Test the Market for Cheap

Building a product based business is never easy and requires massive amounts of customer research. We know that most successful products solve a problem that everybody has but how can you know if your product really solves that problem? Business owners will often end up spending large sums of money to conduct market research, run focus groups, and get feedback on how their product functions relative to customer needs. I think there are some better options for solving these problems and think they are worth considering for the entrepreneur looking to launch a new product. Here I will outline several of the key ways to test the market before doing a full rollout of your product in order to save time and capital for your business.

Crowdsourcing

Everyone knows of platforms like Kickstarter and GoFundMe. These platforms specialize in helping you crowdsource funding for projects and initiatives that resonate with the general public. By creating a page for your new idea one one of these platforms you are able to gauge the level of interest people have in your idea while simultaneously raising funds to make that dream a reality.

These platforms do charge a nominal fee to enable the fundraising for these projects but it is, in my opinion, worth the cost to get the high value feedback from customers. When we are able to get feedback from customers who are using their cash to vote up a product we know with confidence that this product resonates with the community you are targeting.

One major downside of this is that many firms will scour these platforms looking for well funded ideas. If you are still quite far away from launching the specific product or design you run the risk of these competitors stealing your idea. While it isn’t everything to be first to market, it is certainly a huge advantage for entrepreneurs who can be first to market with their specific product in a given region. So use these platforms prudently, they are a powerful tool but they are also used by the competition so be careful how much detail you share on this platform.

Hand out Flyers

There is nothing wrong with taking it old school. Handing out flyers and posting them in local stores talking about your potential new product is an excellent way to get very localized information about how well your offering would be received.

For example, if you are wanting to open a haunted house you will likely only be attracting people from your local area (unless you have one awesome haunted house) so handing out flyers is a great way to tell if there is enough demand to justify the business. Having people call or email in to reserve a spot will not only give you an estimate of demand but also will give you a ready to go customer list when you do launch.

While this is excellent for products with regional or local demand it is not always an easy option for launches that may be nationwide, not to mention global. Additionally, this method can be relatively time intensive as handing out flyers and stapling them to local bulletin boards requires boots on the ground and extensive canvassing. Additionally, this is one of the more expensive (and potentially wasteful) methods because it requires large amounts of paper and printer ink.

Ecommerce Listing and Pre-Orders

The internet has made it incredibly easy to test the market with a pre-order launch on your website. By posting how your finished product will look on your website and allowing pre-orders you can boost awareness as well as revenues quickly. In addition to the benefits highlighted earlier the pre-order on your website allows you to start a nurture campaign with these customers so that when your product does launch they will become active advocates of the product.

The revenues from a pre-order are a quick way to raise the funding needed to finalize production as well as a way to build hype for your business overall. When talking with small business owners I often find they see a boost in sales of existing products as well when they launch a pre-order campaign.

Of course there are risks to this option as well. By offering pre-orders on your website you are telling new and existing customers that you will launch this product within a specific timeline. If something goes wrong, or there isn’t enough interest to justify the launch, you will need to carefully manage the customer experience as you cancel their orders. This can be especially tricky if you have spent the money they placed for the pre-order already as it could lead to a cash drain of your business at a time when you are needing to pivot.

Testing the market for your next big idea has never been easier. With the large suite of tools and platforms available today it is possible to build awareness and even fund the creation of your new product with customers eager to support you. All this testing though must be rooted in one simple fact. SImply put, your product must always be addressing a problem and customer need. By solving customer problems, even if they do not know they have that problem yet, you are sure to succeed in the long run with a proper launch strategy.