Having a new product idea gets you excited. You want to sell it to the entire world because of how great an idea you think it is. But how do you know if your product idea is a winner?
Your product must have qualities that will help it gain traction and have the ability to stand out in your chosen market. Your idea is fresh, creative, and would add a lot of value to your industry.
Compare your product idea against these five qualities to see where you need to make adjustments and where your product idea is already thriving.
1. Your Product Solves Problems
Your product isn’t built to only being pleasing to the eye. Products like these may attract buyers at first, but the potential of maintaining a strong clientele is slim to none. Your product's goal should always be to solve the customer's problems in a creative and innovative way.
By not understanding your potential customers' issues, you may waste hundreds to thousands of dollars on development for a product that won’t even sell. Ask these questions to test the value of your product.
Are customers in need of this product?
What are the current ways customers are solving this problem?
How much time do they invest in trying to solve the problem themselves?
An effective way to test if your product will serve the customer’s needs is to hold interviews with potential customers. These will thoroughly help you assess their problems and whether they’re even worth solving. The issue needs to be nagging enough that the customer has put it high up on their priority list. Otherwise, they may not be interested, and you’ll need to test another product idea.
When conducting these interviews, make sure they are non-bias. Maybe your parents, for example, aren’t the best people to round up for this process. You need to hear how excellent your product is, but you also need to listen to any harsh truths.
So, let’s say your potential customer has a problem that your product can effectively solve. This is great news, but this isn’t where your interview stops. You need to continue to assess their needs.
If they currently use another method for a solution, what would it take for them to switch to yours? Are they willing to spend money on your product? The more thorough you are with your potential customer, the more you are securing your spot on their solutions list.
2. Your Product Can Sell
You can’t go off interviews alone to figure out if your product will sell. It’s great to know that potential buyers are interested, but without some form of data and analytics from testing, you’ll be blindly putting yourself on the market.
How can you find out of your product will sell? You can conduct test sells to eager potential customers. These customers have said they have a pressing issue, and your product is the best one they’ve ever heard of to fix it. By conducting test sells, you’ll be able to accurately determine if your target customer is appropriate if they have the budget to buy your product, and what the sales cycle of the item looks like.
The best part about this experiment is that you don’t even need to have a fully functional product. More times than not, early test sales are performed from slide decks or rough prototypes. Especially in the digital product realm. This will help you acquire data more quickly so you can launch your product faster.
3. Customer Acquisition Cost is Less Than Their Lifetime Value
Knowing your customer acquisition costs (CAC) are critical to determining whether you have a winning product on your hands or not. If the cost of acquiring customers is more than their lifetime value, then it probably isn’t your best product idea. Or you can try to find a way to lower the CAC with your current product.
Customer acquisition costs are an umbrella for the costs of all the marketing and advertising you’ll be doing for your product divided by the number of customers you’ve acquired. This includes the amount you’ll spend paying your marketers and salespeople.
Advertising and marketing are essentials steps to get your product off the ground and into your buyer’s hands. The cost should be thoroughly examined and calculated as accurately as possible. Advertising and marketing are not areas of your business that you can cut corners with.
4. Your Product Can Pivot
Often times, businesses will launch their original product, find out it has a lot of unresolved issues, and then try and fix them. This is backward and will cost you a lot of unnecessary costs.
Knowing that your original concept will dramatically change opens your mind to conducting interviews, experiments, and product reviews. This allows you to pivot your product early to avoid the costly mistake of launching too soon with a defective product.
If you determine that your product isn’t dynamic, then it is best to go back to the drawing board.
5. Your Product Can Launch Before It’s Perfect
Pitching a product that can pivot means launching a product that isn’t perfect. Remember, you want as much feedback as you can possibly get, so you don’t waste time improving something your potential buyers don't need. Or worse, not improving problems your potential customers do need.
By launching your product early with experimentation and research in mind, you can determine if you’re on the right track. You can try to think of every scenario possible, but if you never launch, you’ll never know if those scenarios are valid.
To find out If your product is a winner, you need to conduct experiments and perform thorough research. Really get into the minds of potential buyers and examine the data.
Solving a customer’s needs will be easy for you once you figure out from their own mouths what those problems are. And when you’re ready to launch, be flexible to adjust to any necessary changes that need to be made.