How to Tell if Your Product is Great
Product development is a crucial step in building a company that will produce top sales. Through the years, innovation has been at the core of creating successful business models or new products. The question you must ask yourself is, “How can I tell if my product will satisfy customer needs in innovative ways that lead to effective marketplace performance?
Let us first analyze the characteristics of a “perfect product”. From a customer standpoint, it must fulfill a need or a want, and it must either attract a niche market or have mass–market appeal. In the mid-1990’s, the hospitality industry was suffering from low profits, and company executives were starting to worry. Although most were feeling the pressure, the Courtyard by Marriott chain gained niche market appeal by targeting cost-conscientious business travelers over high-end globetrotters–dramatically putting them ahead of their competitors. Other important qualities of a “perfect product” include: at least a 2:1 markup (5:1 or higher is optimal), a high perceived value, the ability to be replenished or repurchased by the customer often, and the ability to be easily upsold and cross-sold.
Now that we have a good foundation of what constitutes a successful product, examine the factors that make up your creation or manufactured good, and ask yourself these questions:
<!–[if !supportLists]–>· <!–[endif]–>Is the product effective and does it exemplify high quality?
<!–[if !supportLists]–>· <!–[endif]–>Does the product enhance pleasure, improve utility, or decrease pain?
<!–[if !supportLists]–>· <!–[endif]–>Must the product be reordered?
<!–[if !supportLists]–>· <!–[endif]–>Can the back-end of the product be easily developed?
A new product is only as good as its on-going product management. A fundamental principle, which business owners should never lose sight of, is the ability to listen to customers. Within iContact we constantly seek data through customer focus groups, surveys, and feedback forms within the web site and application. Taking that information and weaving it into a formal iteration process, iContact can create a formal product wish list, use tracking tools to monitor our progress, and initiate bug tracking tools to identify and fix problems in new product releases.
I hope you find this information useful in creating and managing your next great product. I will be back in a few days to talk more about email marketing tips and advice.
Cheers,
Ryan Allis
August 13th, 2008 at 11:30 am
I love your message about listening to customers. It’s something that we hear a lot about but the actual implementation of that strategy is so often done lackadaisically or not at all. It takes true commitment to the “customer thing” to have it impact your business.
Here’s a thought challenge though … as a startup company, can you really afford to take the precious time to listen to every single customer?
August 15th, 2008 at 9:10 am
Don’t forget about the buying process… Your product can be the tops on all the factors you mentioned above, but if there is no established path to market (Both logistical and psychological), your product will either fail, or require so much “heavy lifting” that it will be impractical.
August 15th, 2008 at 9:13 am
Ryan,
It is an important topic. For entrepreneurs, I think they need to make sure that their offering is going to work. Will it Work? is a question that needs to be answered before investing a lot of money and time in development and marketing.
Your suggestions of focus groups, surveys and feedback forms are good ones. Focus groups can be a bit pricey - and you might want to consider conducting some “primary research” (i.e. research with the direct users of your product/service) one on one in a semi-structured fashion. We also like to use Google Adwords testing to find out which ideas have the most resonance with your audience. A well thought-out Adwords test with good landing pages (ideally one per variation on your concept) and feedback forms can yield a lot of good market data quickly.
And don’t forget to look at your competition, your market trends and the prevalent business models. You can synthesize the competitive intelligence, market data, adwords test and semi-structured interviews into a powerful view into the usefulness of your product or offering.
- Skip
September 11th, 2008 at 5:21 pm
I looked at focus groups and found the serious companies that do work with P&G and JNJ to be very pricy indeed. Instead of spending the big money, I went with a zoomerang web survey and created my own list of questions - related to pricing, useability, etc. I didn’t want to be too public - like doing google adwords or having various landing pages in the public domain. So I engaged a group of users to get the feedback I needed - while keeping my invention somewhat guarded.
One question a friend asked right before the survery started - would I give up the idea if the focus group didn’t like it? It was a good question - because it made me realize that I was going to move ahead no matter what the focus group said. It happended that I received favorable feedback - thank goodness.