03: Creating Your Product
Market Research and Testing
Creating a delicious product isn’t enough to guarantee success. The goal is to create a product that resonates deeply with your customers, fitting seamlessly into their lives and meeting their needs and desires. This chapter will break down the process of consumer research and testing, helping you test your product or concept in the market effectively. We’ll cover methods for both conceptual stages and when you have a Minimum Viable Product (MVP) ready to share with the world.
Know Your Customers: The Key to Business Success
To create a product that your customers will love, you first need to understand who they are. Thorough customer research is essential to identify your target market and ensure your product meets their needs.
Identifying Your Target Market
The first step in conducting customer research is identifying your target market. Ask yourself:
- What benefits does your product offer?
- What problem does your product solve?
- What need are you fulfilling?
- How does your product differ from other similar products on the market?
Take Halo Top, for instance. The ice cream targeted consumers who have specific dietary concerns by offering low-sugar, vegan, and gluten-free options. By focusing on health-conscious consumers looking for indulgent treats, Halo Top became a popular choice among those who wanted to satisfy their sweet tooth without sacrificing their health goals.
To effectively target your audience, dig deeper into their demographics, psychographics, geographics, and behaviors. Segment your market into smaller groups based on shared characteristics, such as:
- Demographics: Age, sex, income, education, etc.
- Psychographics: Lifestyle, values, interests, etc.
- Geographics: Location, climate, culture, etc.
- Behavior: Usage patterns, loyalty status, etc.
For example, if you are selling a gluten-free granola bar, you may segment your market into young professionals who value health and convenience, busy moms who want to provide nutritious snacks for their kids, or fitness enthusiasts who need a quick energy boost before or after a workout.
But how do you learn the information above?
When I launched TeaSqaures I created a Snacking Survey to better understand people’s snacking habits and interest in our products. Ideally you’d like a representative sample of 200+ people to fill out your survey. Regardless, use the information directionally instead of as a certainty. Here’s the exact survey I created for TeaSquares and the results:
Gathering Information About Preferences and Needs
Once you’ve identified your target audience, gather information about their preferences and needs. Conduct market research to gain insights into:
- Popular types of products and flavors.
- Acceptable price points.
- Packaging and branding that resonate with your audience.
Use surveys, focus groups, and interviews to collect this data. Online tools like SurveyMonkey or Google Forms can help you reach a broader audience quickly and efficiently.
Understanding the Buying Journey
Understanding the buying journey of your potential customers is crucial. Identify the various touchpoints in their journey, such as:
- Where they first hear about your product.
- How they make purchasing decisions.
- How they use and consume your product.
Gather this information through surveys, online reviews, and social media monitoring. Tools like Google Analytics and social media insights can provide valuable data on how customers interact with your brand online.
Financial Considerations
- What are our financial expectations and constraints?
- How much are we each willing to invest initially?
- What are our expectations for salary and equity split?
- How do we plan to handle funding and finances?
- Are we on the same page about bootstrapping vs. seeking external funding?
- How will we manage financial risks and distributions?
Testing Your Concept
When your product is still just a concept, it’s essential to validate it before investing heavily in development. Here are some methods to test your concept:
Surveys and Polls: Use online surveys to gather feedback on your product idea. Ask potential customers about their interest, preferences, and willingness to purchase.
Focus Groups: Assemble small groups of your target audience to discuss your concept in detail. This can provide in-depth insights and uncover potential issues you hadn’t considered.
Landing Pages: Create a simple landing page that describes your product and invites visitors to sign up for more information. Measure the interest by tracking sign-ups and engagement.
Social Media Testing: Use social media platforms to gauge interest in your product idea. Post about your concept and monitor the reactions and feedback from your audience.
Testing Your MVP
Once you have an MVP, it’s time to test it in the market. Here are some effective methods:
Pilot Testing: Launch your product in a limited market or a small group of customers. This allows you to gather feedback and make necessary adjustments before a full-scale launch.
Farmers Markets: Set up a booth at local farmers markets to showcase your product. This allows for direct interaction with customers, immediate feedback, and building a local customer base.
Local Retailers: Work with local retailers to get your product on their shelves. This can provide valuable feedback and insights into how your product performs in a real retail environment.
Pop-Up Shops: Set up temporary retail locations to showcase your product and interact directly with customers. This can provide immediate feedback and help build buzz around your brand.
Sampling Programs: Distribute samples of your product to potential customers and collect feedback. This is particularly effective for food and beverage products where taste is a crucial factor.
Online Sales: Launch your product on a limited scale through online platforms like Amazon or your own e-commerce site. Track sales, reviews, and customer feedback to refine your product and marketing strategy.