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.