Before a product launch, you make countless, critical decisions, each of which can bring you closer to – or further from – market success. It's easy to get overwhelmed, so respond to the market signals that matter most.
How can you maximize chances of market success and minimize risks of failure? By understanding your market. Unfortunately, your market isn't going to call to spell it out for you. So how do you know what your market really wants, needs, and will pay for?
What market signals really matter? What's the best way to get them quickly? And what do they tell you and how can you respond?
Market Signals SOS
According to our research with more than 2,000 companies, 86% of product managers do not conduct market research. Why? They say it's too time consuming and expensive, and most don't know how.
We’ve combed through data from our research to uncover best practices so you can quickly gather, understand, and respond to market signals.
Your market is more than your customers. Current customers are an important part of your target market, but they are a subset. Of course you should understand their needs and validate solutions with them. But you should also try to understand the needs of your broader target market.
What and When for Product Planning
We're going to assume that you know who your target market is and you can identify them (which can be easier said than done). We'll cover how to do that in a later post.
First, identify critical needs your market has: Pains or problems that your target and existing customers have. Ideally your product solves pressing needs, that competitive products don't, so your solution provides high value.
The top five top market signals to gather are:
- General market needs and trends. Gather these by attending industry events. Read industry media, related industry media, tech media, third-party analyst reports, online review sites (what people are saying about competitor products as well as yours), etc. This information is typically easy to access and is helpful on a macro level.
- Critical market needs and trends that your product can address. Identify unmet market needs and technology trends that matter specifically to your target market and that you are in a position to address.
Gather market signals to identify and prioritize needs and solutions by doing a small number of in-depth interviews (aka depth interviews) with representatives of your target market. These don't even require mock-ups, just a bit of structure and preparation.
First decide on representatives of your market. Talk to some customers, non-customers, and internal stakeholders. These should be fairly structured interviews, about 50 minutes each. Record them if you can (always ask the interviewee first), and take notes or have someone with you who's taking notes.
Focus on pressing pains. What do they do today that isn't working? Let them explain using examples. Ask open-ended questions like "how do you...", "tell me about a time you...", and "why?"
Often about five to ten interviews are sufficient for bubbling up common themes. Then do a few more to validate those themes.
Interviews take time (scheduling can be the hardest part!). So as soon as you have found common themes, test them at scale using on-line surveys to internal stakeholders, partners, a representative sample of customers, and your target market.
- Solution value from different sources. After you've identified top needs, you'll formulate potential solutions. If you have more ideas than resources to build them, how do you pick which ones to put on your roadmap?
One of the toughest part of product management is juggling conflicting priorities from different sources. So now you want to gather signals from the sources that matter most. Then you can compare points of view.
If you can, work with customers to define or refine options. Don't forget other points of view, which are often represented by your internal stakeholders.
To gather these points of view, you can run interviews or discuss in meetings, but we've found it faster and, often, more effective to use quick online surveys. Best practice is a technique called Best-Worst, explained well in this video from our friends at Sawtooth Software. We further recommend calibrating those results and normalize responses so that they are comparable.
We've automated these surveys in Obo, so you get calibrated, objective, comparable results in just a few clicks. Obo instantly creates the survey for you and compiles results. Here's how that looks in Obo:
- Competitive opportunities. Learn what you can about competitor products, including what needs/pains competitors say their products address. Understand competitive products' strengths and weaknesses to find solution opportunities.
- Solution value from your target market. Before you make a large investment in a new product or major product feature, take it to your target market to confirm value and priorities at scale. You can use online surveys to test solution preferences, which combinations of features are most valuable, and propensity to buy. This is can get into more advanced market research territory, but there are ways to do it creatively, quickly, and at relatively low cost. You'll need to find market panels — paid (or just eager) representative respondents. We'll cover that in a future blog post.
What and When for Post Launch
Fast forward: Your new product or new features are launched. The top market signals to read and respond to now are:
- Product usage. Product usage analytics reveal user behavior, as well as usage trends that can lead to adoption or to churn, potential product gaps. Product managers should be aware of usage, and also dig deeper to understand why behavior patterns are occurring. For example, if a new major feature isn't getting a lot of use, is that because it's hard to use? Or users don't know it's there? Or it's not useful? Use product usage analytics to determine the questions you need to answer to improve your product.
- User feedback. Got those questions in hand? Then ask your users. This is an opportunity to identify issues, areas for improvement, and new feature ideas, delighters. Then you can address what doesn’t work for customers, for example, usability issues, defects, lack of training or help, incomplete or incorrect documentation, or the feature may not be all that you'd expected. It can take time for new products and features to catch on. Keep tracking, identifying ways to improve, taking them down, and seeing what works.
- Market awareness. We all hope that after we've launched a new product or major new functionality in to the market, we'll start our joyride up the proverbial hockey stick as increasing numbers of customers clamor to buy more. If that's not your reality, it's worth testing market awareness. Does your target market and do prospects understand the value proposition and the need/pains that the product solves?
You can test market awareness with market surveys, as well as win-loss analysis. If you find that the market is not aware of your product and/or the problems it solves, then focus on marketing. If they are aware, and they're not buying, focus on sales, pricing, and packaging. Dig deeper to understand how best to reach your market with a valuable solution. And keep your eyes on the competition.
Getting Better at Reading the Signals
As you develop more experience, review what you’re doing and focus on how you can improve:
- - What market signals and techniques for reading them are most useful for your team and your product?
- - What market signals did you miss and why?
- - What can you do better next time?