How I Test The Market Validity Of A Product

Published by 27 Comments

My name is Leevi Romanik and I used to be a health care professional. A few years ago I was fed up with the 9-5 grind, the rat race and being unhappy with my job, but I had no idea what to do about it. I was desperately seeking more freedom, flexibility and enjoyment from work.

With some lucky breaks I found myself in the world of Internet marketing and I have never looked back. Internet marketing has allowed me to have the lifestyle I always wanted, but I thought was only reserved for an exclusive few or the rich and famous.

I specialize in selling digital information products both as an author and as an affiliate. Through my writing on Entrepreneurs-Journey, I hope to share with you some of the insights I have learned from my own journey. I will cover topics ranging from the birth of an idea, to product creation, to marketing, promotion, establishing customer relationships, to finally selling, and the lifestyle associated with an online entrepreneur. Plus some of the mental aspects associated with being an entrepreneur.

This article will talk about the steps needed to test the market validity of a product to see if it is worthwhile to take the next step and create or promote it to potentially make money.

No Money Gets Made Until Something Gets Sold

That is the cold hard truth. We can talk about sipping Pina Coladas by the pool all day, how to outsource our whole life to the Philippines, the latest SEO strategy and next best WordPress plugin, but that is all useless if you do not even have the beginnings of a money making system. And don’t get me wrong, all those things have their place (especially sitting by the pool relaxing!), but all in good time.

Now back to the above statement – no money gets made until something gets sold, now this can refer to a product you have created, an affiliate product or even a service you sell or promote.

A Traditional Approach To Selling Something

A sad but often followed approach to business entails the setting up of a business as the main focus and priority. It may be a business in an area of interest you have or a product you created, either way the business owners are passionate about the idea and believe that other people will be too. After the initial set up phase and investment the business owners will move onto marketing and promoting the business. See anything wrong with this approach?

There was no market research! Is it any wonder that 8 out of 10 new businesses close down within three years. You may think you have the best product in the world, you may be so passionate about your area of business. Guess what? It doesn’t matter. If you do not have a market to speak to, you don’t have any potential customers. If you do have an audience to speak to and you have a unique story, then that is totally different and a potential recipe for success. Seth Godin spoke about this combination in his excellent book “All Marketers Are Liars”.

Now we know the big companies are vigorous with their market research and product development. Constantly surveying, testing and tweaking everything before they launch a new product. With the amount of money they are playing with, they have to be careful. But it doesn’t mean we can’t learn from their approach. And as an entrepreneur with little money or time to invest, it is paramount you do your market research before you venture into a project.

Market Research With The Internet

Great tools like Google Keywords Tool, Google Insights or Google Trends allow us a glimpse into what potential customers are looking for. You can see how many people are searching certain terms each month, if the trend is growing, which countries are searching the most etc.

If you think that purple stockings for left handed people could be a good niche market to enter into, then a few minutes on the Internet will give you an answer. Obviously market research like this should be taken with a grain of salt. You need to use some critical evaluation, and think if the keyword search could potentially result in a transaction or are people just looking for information. For example, the intent behind searching for roof tiles and buy roof tiles can be totally different.

How To Test The Waters (Validating A Market)

My first ebook started with an idea in a niche I had some background knowledge in. Before I even started writing the book, I verified that there was an audience with some keyword research.

Then I wanted to find out if the audience would buy an ebook on the topic. I had a rough idea of what would be in the book so I wrote a sales page for the book. I then paid for some pay per click (PPC) advertising to the sales page. When people clicked the buy button they were taken to a page to enter their email and once it was submitted they were told that unfortunately the servers were down and the book was not available. No payment information was collected, only their email.

After a week I had enough potential sales to justify spending more time and money on the project because I knew that it could sell. So I invested the time to write the book, paid someone to edit it and paid a copywriter for the sales page. It wasn’t a guess that I would make my money back, with the market research done, it was just a question of how quickly would I make it back. When the book was finished I sent an email to the previous people, who tried to buy the book, and apologized for the unavailability and offered them a discount on the book.

