Always Test Before You Invest
Always Test Before You Invest
Business owners usually make decisions out of conjecture. New products or services are most often launched for two reasons. First the business owner gets an idea that something would excite his or her customers and just goes with it. Or, second, the business owner finds out about a new concept or idea, and acquires the rights to it without making any effort to predetermine whether or not the market wants it.
Then, after a business owner has put months and sometimes years of effort and large amounts of money into the project, he or she finds out that the market for the product is limited or does not exist.
Before you introduce a new product to the marketplace you must answer some very important questions, “Is the product or service I’m preparing to launch right for my market?” How do I know if the price I have in mind is right?” “How do I know if the offer is right?” The answers to these questions will give you a very good idea, whether or not to roll out your new product or service.
If you’re thinking about offering a new product, take a segment of your existing customer list and survey them either by phone, mail, or email. Explain to them that you have a new product you’re developing. Explain the benefit that the new product or service will bring to them. The object here is to ask them whether or not they would be interested in buying the product or service.
Remember, your goal is not to talk about a new product or service. It is to always focus on the benefit and result that your new product will render to the customer, not on the features of the product.
When you talk to your customer about what there level of interest would be in your new product, you have to describe to them the benefits they'll receive by using your new product or service. Emphasize that it’s different from anything you currently offer because it provides a unique benefit to them.
After you’ve explained in detail what your new product or service is, does, and how it will benefit them, then ask them if they’d be interested in trying it. If they’re interested, then ask them for a modest deposit that’s 100 percent refundable. By doing this, you will be able to tell whether their level of interest is real or exaggerated.
Another way to determine if there is interest in your new product is to create a selling promotion, like an advertisement for a publication, a series of sales letters, or emails. In the promotion, you would announce the product or service, and also tell people that it will not be available for delivery, shipment, or production until a particular time. Then you would give prospective customers the opportunity to pre-purchase at a discounted price with a 100 percent money-back guarantee.
The key here is not to make money, but to see if your customers or your marketplace really responds to the product. If you determine that your customers will buy your new product, even if you’re buying short-term on a test basis for another company, you’ll at least be able to figure out what it would cost you if you went ahead and produced it yourself.
Another, way to test your products out is what’s called a “focus group.” This where you rent a conference room at a shopping mall and bring in various groups of customers, prospects, and current users of other competitors products together and ask them a series of questions. You can also do this by contacting them individually, or in a group conference call.
You then ask the people questions, such as, why they bought the product, or if they would buy the product. Why they use it, what they use it for, and how it performs. What the customer liked least. Whether they would buy a different product or service for more or less money, to be effective, you need to formulate and ask at least 25 questions. Then, you tabulate the answers and form your conclusions.
Focus groups are an excellent way to test as long as you don’t base your final decision solely on the results. It’s critically important that you get the opinions of as many of your current customers as you can. This is why you need to keep in contact with your customers on a regular basis. Ask them, by phone, letter, or email, “How are we doing?” Specifically, “Are we fulfilling your needs and your expectations?”
If the customers you’ve contacted say, “No, I’m not satisfied,” you need to ask, “Why?” and then, “What can we do to give you more satisfaction and value?” It’s important to show your prospects and customers that you appreciate them and that you’re not just idly standing buy, but that you’re committed to understanding how you can better serve their interests and needs.
By asking your customers questions on a continuous basis, you get the benefit of bonding with them in a way your competitors can’t. It also enables you to get valuable information about competitive products and services. You can ask them, “Why do you do business with them?” What do you think about a competitor’s product or service?” What do you think about the people who work in the company?”
The answers to these questions will help you formulate ideas for new products or services that will better serve the needs of your marketplace. Once you have come up with an idea for a new product or service good relationships with your customers will make it much easier and less expensive to test.
Copyright© 2006 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.
Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many businesses around the world, on the subjects of leadership, achievement, goals, strategic business planning, and marketing.
