Market Validation Techniques: Should I Invest In That?

Should I Invest in That?

For any business person, the decision to invest

…in an idea

…in a traffic source

…in a website

…in a campaign

can feel arbitrary. It doesn’t have to. I speak and write about the abundance of inexpensive data available to us to make such decisions.

Here’s how you can use the optimization tools we use to validate a market, campaign or other business investment — whatever your “thing” is.

First, let’s distinguish between Primary and Secondary research.

Two Kinds of Research

Primary Research: What you learn about your target market.

Most of what I’m going to discuss here is primary research. I’m going to show you how to collect data that tells you what your potential prospects want from you.

Primary research is the most valuable relevant and useful research. And until recently, it was difficult to collect.

  • Interviews
  • Surveys
  • Feedback
  • Focus Groups
  • Taste Tests
  • Trials
  • Analytics
  • AB Tests

At it’s best, primary research is behavioral, quantitative and follows the rules of behavioral data.

The challenge with primary research is that you generally have to launch something to collect it.

Secondary Research: What others discovered about your market.

Secondary research is simply researching others’ research. It can help you determine the size of the entire market for your thing.

Secondary research can tell you about your total available market.
Secondary research can tell you about your total available market.

Sources of secondary research include:

  • Research about my marketplace.
  • Competitors who offer alternatives to my thing.
  • Things that are Complimentary to my thing.
  • Blogs about my thing.

Secondary research gives you delicious qualitative data.

The Maximum Viable Non-Product (MVNP)

You are probably familiar with the concept of a minimum viable product, or MVP. It is the minimum feature set a product needs to solve the most basic needs of a potential customer. The idea is that, if the MVP fails, the full-featured product may also fail.

I’d like to introduce the maximum viable non-product, or MVNP. The MVNP is the maximum representation of a product you can present without actually creating the product. It is designed to test two things:

  1. The idea or concept of the product or offering
  2. The persuasive words and images that would sell the product or offering

As a secondary effect, an MVNP can build a list of potential buyers if you decide to proceed based on the data.

If this is how you build an MVP:

How to build a minimum viable product.
Image Source

This is where an MVNP fits:

An MVNP presents a product concept and persuasive components.
An MVNP presents a product concept and persuasive components.

Kinds of MVNPs

An MVNP can be produced in any environment that allows you to present the following:

  • An offer relevant to your target audience.
  • A measurable conversion, usually a form.
  • Copy and images that communicate the value of your offer.
  • Analytics to track results. Consider a free Google Analytics account.

 The Landing Page

Your MVNP can be as simple as a landing page that describes the product and persuades visitors to do something measurable. We love Unbounce for creating effective landing pages.

The Microsite

If you feel you need more than a page to express your idea and marketing message, you might consider a multi-page microsite. It’s usually simple to setup a WordPress site for this purpose.

Facebook

Facebook offers and entire ecosystem for bringing targeted traffic to a page. The ability to test a variety of ads and track the results is unmatched.

Facebook is a highly targetable way to launch an MVNP
Facebook is a highly targetable way to launch an MVNP

Crowdfunding Sites

It takes more work to setup a crowdfunding campaign at Kickstarter, Indiegogo or other niche sites. However, you will get very good idea of whether your idea and marketing message will generate revenue. And you could end up with some funding.

Building your MVNP

We call the MVNP the maximum viable non-product because you should bring all you have to bear on it. What kinds of content do you have?

  • An existing site
  • Social network page
  • Prototype
  • Existing customers
  • Testimonials
  • Content: Video, photos, eBooks, reports, blog posts

All of this can be part of your MVNP.

Calls to Action

You want your MVNP to simulate the experience of saying “yes” to your thing as much as possible. If you’ll sell your thing online, you’re MVNP should ask visitors to “Buy Now” or “Add to Cart”. If visitors must sign up for your thing, take them all the way through the process. Yes, you’ll have to apologize on the last page that the thing isn’t yet available, but this is very valuable data.

You should always see an offer that asks the visitor to “pay” something. I recommend that you ask for their email address at a minimum. This creates an audience for future versions, and a list of prospects, if you decide to launch your thing.

Other offers to consider:

  • “Tell me when the thing launches”
  • “Send me an invitation to buy the thing”
  • “Pre-order the thing”

Remember that you can launch multiple MVNPs. This would allow you to try a variety of features, prices and benefits. You are testing both the idea and your ability to market it.

Who Will See Your MVNP?

The best data will be collected from people like your prospects. You can invite people to view your MVNP through a number of sources.

You should first determine if you can get enough people to your MVNP. Your testable market is defined as the number of people who would buy your thing that you can reach for a reasonable budget.

Your test market are the people who can buy your thing that you can afford to reach.
Your test market are the people who can buy your thing that you can afford to reach.

To get an idea of how large your potential market is, I recommend the Google Adwords Keyword Planner. You’ll need to setup an adwords account to use it. You can also use a service like SEMRush or SpyFu to research your target market and your competitors.

Ad Traffic

Advertise your MVNP through Google Adwords or Facebook ads.

Research Websites

Create an MVNP and let a research site bring people to review it. We are fans of inexpensive survey sites like UsabilityHub and Helios.

A Relevant Email List

Do you have access to an email list that contains the kind of people who might want your product?

Relevant Social Networks

Do you have a social network that contains the kind of people that would buy your thing? This is a source of MVNP viewers.

Launch the MVNP

When you launch the MVNP, you’ll want to send only enough traffic to get an idea of how it’s working.

If you send 1000 people and 10 sign up, that’s a 1% conversion rate. But that’s a small sample size. If you can get 100 people to convert, that’s a better sample size. It might take 10,000 visits to get 100, but you will have more confidence in this 1% conversion rate.

Get Creative

As you become more comfortable with these tools and techniques, you will become more creative in your approaches. This is all about reducing risk, and there’s never been a better time to test your ideas before launching a product.

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