Interacting with the types of customers you hope will buy your new product or service is an essential part of testing your ideas. Here are key things you need to be aware of when testing your ideas with customers.
Why is it important to test ideas with customers?
Unfortunately the history of business is littered with failed ideas. Too many people come up with concepts which they think are great, and into which they invest lots of time, effort, and money to create a product or service, only to find that no-one, or not enough people, want to buy it.
It’s all too easy to be pumped up with the notion that we’ve invented the best thing since sliced bread, especially as when we share our concept with family, friends and associates they agree that it’s great. Perhaps they just don’t want to upset us by telling the truth. Or maybe, just like us, they just haven’t thought things through from the customer’s perspective.
Your idea may well be one that will prove to be a great success, but it’s important to test ideas with the people that really matter – your customers. They can not only validate your idea, but help you develop it into a successful product or service.
At what points do I need to involve customers in testing?
It’s good to involve customers at every stage of the development of a product or service.
At the concept stage – when the idea has just formulated itself in your mind – talk to some customers to seek their views about whether what you’re proposing is something that appeals to them. Don’t go into too much detail – just get their initial reactions and if they’re positive ones ask some basic questions, such as what sort of price they’d expect to pay. In light of customer feedback you may want to adapt your concept to some degree. You’ve now begun the process of using customers to help narrow-down which parts of the idea work and which don’t.
No matter whether your idea is for a product or service, it’s good to pilot or prototype it; give some customers a chance to experience it and to offer their opinions. For a food business this might involve trying out new recipes and letting customers have a free sample. For a training provider this could be sharing a course outline with potential customers.
Depending on the product or service, you may need several pilot stages. A food business might drop some recipes as a result of the customer feedback and fine-tune other dishes that received good reactions. A training provider may want to run a free pilot version of a course. Someone offering fitness training may want to run a reduced-price trial session. Piloting gives you the opportunity to fine-tune your offering stage-by-stage, until you have a tightly focussed product or service that’s ready to be made available to all customers. The process gives you the opportunity to involve customers at every stage and avoid costly errors.
How many customers do I need to involve in testing?
Deciding on the numbers of customers you need for any given market test is a question that vexes even professional statisticians! Generally speaking, if your idea is for a product or service aimed at a mass of individual consumers or thousands of other businesses, it’s a good idea to test it on as many customers as is practical and affordable.
You need to have what’s known as a significant sample – enough testers to ensure that the results you get are reliable and not just down to random chance.
Sales person 1: ‘The sales of our new T-shirts are really disappointing.’
Sales person 2: ‘I can’t understand it – every customer who saw our samples loved them.’
How many people does the second sales person mean by ‘everyone’? If they discussed their samples with 50 or more people in their target market, then they’re unlucky to have such poor sales. But if they only talked half to a dozen people that might not be representative.
If your idea is for a product or service aimed at a smaller market, e.g business customers within a certain geographical area or a certain sector, you may be able to test your idea with a smaller number of customers. If you find widely differing feedback it’s wise to talk to more people.
A qualitative approach, involves in-depth testing of an idea, usually with a smaller number of customers.
The aim is to thoroughly explore the customers’ views about what you’re proposing. Does it meet their needs? If not, why not? What would need to be changed in order for it to be of use to them? If it does appeal to them, how would they use it? How often? In what circumstances?
A quantitativeapproach, involves testing to much less depth, but with a large number of customers. Typically, customers are asked a dozen or so questions. This method enable you to quickly collect a large number of responses on various aspects of a proposed product or service. You then have a significant amount of data on which to base your decisions.
The way you present your idea to customers depends on what it’s about and what stage you’ve reached in testing it.
What sort of questions can I ask in a survey?
Here are the sorts of survey questions that can help you gain an insight into what people feel about your idea.
A rating scale – A rating scale question requires the customer to select the point in the scale that most accurately reflects their feelings. Typically you would use a 1 to 5 rating scale here.
For example is you want to find out if a customer would use a service the rating scale could contain the following options:
Definitively (=strongly favourable)
Probably (=somewhat favourable)
Probably not (=somewhat unfavourable)
Definitely not (=strongly unfavourable).
A multiple-choice question – A multiple-choice question requires the customer to select one or more options from a list.
How often would you use this product?
A comment box – You can have open ended questions that customers answers by putting their response in a comment box.
A demographic type question – Demographic questions can be used to inform you about the respondents’ backgrounds, ages, etc. Examples include:
Gender: Male, Female
Age: Under 18, 18-25, 26-35, 35-50, 50+
Income: Under £20,000 pa, £20-30,000 pa, £31- 40,000 pa, £41,000+ pa
Home: Live with parents, Rent, Home owner.
Checklist: Advice for conducting face-to-face conversations with customers about business ideas
Here are some tips to bear in mind when having research conversations with customers. Login to save this checklist to your profile for future use. (To register to join and enjoy the benefits of membership click on the link at the top right of the page. It will only take a few minutes to create your profile).
Can I raise money for a new product while testing it?
Crowdfunding is an online process that enables you to test an idea for a new product or service, and at the same time raise the money to make the idea a reality. Basically, it involves pitching your idea online to attract investment from lots of people. One of the most successful examples of this is the craft beer producers Brewdog, whose ideas were so well liked by beer fans that 14,000 of them made a total investment of £10 million in return for shares in the company.
Brewdog did their own crowdfunding but there are now a number of online platforms which enable you – for a percentage of the money raised – to put your ideas in front of people who are looking to invest money in new business ventures.
One of the disadvantages of equity crowdfunding, is that it costs you – not only in terms of the percentage taken by the platform, but also the share in your business that you to give to investors. Also, your idea is made public, so it could open it up to competition.