This question came from Ray, a student in my Entrepreneurship 101: How To Start A Business You Love Now course. Thanks for the question Ray! “Establishing validity of business concept?” This will give you a thought process and a simple strategy to test market your product or service idea.
Like I say in the course, you can over think and over analyze whether you should launch or not. Take quick action and test your product idea in a short amount of time! This will train your brain to take action and help you get closer to launching your new business! Now here are the 6 quick steps to test market your new product or service:
- Is it a brand new product or service or is there established demand for it?
- If no established demand, can you pre-sell the product/service before launching to test actual demand? You can survey potential customers all you want, but until they actually have to put down cash to purchase it, you won’t know the real demand. Decide how much you are willing to spend on test marketing.
- Who is your market? Are your potential customers local (within a fixed geographic area) or online (one particular country or worldwide) or both? Choose the size of your initial test market and length of time you will test it.
- Can you deliver/produce your product/service to this market and charge enough to make your target profit? If you are not able to pre-sell your product/service, then produce/purchase enough of it for your test. Some countries have laws against charging for a product that isn’t available for delivery immediately, so check your local laws.
- Establish your test marketing: website, Youtube videos, Google Adwords (or Facebook & Twitter ads as well), marketing materials, advertising, trade show booth, B2B, door to door, mall demonstrations, etc. to test the initial sales of product/service. Tip: Pick your top 2 or 3 marketing ideas for the test. Otherwise the more you marketing channels you implement, the more time it will take as well as adding to the cost of your test market.
- Launch market test! Are the results good? Then launch business (Or re-test of you want to make sure!). Results didn’t meet target? Then what can you adjust? Price, market, options, packaging (what were the initial customers feedback about your product/service) then re-test or scrap concept and choose another idea to test.
What strategies would you add to test market your product or service ideas? Please share them in the comments below.
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