Does a viable audience of consumers actually need your product enough to spend money on it? Here’s how to find out before you invest in a product you can’t sell.
You’ve had an ah-ha moment. An idea for a new, innovative product that will take the market by storm. Your early retirement plans are looking good…
Not so fast. Just because you have a product idea doesn’t mean you have something people need, or moreover that they’ll spend their money on.
Before you jump into full-fledged production and marketing, you’ll want to do some research to get – at the very least – a sense that people have a need for your offer.
This is a critical part of developing a marketing strategy. Your product must solve an actual problem for a viable audience. Since you’re likely bootstrapping your business instead of accessing venture capital, the only way you’ll stay solvent is to make sales.
If you go forward just because you think it’s wonderful, you’ll likely end up another victim of the #1 reason businesses fail: lack of market need for the product.
And believe us, this is not uncommon. A lot of people dream of being their own boss, scheduling their day, controlling their destiny – and making a tidy living while doing so.
But the business model supports the lifestyle, not vice/versa. The trick to all this is your approach to creating value. Your ah-ha moment must transcend yourself. Ultimately, you can only be successful if you serve others.
Here are tips and techniques that will help you gather data on your idea and determine if there is a viable buying audience for your product.
#1. Take Some Time
An ah-ha moment is exciting. Suddenly, you feel you have an answer that will let you pursue your career dreams.
Our advice is to sit on this idea for a couple of weeks. Don’t do anything other than to let the concept germinate in your mind.
As you go about your daily life, think about your idea and the people you hope to help. Visualize how you’ll structure your business and market your product. Take note of the options people already have and the competition you’ll face.
After a couple of weeks, reassess. Do you still think the world has a burning need for your offer, or is this looking more like a pipe dream? Do you still feel confident and enthusiastic, or has doubt crept in?
If you still feel strongly about your idea, move forward. If not, take more time. Maybe you’ll come up with workable refinements, or maybe you scrap it.
If you have to scrap it at this point, it cost you nothing.
#2. Informal Research
The next step is to do some informal, anecdotal research by asking family, friends, and acquaintances what they think about your idea.
At this point, you’re just trying to find out if your idea has legs. Do people think it’s logical? Do they understand the value you offer and the problem you solve?
Ask people if they’d spend money on your product. Is it something they think you could deliver consistently? Would they become a repeat customer?
Keep in mind that your family and friends are likely to be the most supportive people you’ll research. So, if they raise objections, it’s a sign that you’ve got problems from the get-go.
Next, move on to asking people who fit into your target demographic. Attend local networking and MeetUp groups. Stay focused on the task of discovering if there is an active need for your offer.
#3. Competitive Research
As you’re conducting your informal personal research, also do competitive research. Search online and in your local area. You want to find any offers available that are similar to yours in any way.
As you research competition, consider a couple of things.
First, if there is a lot of competition, how fierce is it? Do you have a realistic chance of positioning yourself in the market, or are the established brands going to be all but impossible to eclipse?
Next, consider that competition is also a good sign because it indicates that the market need you’ve tapped into is viable.
Of course, if there is competition you must have a plan to compete. Now a major part of your strategy will be figuring out how you can differentiate your offer and distinguish your brand.
Without a competitive edge, you fall into the me too category of businesses that struggle to be profitable.
Pro Tip: Consult a Marketing Company
If you’re feeling confident at this point, a good step is to talk to a few marketing agencies and get their opinions. Most (including Marketing 360) will give you a free consultation. This will be especially helpful for getting data on what type of audience you can target as well as what channels you have the option to market through.
Continue to recognize signs that suggest your idea isn’t viable. A real consultation (that’s not just a sales pitch) will inform you about the challenges you’ll face.
Up to now, you’ve only invested time. But as you move from here, it will be time to set goals and organize a budget.
#4. Build a Prototype
If you’re creating a physical product, the next step to develop a prototype. If you’re providing a service, outline the details of what you’ll deliver.
With a prototype, you can asses your audience’s needs as they respond to an actual product. The reactions you get here are vital because using the product makes the solution visceral – you’ll get your first look at how actual customers respond.
Pro Tip: Crowdsourcing
With crowdsourcing services like Kickstarter, you can market your prototype to innovative buyers and obtain funding to get your business off the ground.
Create a Kickstarter campaign and start marketing your idea. You’ll be going further into testing the market viability of your product as well as making contacts with customers.
If you get funded it’s a huge step forward. If not, it’s a sign that your product idea isn’t tapping into the needs of a large enough audience.
#5. Refine Your Offer
By now you’ve gathered enough data on how people respond to your product to have a good feeling for its viability in the market. You understand what people like and don’t like and how you stack up against your competition.
Now is the time to use that data to refine your offer so it really clicks with the people you’re persuading.
Go back to that ah-ha moment and remember how you fell in love with your idea – then fall out of love with that memory.
Use the information you have to move forward with facts rather than hunches. You know what people really want, so give it to them.
Also, consider how people responded to your idea on an emotional level. Those feelings are the key to creating a value proposition they’ll respond to.
Likewise, identify your competition and develop brand messaging that clearly distinguishes your offer from theirs. Internet marketing is competitive just because of the sheer number of choices consumers have, so you must have a message that stands out and a brand that’s memorable.
#6. Start Web Marketing
If you’ve done all these steps, you’ve established yourself as legit – you have a chance to be successful.
With a product offer refined by the real needs of your customers and a unique value proposition, you have the foundations of a marketing strategy.
You can now start to create online collateral such as a website and social media channels. Use those platforms to test how a larger market responds to your offer.
Early on you’ll continue to adapt. You’re still testing your content, product, and audience targeting.
The response you get to your content is coming from a real, unvarnished audience. If the need you’re taking care of is real, you’ll know from these sales. Nobody in this audience will buy from you for any other reason.
As your business grows you’ll start to develop a brand people will associate with your solution. This is a powerful element that stays with people as they move through the buying cycle.
You’ll know you’ve hit the mark when you start getting referral sales. If your product solves a problem so well your customers gladly tell their friends about you, you’ll know that ah-ha moment was a moment of truth.