Taking a time to reflect on your work has many benefits.
That is why I’ve decided to document my first growth project and share it in the form of a marketing study.
Before Pokemon Go had been released in Canada, many small businesses were already capitalizing on the local opportunity in the U.S.
My biz partner Mark and I decided to see if local businesses in our community were interested in a managed Pokemon Go service. We also wanted to test to see if marketers and growth hackers are looking for an authoritative source in marketing to Pokemon Go players.
In this marketing study, we have two ideas to test:
- Find Marketers who are looking for an authoritative source to market to Pokemon Go players
- Work with local businesses that will pay money for a “luring” service
We decided we would start testing idea #1 with a landing page. Idea #2 was better suited for cold calls and emailing.
We also decided that this venture needed to make at least 1,000$/month for it to make sense for us.
Marketing Study Growth Test #1
Mark and I were excited to put together a landing page and launch it to Growth Hackers. We figured this is buzzing right now, we’ll be able to score a few 100 signups.
We did some research. Shops were seeing increases in sales by adding lure modules to the nearest pokestop around their business. We decided to put together a PDF guide on how to add a lure module to your business and create it a landing page that required an email opt-in to get the guide.
Here is the screen shot of our landing page:
We waited until the next morning to post it. Additionally, we posted it to GrowthHackers and got a few friends to upvote to give it some initial traction.
Here’s what it looked like:
We waited 14 days before concluding the results.
We got 6 upvotes from our friends which got us in the trending section.
However, the results were disappointing:
We got 0 organic upvotes.
257 views and 4 email opt-ins.
That’s about a 1.56% conversion rate.
This test was, unfortunately, a fail.
We believed this experiment failed for many reasons.
- There are other more authoritative websites covering Pokemon go marketing already.
- There are other sites where you can get this guide without entering your email address.
- People were unsure or don’t believe Pokemon Go is worth investing their time into.
In hindsight, it may seem obvious this wasn’t going to work. In the moment it felt better to test.
Marketing Study Growth Test #2
Once the landing page was out we started working on our email marketing campaign.
We decided to go after pizza shops and coffee shops. Why?
Because they were the businesses getting the most attention in the media and local press.
I wrote a script that scraped Facebook search results for leads. I got 113 Ottawa coffee shops with emails and about the same for pizza shops.
Here is the email we sent to local businesses.
Mark wrote the email and in the text, we included a link to our website. We finished scraping and writing up the email on Saturday. Shortly after, we scheduled the email blast for first thing Monday morning.
The timing was perfect because our emails went out a day after Pokemon Go was officially released in Canada.
We got 11 replies wanting to schedule a meeting. We were pumped and felt like we had market validation. Every time I got a new email back we had a big grin on our face.
We scheduled our first meetings starting on Wednesday morning, only was only two days away. Things were moving fast.
I knew I didn’t want to go into these meetings pitching. Rather, I wanted to approach it as a customer development meeting. But, I also needed to have answers to questions our potential customers may have. We took to the whiteboard again and put together an offering.
We took to the whiteboard again and put together an offering.
For 60$/month, businesses would get:
- Advertisement on our Pokemon groups
- Guides/installation support
- Reporting and insights
- One 4 hour event
We came out with this number with a mix of cost calculations and revenue projections. It would take 20 customers to make 1200$/month. Not a lot of money but it was a number that motivated us for a side project.
Note, we never pitched this offering in the meeting. Instead, it provided Mark and I a base point we were comfortable with. This allowed us to ask the right questions and feel out if this was going to be a viable business.
Over the course of the next week, we conducted one in-person meeting and the rest were over the phone.
This is what we found out:
- All the shops were either going to or already putting Pokemon lures themselves
- They were all interested in getting insights and reporting
- They were interested in helping us out
But with every meeting, something became clearer. It was going to be hard to make money with this business.
The local businesses that would profit from a Pokemon Go presence had a young staff. They were already running or preparing to run Pokemon lure modules.
Our leads were interested in getting insights. But, they weren’t ready to pay for insights. If they did, it was going to be a large amount of money.
They were interested in advertising opportunity if we had clear numbers to show them an expected return.
We ran some numbers from the business point of view.
If we brought them 40 customer purchases per month at 3$ average sale amount, that gives them:
40 * 3$ = 120$
I looked around online to find coffee shop profit margins. This quora question had the best result with 33% profit margin.
Calculating their profit:
120$ * 33% = 40$
Let’s say we would charge them 25% of that. That is 10$ a month for our service.
For this venture to make enough revenue for us we need to scale to at least 100 customers. Which means we’d had to be responsible for 4,000 customer purchases a month.
Our Facebook Group only had 400+ members and the top Facebook group in Ottawa only had 2,000 members at this time.
We looked at increasing monthly fee to 20$, requiring us to scale to at least 50 customers. We would have to be responsible for 2,000 customer purchases a month. Even with the combined reach of the existing Facebook, Slack and Discord communities, this wouldn’t work.
We deemed our Pokemon Go business not viable.
The profits were too low for our interest. Additionally, this business is at the mercy of the popularity of Pokemon Go. Mark and I are not confident enough that it’s here to stay. Especially here in Ottawa where the winter takes 5-7 months from a year.