As entrepreneurs, we all think we are “in touch” with our target market.
When we create and offer products and services, we do so with the implicit belief that we have a good handle on what our market wants, what our market needs, and what price our market is willing to bear.
This confidence can come from researching and surveying the market or seeing competitors succeed in our vertical. But for many entrepreneurs, this fundamental sense of understanding comes from being actually a part of the market and reflecting on our own needs, wants, and price points.
Yet if we know so much about our target market, why do so many of us fail?
Yes, I said it. Many entrepreneurs fail – including me.
Last summer, I had an idea for an online video series about making money doing what you love. I was convinced it was going to be a huge success and would yield enough returns for me to live on for months while building a fan base of adoring followers who would loyally buy all of my future products. I wasted no time and dedicated all my resources to crafting this product that I believed would really put me on the map.
My first video offering in the series was an hour long and included fancy PowerPoint illustrations and fun graphics. The download came with two worksheets and access to a series of free informational emails. I priced it at $49.99 USD, and cultivated a core of launch affiliates to help me spread the word.
Launch day came…and went. With one sale.
In fact, one sale was the only sale of the video I ever made.
I never made a follow-up video, and I took the site and all related materials down after eight months because I was – and honestly, still continue to be – so utterly embarrassed by how huge a failure this initiative turned out to be.
My embarrassment was so acute not just because I failed, but because I had so clearly failed to understand the needs, wants, and price point of my target market. I built the entire product around what I would buy and used only that measurement to guide the product, promotion, and sales copy.
What it came down to was that I was really out of touch with the needs, wants, and price point of my target market.
I was reminded of this unflattering event this afternoon when I was talking to a friend who works in development consulting. Over the course of our conversation, they revealed that they were a little confounded by a market revelation they had:
“I can’t believe it, Nacie – I’ve been planning to sell this new service for $50,000 and just heard from a sales lead that they – and no one they know – would consider paying no more than $3,000 for it. I guess it shows how out of touch I’ve gotten with what [the market] would buy…”
The worst part – or the most comforting part – is that my friend and I aren’t alone in such gross miscalculations of our target market needs, wants, or price points. Think about Dean Kamen, the creator of Segway scooters – when these gyro-scooters were first launched in a massive expose on Good Morning America in 2001, they had been heralded as “an invention bigger than the internet and the PC” that were supposed to “revolutionize city planning…and create an upheaval in several existing industries.”
Yet ten years later, in the United States they are little more than punchlines to mall cop jokes. In fact, in 2010 the Segway made the top of Time Magazine’s 50 worst inventions of all time (subprime mortgages and pop-up ads also made the list).
How could an invention that seemed like such a captivating, good idea fall so hard on its face?
Because (say it with me now) it was out of touch with the needs, wants, and price point of its target market.
Over the years, I’ve observed that losing touch with your target market coincides with becoming too submerged and surrounded by early adopters or industry peers.
Translation: entrepreneurs lose touch by spending all their time in an ideological bubble.
When most of your daily interactions are with people in your field or who are already loyal followers of your brand, you start to think, create ideas, and receive feedback in a biased bubble of influence. You are talking to the small percentage of your potential market who already “get it” and don’t need to be sold – their needs, wants, and price point align likely with yours, meaning that your suggestions or prototypes are met with positive reinforcement.
Take my failed video series – I sent the prototype to about a dozen people who already “drank the KoolAid” of my brand for feedback, endorsements, and affiliate help. They all raved about it, leading me to believe that once the product went live it would receive similar praise from the larger market. Nope.
Consider my friend – he is a savvy business man with a booming small business. Before sharing the $50k price point with a sales lead, he floated the service and cost by his close business network and received positive feedback, leading him to believe that the price would be equally accepted by the market at large. Heck No.
And once again, let’s revisit our friend the Segway – I don’t know the details of this case personally, but I can imagine that no one would be able to book a product to launch on Good Morning America (a huge, national morning show) without a bevy of endorsements and positive support, which led the producers to think the product had legs. Capital N-O.
The problem is that for most of our industries, enough money to call a living (let alone a flourishing business) doesn’t come from selling to a small (likely saturated) percentage of our super fans and industry colleagues…it comes from successfully selling to a broader market percentage and even into demographics beyond our target markets. And to do that, we need to stay in touch with our non-KoolAid drinking targets.
“How?” you ask. The answer is simpler than you’d think: take time to unplug from your blog, email, social network, and business contacts. Instead, have some casual, face-to-face conversations with people you meet on a daily basis – at the school drop-off or in the market or at the coffee shop or even at home – about their needs, wants, and price points as consumers. Share your business offerings and ask for their authentic feedback.
Because the sooner you can get out of your ideological bubble, the faster you can get back in touch with your target market and kick your sales into high gear.
Here’s to your Entrepreneur’s Journey,