Market Research: How To Find Out If Your Product Idea Is A Winner

product idea

One of the biggest mistakes that you can make with a new product is developing it before finding out whether there’s a significant demand for it.  You may think your idea is great, but if there isn’t a large market of potential customers out there, your efforts (and whatever money you invest in your product’s development) will go to waste.

This certainly applies to “information products” as well. Before you spend the time to create an e-book or online course to sell through your website, you need to be sure that your topic will not only appeal to a large number of people–you also need to make sure these are people who are willing and able to spend money to learn this information.

Big corporations do something called “market research” before rolling out a new product, to see if people will fill their shopping carts with it—or if it is doomed to sit on the shelf and expire. But you don’t need to have a large budget in order to test the waters with your own idea. In fact, I’ve got four steps you can follow to determine how much potential it has in the marketplace — and best of all, they won’t cost you anything.

Market Research, Step One: Determine Your Market Entry Point

In the pre-internet days, conducting “market research” might result in you sitting there looking at the results of phone surveys and little survey cards that you sent to everyone in town.  Or you might have blown a dump truck full of cash on getting statistics from research firms. Back then, it was easy to spend yourself into a hole before you ever made a dime.

Obviously, you don’t want to do that. And you won’t need to. If you’re starting out, you’re probably going to handle the market testing yourself. So you’ve got to start by asking yourself a logical question: would someone search for my product on Google? Is there people out there who don’t know where to find something like what I am selling, so they take to their keyboard to try to find out?

It’s been said that sometimes, fights have nothing to do with skill. Often, I’ve seen it’s quite simply about who gets there first with the most. And how do you become the one getting there first?  You’ve got to be the person whose site pops up every time any search remotely related to your product gets typed into Google.

So, you’ve got to come up with a good range of search terms.  Don’t spend time trying to come up with more than ten.  If you can’t come up with any, you’re pretty much screwed and there’s no market for what you’re selling.  And that’s internationally.  But if you can come up with a few good ones right off the bat, chances are somebody is typing away the exact words you just came up with on Google right now.  Which means they are looking for something like what you are selling and there’s a market!

Don’t go extolling the virtues of your product saying that it will cure diseases and heal people like you’re one of those television preachers.  Instead, talk about how it assists.  You never hear a successful product say how it fixes every problem the person has.  Talk about how it helps.  Like if you’re selling productivity software, make the term something like “My product helps people keep track of their bills”.  Come up with a few ways that you could describe your product if you had to in the scenario that there was  sniper across the street aimed at your head.

Market Research, Step Two: Research Keyword Statistics

Now, you’ve come up with your list of potential things a customer will type into the search bar to look for your product or a product like yours.  What now?  Well, the best place to take the next step on your journey is using Google’s Keyword Tool to tell you everything that you would need to know about the market.  In addition to giving you all the hard numbers that you need to k now, it will also generate new keyword ideas for you to give you a little extra bump in case all you were really able to come up with was three or four of them.

So say you’re selling that productivity software we talked about earlier.  You can go into the Keyword Tool and find out exactly how many searches there have been for that particular product over varying time periods.  And you can take the keywords that you came up with and get somewhat of a ballpark idea of what your total potential market is going to be.

Everyone is going to have a different idea of what they think a decent market size is going to be.  I have a good friend that uses this particular method quite a bit when deciding the right course of action when developing a new product.  Being the intelligent guy that he is, he doesn’t want to waste time putting everything together and finding out that there’s only a market of say, two thousand people that might be interested in buying.  In reality, he’s actually looking for about ten or twenty times that amount.  Remember, the bigger the market the bigger the chance is somebody is going to buy.

Now, when your product is ready to be sent out into the world you might spend a couple hundred dollars on ads and once you’ve got those fine-tuned you might think about upping your advertising budget to get a larger share of the market.  If you do it right, a few sales a month depending on what you’re selling could cover your entire advertising budget.

