Sunday, June 27, 2010

A Cure For Which There's No Known Disease

In one of my group mentoring sessions, we were looking at evaluating new products and services in order to make them more successful.

Broadly, the success of any new product or service depends on three things:

  1. Who will buy it - i.e. the market.
  2. What you are selling - i.e. the product (or service) itself.
  3. How you will sell it - i.e. the marketing.

Most of the people in the group scored well on product and marketing, but their weakest area was their understanding of the market.

This is common!

Many business owners fall in love with their products and services, and forget their market. They create a beautiful, sophisticated, high-quality product; but forget about whether there's a market for it. They create a cure for which there's no known disease!

This is doubly true of many differencemakers - and it's not surprising to see why. After all, if you're passionate about a cause, it's easy to get so caught up in it that you forget other people who don't (yet!) share that passion.

I'm not saying this is true of everybody, nor even for the clients in my group mentoring. But it is a common trap.

You don't have to obsess about your market and be totally market-driven. After all, by definition, a differencemaker offers something new.

But it's also easy to over-estimate your knowledge of your market. If you think you know what they want, you could spend a lot of time, money and energy on the wrong strategy.

Here's a quick quiz to help you ...

Here's a quick quiz to help you evaluate your understanding of your market. It's easy - just answer (a), (b) or (c) for each of these five questions.

(Note, by the way, that I'm using the word "product" to refer to any new offering - whether it's an actual product, a service, an awareness campaign, or whatever)

  1. Niche:
    a. I am aiming this product at a small, clearly defined niche market.
    b. I am aiming this product at a mass market.
    c. I'm not sure of the target market for this product.

  1. Problems:
    a. I have surveyed a broad cross-section of my market to find out their specific problems.
    b. I have done a few informal surveys of my market to find out their specific problems.
    c. I haven't asked my target market for their specific problems.

  1. Demand:
    a. I have done significant research to measure the demand for this product.
    b. I have done a bit of research to measure the demand for this product.
    c. I don't yet know whether there's a demand for this product.

  1. Price:
    a. I have tested various price points to learn what my target market will pay for this product.
    b. I have some indicator of a good price point, based on competitive products and services.
    c. I don't know what people will be willing to pay for this product.

  1. Trust:
    a. The majority of my customers will be people who have bought related products from me already.
    b. The majority of my customers will be people who know about me, though they haven't bought from me yet.
    c. The majority of my customers will be people who have never heard of me before.

Now score 2 points for each (a), 1 point for each (b) and 0 for each (c).

How did you go?

If you have a high score, that's a good sign. It means you've probably got a fairly good understanding of your market, which means you're more likely to succeed.

On the other hand, if you have a low score, it might mean that you may have to rethink this before you start investing time, money, and energy into launching this new product. At least, think more carefully about your market!

Try the full questionnaire ...

If you found this useful, you can try the full 16-question questionnaire - at no charge. It covers all three areas: market, product and marketing.

Do the questionnaire here.

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