only help you settle on the right marketing strategy and craft the right marketing messages, but it will also help you tailor your core product or your core service to the precise needs of your target audience.
In this article, we’ll discuss who constitutes the target market for courier services and try and understand how businesses and consumers decide which courier service to select.
We hope this will help you as you build your own courier service business.
So read on!
Who needs Courier Services?
Many consumers and most businesses need courier services at some point in time.
But when people use a courier service they are specifically choosing to not use the postal service. This fact is important because it helps us define some of the scenarios in which people choose a courier service.
Here are some examples of the target market for courier services:
- Businesses which need to send or receive important documents or packages quickly.
- Individuals who need to send or receive time sensitive items.
- People who live in rural areas and don’t have easy access to traditional mail delivery.
- People who need to transport large or heavy items.
- People who need a secure, professional delivery service.
- People who need to send or receive items internationally.
- People who are unable to transport items themselves due to illness, disability, etc.
As you can see, there are many reasons why people need courier services.
But from a marketing standpoint, the more important question is – how do they select a courier service? And what factors do they take into account?
That’s next.
Understanding the Target Market for Courier Services: How do they choose?
To understand the target market for courier services let’s segment the market based on the motivations behind selecting a courier service.
Here are the top motivations:
- Speed
- Reliability
- Cost
- Customer Service
- Safety
- Reach
- Timeliness
- Convenience, Location, Pick-up
- Storage Capacity
1. Speed
Speed is an important factor if customers need to send a document or a package that needs to reach its destination as quickly as possible.
But speed costs money because the fastest means of transportation are usually the most expensive. And the further the package needs to travel the more expensive it becomes.
The Courier Service Target Market Segment that cares about speed usually includes:
- Businesses which need to send documents and packages as quickly as possible.
- Individuals who want to send a package urgently or receive a package urgently (eg. something they ordered online on Amazon for overnight delivery)
By segmenting the market based on price, and using ‘Speed’ as a way to charge premium prices, you can grow your revenue faster and distinguish yourself from “slower” competitors.
2. Reliability
If a customer sends a package to someone, they naturally need to feel confident that it will get to its destination. If a courier service has a record of lost packages, it is unlikely to attract many new customers. For this reason, it is important for a courier company to be reliable and trustworthy so that customers feel comfortable using them to send their valuable packages.
In the courier business, reliability simply means getting the package to the destination as promised. If you promise 48-hour delivery then your customer will expect their package to be delivered in a maximum of 48 hours. If you say delivery will take 7 days then be sure it is delivered in 7 days. That’s reliability.
And of course, reliability also means that the package is delivered in good condition. No one will consider your courier service to be reliable if you deliver a package on schedule but with the contents damaged.
If a consumer is sending something valuable, they will put a premium on reliability. This makes Reliability a sought-after benefit. Using such benefits to segment the market, you could introduce high-end products or services that specifically target those looking for these benefits. Such highly targeted services are usually more profitable.
3. Cost
If a competitor courier service is offering a lower price than you for the same speed and reliability of delivery, you are likely to lose customers to this competitor.
To a large extent, a courier service can become a commodity. The idea is to get a package from one location to another in a fast and reliable manner. Once these conditions are met, customers tend to lean towards the cheapest option.
Of course, there are ways to justify being more expensive by offering extra services like 24-hour pick-up or excellent customer service. We will discuss these next but there is no question that Cost plays a major role in the customer’s decision-making process as they select a courier service to use.
4. Customer Service
Unfortunately, from time to time packages get misplaced or lost. When that happens it is the job of your customer service department to handle the customer and make sure that their package is found with the least amount of heartburn for the customer.
This is a sensitive job because it’s very likely that the customer is irate. There is a great risk of not just losing this customer but also of getting bad publicity, often on social media.
You will need to make sure that your customer service personnel are well trained to understand what makes customers angry at suppliers and how to handle such situations when they arise – which they inevitably do.
5. Safety
Sometimes a customer might be looking for a courier service that can transport dangerous products. For example, a courier service could be transporting hazardous products such as flammable materials or chemicals.
If you are offering such a service, make sure you have the right permits, safety equipment, and procedures as well as insurance in place so that they can transport these types of items safely without causing harm to anyone.
Customers will ask for your track record transporting such goods and for references from other customers. Be prepared.
6. Reach
Some customers will need to send packages across town. Others will need to send them to the other end of the world.
Your reach as a courier service is important when determining which customers you can serve. Where you deliver and where you don’t is a simple way of segmenting the target market for courier services, so that you do not lose time or money attracting customers whom you cannot serve.
7. Timeliness
The first point in this list was ‘Speed’. Speed only tells us how fast a package can be delivered. But timeliness measures whether it is delivered on time. This is because sometimes (maybe always?) it is better to be slow but on time rather than be fast but late.
Timeliness is also a form of reliability. When a courier service always delivers on time it will be considered to be reliable.
And many customers will gladly pay more for a courier service that is reliable enough to always deliver on time as promised.
8. Convenience, Location & Pick-up
Packages have to be picked up and dropped off. If a customer needs to do this once in a while, they may be willing to go out of their way or drive some distance to get to a specific courier service that they really want for the benefits it offers – maybe a lower price or a faster delivery.
But customers who need to do this often will definitely consider convenience and access to drop-off locations as factors while selecting a courier service. This is why a courier service with plenty of easy-to-reach drop-off locations will have a leg up over another service that is less convenient to get to.
Similarly, customers greatly appreciate courier services which can pick up packages from the customer’s location. They are often willing to pay a premium for pick-up services because of the immense time that they can save.
9. Storage Capacity
Commercial customers that use courier services may require the courier to have storage capacity at their location.
For instance, let’s say a factory needs to ship 100 units of a product to a customer. It can manufacture 20 units per day but it can only store about 40 units in its own warehouse.
So before it can have all 100 units manufactured it would need to store these somewhere. The important word here is “need“. If a courier service has temporary storage facilities, it can offer these to the customer and satisfy an important need.
So it isn’t uncommon for commercial customers to gauge the capability of a courier service by also gauging its storage capacity. If a normal courier service is unable to provide large-scale transportation of goods, the customer could turn to a full-fledged shipping company instead.
Now the courier company could segment the market based on need, or rather the specific need for storage capacity, and target customers who have this need.
Summary
The target market for courier services includes both individual consumers as well as businesses. Any courier service must know precisely who is their ideal customer and how this customer selects a courier service.
Customers who select a courier service are making a deliberate choice to not use the postal service. This insight alone can help a courier company create offerings to meet the customer’s needs.
Customers primarily choose a courier service based on Speed, Reliability and Timeliness. Next comes Cost and Customer Service. This is followed by Safety, Reach and Convenience. And finally, some commercial customers may also look at a courier company’s Storage Capacity before deciding whether to use them as their courier.
