Four Steps to Achieving Product/Market Fit
Many startups fail because of the dreaded product/market fit. Marc Andreesen claims that product/market fit is the most important factor in a startup’s success or failure. Great products and competitive prices will not help your company capture market share on their own. To build a solid customer base, gauge consumer desires and build your products to fulfill them by focusing on:
- Discerning Needs
It’s important to gauge the desires of your target market. You should read review sites and perform a competitive analysis, but the best insights come directly from consumers, or businesses, depending on whether you are B2C or B2B. Survey past customers to see what they liked and didn’t like and open your website to public reviews. Open surveys and review requests demonstrate transparency, honesty, and trust in your customers’ perceptions. If you don’t have customers, lean on your network or offer your product for free to those who take your survey.
Remember, many consumers look beyond functionality and price. There are many inputs into the value equation, including strong values, ease of use and design can improve the marketability of your brand and maybe capture a price premium. For example, TOMS “One For One” value proposition drives price premiums and fuels word of mouth marketing. The company that capitalized on the power of good design, Apple focused on slick design and usability to overtake the consumer electronics category.
- Beta Testing
Beta testing can be used to confirm that your product meets your target market’s need, as well as identify the most highly valued features of your product or service. After bugs found during internal (alpha) testing have been addressed, the company offers a select group of customers the opportunity to try the product out. These customers report their experiences to the company, allowing for further improvements before the product is released to general audiences.
Beyond finding bugs, beta testing is useful for getting customers to share their favorite product features, which may be different than the ones you expected. For example, a language learning software publisher may include a microphone to practice pronunciations as well as a feature that translates whole sentences from the target language. While the company expects consumers to focus on the pronunciation feature, it is prepared to update its messaging hierarchy if beta testers report that they valued the translation feature more than any other feature.
Lastly, beta testing can create a buzz — good and bad. This is why the product must go through extensive alpha testing prior to the beta testing phase.
- Solidifying Your UVPs
With a few changes in messaging and offerings, your company can become wildly more successful. Once you know what customers want, begin fine-tuning your messaging. Begin building your messaging hierarchy by mapping needs to features to benefits. Next, understand what your competition offers and describe how your business uniquely delivers these to develop your unique value propositions (UVP). Focus on using language that your customers will easily understand and avoid company-centric language.
Sometimes you will have to bundle more functionality and service levels into your baseline product. All the features that set you apart from the competition add to your value proposition, even if customers do not pay for them. If your business provides better customer service than the rest, make sure your marketing reflects these superior service levels. Customers may not pay for you to talk on the phone with them, but knowing that you’ll quickly and politely answer their phone requests may earn their loyalty and even encourage them to spread the word.
- Generating Demand
Demand generation begins with an effective messaging hierarchy and marketing mix that is focused on the target market. The optimal marketing mix will vary wildly by the target market and the available budget. If possible, test your way into every channel. Once you understand the proper mix based on your target and budget, you will be in a better position to create an integrated marketing plan that optimizes PR, social media, email, search and other forms of advertising.
The above steps are as much art as they are science. I recommend getting advice from people who have experience in achieving product/market fit to help guide you through the (at times frustrating) process. There are no shortcuts. The road is paved with unexpected learnings and well-executed pivots.
