How to Test Market Demand for a New Product or Service
How do you test the market demand for a new product or service? How do you validate the market demand before creating a product?
The best way to guarantee that you constantly sell out your products every single time is to first ensure that there is a market demand for your new product.
You can test the market demand for your new e-commerce product by first advertising it on Instagram, Facebook or any social media platform where your target audience is found in large numbers to see what they will say about it.
Looking at how fast social selling is becoming a thing, it’s also possible to sell a bunch of beauty products on Instagram without spending a dime.
Hundreds of small businesses have failed because they missed out on testing the market demand for their product or service before launching out.
If there’s no demand for the product you want to create, then you must have enough budget (in millions of dollars) to create a market demand for it.
Doing the later is hard especially if you are a small business owner. In that case, it will be in your best interest to first test market demand for your new e-commerce product or service long before investing in it.
To get you started, let’s paint a picture for you.
You’re an enthusiast about a particular product or group of products. You now want to venture into the business fully, whereby you can become an international figure to reckon within your niche.
There’s nothing bad about following your passion to join a line of business, but you need to ascertain the acceptability and market value of such a product before throwing your hat into the race.
Related: Launching a New Product? Here Are 6 Creative Ways to Promote It
The e-commerce community is a very competitive one and you might find it challenging to keep up with the established brands in the industry.
So, if you must weather the storm of making sales or offering services, then it’s vital that you have ideas about how to test market demand for a new product or service before getting financially committed to it.
Below Are Some Clues to Help You Test Your New Product Ideas
1. Choose the Target Audience
The first technique for testing the effectiveness of a new product idea before investing money into it is choosing the right audience.
It’s better to “waste” $1,000 trying to find who your target audience is than jumping out to create a product a product nobody wants to buy. It can shatter your creative spirit if care is not taken.
The aim of every business is to provide value in exchange for money. On the other hand, it can be a season of profits when you venture into an untapped industry.
Let’s say you were the first person to dive into the mini importation of a hot product before any other person does. You can imagine the influx of buyers, especially if the product is needed at that time.
It can be a tricky affair because not all “hot products” would sell massively to everyone. There is a particular group of people that would buy it more than the others would.
That informs the reason why you should decide on the target audience or groups of people that wouldn’t hesitate to open their wallets to get the product.
Related: 10 Startup Tips for Launching a Business When You Are in Debt
Worthy of note is that no definite rule defines the purchase decision of buyers. In some cases, the change of demographics may cause potentials, buyers, to decide for or against a product.
Likewise, the affordability of the product or service and the willingness of the target audience also have roles to play in the selection of the target audience.
2. Make Researches
Experienced business owners use market research to check the real-world demand for their product idea before launching it.
Now that you’ve decided on the categories of people that may be interested in the product, the next step would be to run a test or make researches.
Most times, sellers are caught unaware after launching a product that “looks good to sell” only to discover that the market is either saturated or is no longer interested in it.
In order to avoid this, it demands that you make researches to check the interest of the target audience. Some of the platforms you can use to do that are the Google Keyword Tool (AdWords) and Google Trends.
The Google Keyword Tool allows you to make researches on the keywords related to the product you intend to sell. It also shows the volumes of searches in that regard, just as it offers you insights into other related keywords that potential buyers may be interested in.
When it comes to search engine marketing, the digital marketer ranking for more buyers’ keywords gets all the money.
Related: How to Compete for Keyword Rankings in a Highly Competitive Industry
On the other hand, Google Trends has been one of the primary tools used by startups to ascertain the acceptability of their products and services.
The analytical tool shows the volume of the searches in the past couple of months (and years), the regions that have a higher interest in it, and other related items to the product.
With these analytical tools, you can be sure that your research would be fruitful, just as you would have valuable insights into the demands for the products and services.
3. Reach Out to the Potential Customers
For you to effectively test a new product idea before launching it, one of the first things you must do is to reach out to your potential customers (prospects) and let them know that a new kid is invading the market soon.
It can be tricky, but you can still try to reach out to potential customers. Such a brave step empowers you to gain more information, such as the needs of the potential buyers, their willingness to purchase it, and the amount they are willing to spend on it.
As mentioned earlier, it can be tricky but once you have the data, you can then set about the task of tweaking your products or service to conform to the potential customers’ expectations.
4. Analyze Your Competition
Spying on your competitors is one of the feasible approaches to figuring out how to test market demand for a new product or service.
The rule of thumb is to look for loopholes in your competitors’ operations, and see if you can use those weaknesses to build the strength of your business.
Start by going through the reviews and testimonials of the previous buyers of your competitors.
If there are some negative reviews, especially for the same or similar products or services that you offer, you can then use such to make improvements on offering better quality and service.
You can also extend the search by checking the social media networks of your competitors to see the active engagements of the target audience.
Higher engagement in terms of comments and likes is a good sign that the market for the product or service you intend offering is still booming. But this is not always the case in all new products.
Products that solve unique problems people are shy to discuss in public won’t gather as many comments. So, do not think it’s a sign of low demand.
If you are scared of low patronage you can create a prototype of the product, set up your ad, and send traffic to a store that payment link is still in test mode. That way, their cards won’t be charged.
5. Test the Market Ahead of Time
There are a bunch of diverse market testing methods one could use to determine the real-world demand of a product before it launches.
Related: The Benefits of E-Commerce Compared to Traditional Business
How fast you are able to ascertain the profitability of your rare product idea is a function of the number of product testing formula you have at your disposal.
Your new product or service would do well if you have enough information about the viability in the market.
Therefore, don’t hesitate to put the ideas above to good use to test the market demand for the product or service you intend launching even if you are on a shoestring budget.
If you fail to implement these unique marketing strategies we shared with you today, you might be forced to choose the second option of trying to create a demand for a new product or service buyers probably doesn’t need.
Investing in a lot of inventory or stocking your online store before coming back to do demand validation for the product you want to sell is one huge business mistake you wouldn’t want to make.
It’s always important to test your e-commerce idea before investing in it.