Market Research, Step Three: Evaluate Buyer Potential

Alright people, we’ve gotten people to actually come to the site that’s going to show them what you want them to buy.  The question now is, how the heck do you find out that they are really going to buy or are just window shopping?  The first thing you have to ask yourself is do the people in your market actually need the product?  Like I said above, you could be selling the best damned meat tenderizer in the world.  If you’re marketing it to vegetarians you’re going to have to build a shack on the side of the road made of old meat tenderizer to sleep in once the bank takes your house from you.

So you’ve got to find out if the people visiting actually have any inking of buying what you are now showing them.  Microsoft has, among the millions of other products they have out in the world, a statistic that you can use to your great benefit called Online Commercial Intention.  Without getting too technical, it’s a probability rating that tells you the chances that a potential customer is actually intending to buy.

Going back again to that productivity software.  You’ve got your site set up; you’re poured money into your ad budget.  Hell, you might even have people visiting your site to look and see if there’s a possibility that they are going to need what you are selling.  Let’s say you’ve got a thousand people that have visited the site it will tell you the percentage of that thousand that are willing to separate money from wallet.

The higher the percentage, the better it works out for you.  Let’s say that each ad costs you a dollar and each dollar you spend on ads generates three sales.  Now, if you use OCI you could reasonably use that information to turn that dollar spent into four or five sales.  Anything to help you get your product making money.

Market Research, Step Four: Find Your Customers

With every product and service that’s out there, there is bound to be at least one forum blog or Facebook page just to name a few things that are talking about it nonstop.  Which means that right now, there is a group of people flocking to some online location, chattering on and giving their opinions about every variation of the product that you are considering putting out.

I mean quite literally everything.  If you look hard enough, there’s probably a message board that talks about barbershops.  I hope you’re not trying to start an online barbershop.  The logistics of that would be horrendous.

Anyway, the best way to test a market is to go out and actually ask people questions.  You can go through all of the percentages and keyword statistics that you want.  That just tells you what people are looking for, it doesn’t tell you one thing about what they want or need.

So you need to go to these message boards and Facebooks and start asking questions.  Don’t go in with a sales pitch already talking about your product.  Especially on message boards, they have pretty strict rules about what they call shilling and will ride your ass out of town on a rail.  Instead, go in and say that you’re in the process of developing something that the readers of the board would be interested in and you want to get their feedback.

Find out what they want in a particular product.  What do they need and what are their real problems?  It’s the same reason that they have focus groups when rolling out products in real life situations.  People no matter what product they are selling want to know exactly what the customer wants so they can give it to them.

Before you start actually putting together your product, make sure you’ve got a good idea at first.  Then take that idea and see what people would like out of that idea.

You know the idea I kept talking about throughout the article? The productivity software? It was created by a good friend of mine.  He had a great idea for a pad-based series of Microsoft Office style applications, so he and other people could finish that report the boss needs on the train while getting to work.  He had a list of things that people wanted out of software like that and it sold a few copies but nothing like the numbers he was expecting.

Then fate stepped in. He was showing a coworker a version of the app and they said, “Why doesn’t it allow you to print remotely to any printer”?  It was the simplest thing and nobody thought of it except for this one potential customer.  Well, he went home, changed the code in the application and allowed it to remotely print from any Wi-Fi enabled printer.  Give you an idea how much money he made on this after that one question he asked a customer.  I was at his house for Christmas dinner.  Biggest damn turkey I’ve ever seen in my life.

It’s all about finding out how might buy from you and what they want.  It doesn’t matter what it is, but if you give people something that they want, they will buy.

Rob Wiser

Rob Wiser

Co-Founder at Art Of IM
Rob Wiser is the co-founder of Art Of IM, which is dedicated to helping internet marketers break through to new levels of success online. On this site, Rob and his partner Jackson Lin reveal many of the strategies they personally use to grow their online businesses.
Rob Wiser

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