Tuned In Process | Find Unresolved Problems | Understand Buyer Personas | Quantify the Impact | Create Breakthrough Experiences | Articulate Powerful Ideas | Establish Authentic Connections | Create a Resonator
How do we know when we have a potential winner?
Do you have a process to determine if an idea will become a breakthrough product?
Do you leave success to luck, hope or chance?
When you have a new product idea do you ask friends, family members, buddies on the golf course or current customers if they think it will be a hit?
There are three important criteria to consider when you measure the potential market for your product:
- Is the problem urgent?
- Is the problem pervasive?
- Are buyers willing to pay to have this problem solved (and if so how much)?
Quantifying this information is a critical and often overlooked step that should be performed before you develop any product or service. Or, go ahead and roll the dice... about 10% of the time, companies are "lucky" and launch a product that connects.
Once you have found an unresolved problem and created buyer personas, it’s time to conduct qualitative research. Quantifying the impact will help build a business case for your new product and it is critical not to skip this step (as many people do).
How do you know if your team has quantified the opportunity and not just jumped into development? Show me the data!
- Is this problem urgent or “not a big deal”?
- Is there a large enough number of buyers who have the unresolved problem your product solves?
- Are they willing to pay for your solution?
"Show me the data, and show me the money!" Be extra careful here as people have all kinds of problems but this doesn't mean they are willing to pay to have them solved.
Where can you get this information?
- Your market: first, your potential customers, then people who are evaluating your current product, and last, your current customers
- Public information sources
- Specialist research reports
- Surveys
- Telemarketers
You should also conduct an acid test prior to moving forward to ensure you completely solved the problem. An acid test simply requires you to show a prototype of your product to potential buyers (on paper is fine). Do this one-on-one, not in a focus group and just describe what it does (don't tell them the benefits). Ask what problem they think it solves, how would they benefit from using it and what impact would it have on them, their family or their company.
Next, ask them to place existing products from other companies that solve a similar problem on an Impact Continuum Scale (below). Then have them put your new product on the scale.
|---|---|---|---|---|---|---|---|---|
Low Impact High Impact
This information gives you a good idea of how potential buyers see your product's value, which in turn gives you information about pricing.
The common mistake companies make in pricing the perfect solution to a buyer's unresolved problem is undervaluing that solution. Review the other product solutions your buyers mentioned. Focus on the perceived value of your solution (as market leading organizations do), not a cost plus model that adds little, if anything, to shareholder value. How high an impact did your product score on the Impact Continuum Scale?
Should I write a business proposal?
Research shows 70% of new businesses and products are introduced without a business proposal. It should not surprise anyone on the board of directors at these organizations to learn that 3 out of 4 new products launched are gone from the market within 12 months.
What should a business proposal include?
- Detailed explanation of the problem you are solving
- Who are your buyer personas and how many of them are out there?
- What product or service will you create to solve their problem?
- How does your product or service impact buyers?
- How will buyers quantify the value?
- What will it take to convert prospects into customers?
If you would like to learn more about quantifying the impact, please contact us.
