Market Validation
Overview and Objective
Market validation is a series of interviews of people
in your target market. These interviews are used to test
a product concept against a potential target market.
A market validation should always be done before introducing
a product. Ideally, market validation should start much
earlier in the process. A better understanding of the
target market will help build a better, more focused product.
A market validation will take a minimum of four weeks,
more likely take six to eight, depending on the number
of interviews and the number of people performing the
interviews.
Pick one objective for your market validation. Either
verify the target market, or verify the positioning and
value statements. Trying to do both of these in a single
market validation will create too many variables and weaken
the value of the market validation. Write down your objective
and make sure everyone involved agrees on the objective
before proceeding.
Starting a Market Validation
Before starting a market validation you must identify
your target market. It is possible to do a market validation
with multiple target markets, but that makes little sense.
Narrow down the target market to one if you are testing
positioning and 2 or 3 if you are testing the target market.
Define, as best you can, the target market. Write down
the answers to the following questions:
- What types of companies do your potential clients
work for?
- What is their job title?
- How will your product make their lives better?
- How can you find them?
Be sure to narrow down your target market and positioning
before launching your market validation.
Finding the Target Market
Market validations can be done with as few as three or
four interviews, but are more valid using a larger data
set. If you are testing a consumer product, you may want
hundreds of interviews. If you are testing a business-to-business
product, you can often get a good market validation out
of 20-30 interviews. Pick the number of interviews that
you want and multiply it by three to get the number of
contacts you will need.
You can find people to interview in your target audience
through a number of methods including the following:
*
- Cold calling. The most direct method is cold-calling
into companies. Ask for the person with the appropriate
title and tell them that you are seeking their advice
on a new product. People are more likely to talk to
you if you are seeking their advice than they will be
if you are trying to sell them a product.
- Advertising. Online advertising is fast and
very targeted. To find the right audience, use advertising
in an electronic publication that goes to your target
market. You will need an incentive for people to sign
up for the interview. You can use a small gift or a
drawing for a larger prize.
- E-mail. You can rent e-mail lists or use viral
marketing to get to the right audience. If you already
know a handful of people well enough, e-mail them. You
might want to try to get people to sign up by passing
on an email. They will need an incentive for passing
on the e-mail as well as for signing up.
Be sure to let your interviewees know when you plan on
conducting the interviews. Set up appointments as soon
as possible because any appointments will end up being
rescheduled. Also, be sure to let them know how much of
their time it will take.
It is ideal to do some number of the interviews in person.
You will always get more information from someone who
is sitting in front of you than you will get over the
phone. Doing the interviews via a web survey is not recommended.
The type of information that you are trying to get is
too subtle and subjective for multiple choice answers.
Building the Question Set
The most important part of the market validation is the
questions that you ask and how you ask them. Unlike a
scientific survey, you are trying to understand the emotions
of your target market. You will want to ask open-ended
questions that get them to talking about how and why they
do things and what will make them buy your product. Whether
you are trying to validate your target market or your
positioning, a fundamental question that you should always
ask is, "What keeps you up at night?" This one
question will tell you where the priorities are for this
person at this point in time. The answer may have nothing
to do with your product, but it will tell you where their
priorities will be when considering any product or service.
Beyond the basic first question, you will need to construct
questions that allow you to try out your product positioning
and/or target market. Here are some example questions:
- Are you familiar with [product/service]?
- Use your positioning statement, then ask, "Do
you see value in this [product/service] for your organization?"
- Are you planning to invest in this [product/service]
this year? Next year?
- Who is responsible in your organization for implementing
products or services in this space?
You will want to have many questions that are specific
to your product including questions about their environment
(which will tell you how easy it will be to add your product
to their environment), cultural issues (which will tell
you how easy it will be to adopt your product), and budgeting
(which will tell you if people actually have the money
to buy your product).
The more time you ask from people the fewer you will
get to sign up for your interview, so it is best to keep
the questions to a minimum. Fifteen minutes is an optimum
time for scheduling the interviews, but it is difficult
to gain any real depth in 15 minutes. Twenty to thirty
minutes is probably a more realistic time. If you are
asking people for an hour or more, you are going to need
a significant incentive to get them to take that much
time with you.
Testing the Question Set
It is important to test the question set. Run three to
five test interviews, then review your questions and make
sure that you are getting the results that you want. The
following are some things to consider during this review:
- Are the questions open-ended enough to start a dialog?
- Is this the right target market?
- How long are the interviews taking?
- Are some questions unnecessary?
- Have you uncovered something in these interviews
that you need to ask some more detail about?
- Which questions were misunderstood and how can they
be reworded?
Conducting the Interviews
Ideally you, as the product marketing manager, should
be conducting the interviews. Since you have the most
intimate knowledge of the product and the market, you
gain the most from talking to the interviewees. However,
this may not be possible for a product that will require
a large number of interviews. You should certainly be
involved in the first few interviews to understand if
the right questions are being asked. If you can't conduct
the interviews yourself, try to do at least some of them.
Analyzing the Data
Analyzing the data is what you should do personally.
If you have an outside firm do a market validation for
you, they may not reach the conlusions you are looking
for, or may neglect some data that they find insignificant
but that may interest you, from your own point of view.
If you use an outside firm, be sure to at least take an
active role in analyzing the data, if not doing it yourself.
It is a good idea to create a high-level summary for
management that includes key findings and suggested changes
in product positioning, value statement, and target market.
By Infrasystems - Barbara Tallent
