Testing your product or service is critical to your longterm business success. Many businesses jump right into product manufacture and distribution before they truly know if they have a viable product that the marketplace wants.
In the article “6 Ways to Get Fast Feedback” on 1000ventures.com, they give some great tips on getting started with market testing. Initially you will want to set some pricing parameters for your product. If it’s a physical product that you are manufacturing, you can just go off a certain percentage mark-up above cost. Industry analysis will help with this decision. If it’s an information product, the great thing is you can test different price points as well. Just be prepared to tell people a price when you approach them.
Once you have done some analysis of the market and have established some pricing parameters, start approaching would be buyers about the product and get their feedback. As the article above states, you can do this at trade shows, approach people you know who maybe interested and go to places where your target customer is going to be. Another great resource is to do surveys to get some initial feedback. I will caution that verbal feedback is one thing. People actually buying the product is another.
Your product or service starts with a great idea. “6 Ways to get Fast Feedback” shares the story of Ross Perot to illustrate this. Getting a customer to front manufacture costs can be a great strategy to get started. However, you must have high integrity to make this work. If you take someone’s money for a product/service, you better deliver the goods. Your reputation is critical in business and doing this wrong will kill it.
Last, take a look at the budget you have allotted to test. Many entrepreneurs try and skimp here to save some money. Unfortunately, handling this wrong up front is much more expensive than if you just went out and tested in the first place. Make sure you have a budget or resources available to do some market testing.
What avenues have been successful for you when testing an idea?
PS- Click on the link below to listen to my weekly podcast on this subject.