If the project failed during the PPC stage, all I would be out of pocket was the PPC costs and the time to write the sales copy. I would have saved myself not only the time and cost of the book and sales copy, but also potentially time and effort in building a proper website, promoting the website, writing articles and implementing SEO. Imagine that. Spending months building a website and writing articles for a dead end product. All that work can be done once you know there is potential for a worthwhile return.

How To Know What Your Audience Is Hungry For?

If you run a website, especially an information website that solves a problem, then you have the potential to survey your readers about their needs and wants. Send out a survey to your existing mailing list or put a survey on the thank you page of your email opt in asking people: If there were two things I could help you with right now, what would they be?

It can’t get anymore targeted then that. This is your audience telling you exactly what they want from you. Many a product idea is born from asking the audience exactly what they need or want. I often laugh at the amount of times I have heard a famous Internet marketer state that the idea behind their latest product was born from solving a problem that their existing customer base requested help with. This is as close to creating a winning product as you can get.

How easy would it be to sell this item? Your audience already visits your website or is on your mailing list, so they know and trust you and now you have delivered the exact product they asked for. That is a home run in product creation.

Yaro recently summed up a winning formula in a video interview. Yaro said something along the lines of marrying up your passion/interest with a need in the market was critical for being able to make money online. So true. A passion with no audience can only take you so far.

However, there are times when we find ourselves venturing outside our passion or interest. Our job as a marketer now involves a little bit more work to get inside the head of our potential prospects. Next article I will talk more about the marketing process and give you some handy tips for getting to know your potential customer better. This can help you refine your marketing approach in your familiar niche or develop your marketing strategy in a new niche you may be venturing into.

Leevi Romanik

About Leevi Romanik

Get The Secrets of Creating and Successfully Selling Your Own Product - Leevi reveals product creation shortcuts and marketing that works to generate passive income from your own info-product in the Triple Threat Info-Product System. Grab the FREE video "How To Guarantee Your Niche is a WINNER" Click Link For Instant Access.

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27 Comments

  • Awesome post, Leevi. I make a full-time income by identifying gaps in marketplaces and having info products developed to fill those gaps. As you say, the key to that process is market research.

    Too many people start with the product first, only to find that there’s no market for it. Start with the audience first (or, at the very least, the niche); find out what they’re desperately looking for but can’t find; them figure out the way to give it to them. It works every time!

    Moe Muise

    • Thanks Moe, appreciate the comment.

      Your last paragraph is a great guiding principle.

      Leevi

  • I am most interested in learning about marketing outside your passion areas. One of my passions is the marketing itself, so I love learning better ways of getting to know your customers!

    • Hi Graham,

      I got you covered in my next article, which is about getting in the shoes of your customer. I think moving outside your passion areas is a real art.
      Keep an eye out for my article next week you will enjoy it.

      Leevi

  • Nice article Leevi. I never thought of a survey, I always thought they were unnecessary, but you have a good point. I wonder if surveys are used to stay in contact with your customer.

    • Hi Tony

      If it has been a while since you have contacted a customer or your list, is is best to “warm them up” a bit before just dropping a survey on them. Say hi, apologies for the lapse in contact, give them some great free info and then in a few emails drop in the survey. This will increase the likelihood of responses.

      Leevi

  • After i failed in my first eBook launch, this article has just come in time. I like the approach you used to test the market for your eBook.Thanks Leevi!

    • Hi Eddy

      I feel your pain, it really sucks when you work on a project that doesn’t get the results you hoped for.

      But I urge you to keep trying, especially now you have a better idea about market research. You have done the process of putting together an ebook before, so you know you can do it and you obviously have something to share. Give it another go!

      Leevi

  • Market research is the most important tool that a business can use to decide if it will lunch a product or not because whatever someone believe about his idea he cannot know if it will sell without asking first the potential prospects.

  • Nice start for you here on EJ Leevi and welcome!

    What kind of conversion rate do you look for on your test sales page? Also what sample size do you take? I imagine that about a hundred visitors are enough.

    How many test markets pan out for you, let’s say out of ten different markets?

    • Hi Dennis

      Thanks for your kind words, it is great to be part of the EJ community.

      I don’t want to open up a whole can of worms with conversion testing and validity etc, but I think if you are just doing a put together sales page and a quick adwords campaign then anything around 1% is probably a good indicator that there is potential in the market (of course factor in ROI which depends on cpc and the cost of your product).

      Given that you can now tweak your sales copy and adwords, that conversion rate should only rise.

      To be honest if you do your market research it is not a question of if you will make money but how much will you make. I really try to only enter a market if I think it is viable. No one, myself included likes to waste time and money on projects.

      Leevi

  • great advice I went to adwords to find some targeted search terms. I am just getting started online and your advice is appreciated

  • If there were two things I could help you with right now, what would they be?

    Or

    If money was not a problem, what would you buy?

    Then look for ways to reduce this barrier and offer incentives to buy one small item… and then dripfeed them more and more and more…

    Ivan

    • Well said Ivan.

      A straight to the point question that you can put into your first autoresponder instead of a survey. And this is great because it also engages your subscriber, so you have a higher chance of future openings.

      Leevi

  • Hi Leevi, nice tips of research, I see projective techniques are often used in market research to help uncover findings in areas where those researched are thought to be reluctant or unable to expose their thoughts and feelings via more straightforward questioning techniques.

  • your right about surveys. They can really help you get to know what your customers want and what you can do to help them get it. I have also found that it is a great way to get them more engaged on the blog when you take their advice.

  • Surveys get you customer data fast, but they are a little outdated. There are other ways of getting customer feedback, if you have the time for it, focus group discussions yield a lot of insight. Consumers’ Facebook activities also indicate what they want.

  • Hi Leevi. Can you elaborate a bit on the testing phase? For example, did you set up a few different pages with varying prices so that you knew which price was most likely to result in sales etc?

    • You could certainly do that and probably should(but I didn’t!)

      This is just the quick and dirty way to test the validity of the market. I guess there are so many variables to test, I was just looking at are people in this market buying. Certainly their buying behavior can be influenced by the price, so just stick with a safe mid range one, if you don’t get any sales and you think you should be, you could drop the price and run the tests for longer.

      I like to play around with price once the market is identified as being a buying market, my product is done, the sales copy is done and bonuses are stacked – now I have everything set and I can play with price as the only variable.

      I hope that helps, let me know if you need anymore help.

      Leevi

  • Market surveys, testing, and tweaking are everything…
    it’s a must..

  • I too learned it the hard way..My first website was a forum about marriages. I tried to bring in traffic. But ads placed on it didn’t convert well. I have now learned that real money is made when you a have something to sell .. either a product or a service.

  • Hey leevi, great article. I feel you, I’m also sick and tired of 9-5 day job. It isn’t give me much of my time with less savings. Your right about no money gets made until something gets sold. There is a need to establish a product before you can sell something. Market Research and Product Development is an important key to any business online. A good way to building relationship is to asked your readers about something they want.

  • Very interesting post about market research. I do this process almost like a routine for my clients but learn a lot of little tricks that I didn’t know about. Really enjoyed reading about the test website buy now button leading to an empty page to collect emails. Very smart idea that I might explore one day during my website design enterprises.

  • I did some research on key words and set up two different sites to test my messaging. I try to keep fresh information on my home page and try to add to it at least once a month. We are getting some traction but it seems to take for ever… Need to try a survey Thanks

  • Hi Levii

    You have shared little guidance about creating winning product to support us generate income from internet. Sometimes, I fell jealous to you all who have been success in online. I’ve learned how to build website and how to promote it to get a lot of traffic, but actually it’s hard for me to to maintain my schedule because I have to works daily from 7 to 4, sometimes more… :((

    However, that is important for me to always try the best. Your article give motivation because I’m not fully enjoy with our jobs too for right now. Thanks for sharing

  • Hi Leevi! just wanted to ask if there is any efficient method of getting feedback except surveys? people tend to skip those or most likely you get feedback far from reality. nothing behind the numbers..

  • Thanks for your posting. It helps someone like me who is still learning what is the right and wrong way to go about this whole SEO researching which can be overwhelming at times. I think I’m going to dabble on adwords now and see if it can help me too

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