Contact Joe at: joe@jlmandassociates.com
Read more articles and newsletters at: www.jlmandassociates.com
Always Test Before You Invest - To learn more about this author, visit Joe Love's Website.
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One of the biggest mistakes a business can make is launching a new product without properly testing it. Businesses lose thousands and even millions of dollars every year on products they didn’t test before introducing them to the marketplace.
Business owners usually make decisions out of conjecture. New products or services are most often launched for two reasons. First the business owner gets an idea that something would excite his or her customers and just goes with it. Or, second, the business owner finds out about a new concept or idea, and acquires the rights to it without making any effort to predetermine whether or not the market wants it.
Then, after a business owner has put months and sometimes years of effort and large amounts of money into the project, he or she finds out that the market for the product is limited or does not exist.
Before you introduce a new product to the marketplace you must answer some very important questions, “Is the product or service I’m preparing to launch right for my market?” How do I know if the price I have in mind is right?” “How do I know if the offer is right?” The answers to these questions will give you a very good idea, whether or not to roll out your new product or service.
If you’re thinking about offering a new product, take a segment of your existing customer list and survey them either by phone, mail, or email. Explain to them that you have a new product you’re developing. Explain the benefit that the new product or service will bring to them. The object here is to ask them whether or not they would be interested in buying the product or service.
Remember, your goal is not to talk about a new product or service. It is to always focus on the benefit and result that your new product will render to the customer, not on the features of the product.
When you talk to your customer about what there level of interest would be in your new product, you have to describe to them the benefits they'll receive by using your new product or service. Emphasize that it’s different from anything you currently offer because it provides a unique benefit to them.
After you’ve explained in detail what your new product or service is, does, and how it will benefit them, then ask them if they’d be interested in trying it. If they’re interested, then ask them for a modest deposit that’s 100 percent refundable. By doing this, you will be able to tell whether their level of interest is real or exaggerated.
Another way to determine if there is interest in your new product is to create a selling promotion, like an advertisement for a publication, a series of sales letters, or emails. In the promotion, you would announce the product or service, and also tell people that it will not be available for delivery, shipment, or production until a particular time. Then you would give prospective customers the opportunity to pre-purchase at a discounted price with a 100 percent money-back guarantee.
The key here is not to make money, but to see if your customers or your marketplace really responds to the product. If you determine that your customers will buy your new product, even if you’re buying short-term on a test basis for another company, you’ll at least be able to figure out what it would cost you if you went ahead and produced it yourself.
Another, way to test your products out is what’s called a “focus group.” This where you rent a conference room at a shopping mall and bring in various groups of customers, prospects, and current users of other competitors products together and ask them a series of questions. You can also do this by contacting them individually, or in a group conference call.
You then ask the people questions, such as, why they bought the product, or if they would buy the product. Why they use it, what they use it for, and how it performs. What the customer liked least. Whether they would buy a different product or service for more or less money, to be effective, you need to formulate and ask at least 25 questions. Then, you tabulate the answers and form your conclusions.
Focus groups are an excellent way to test as long as you don’t base your final decision solely on the results. It’s critically important that you get the opinions of as many of your current customers as you can. This is why you need to keep in contact with your customers on a regular basis. Ask them, by phone, letter, or email, “How are we doing?” Specifically, “Are we fulfilling your needs and your expectations?”
If the customers you’ve contacted say, “No, I’m not satisfied,” you need to ask, “Why?” and then, “What can we do to give you more satisfaction and value?” It’s important to show your prospects and customers that you appreciate them and that you’re not just idly standing buy, but that you’re committed to understanding how you can better serve their interests and needs.
By asking your customers questions on a continuous basis, you get the benefit of bonding with them in a way your competitors can’t. It also enables you to get valuable information about competitive products and services. You can ask them, “Why do you do business with them?” What do you think about a competitor’s product or service?” What do you think about the people who work in the company?”
The answers to these questions will help you formulate ideas for new products or services that will better serve the needs of your marketplace. Once you have come up with an idea for a new product or service good relationships with your customers will make it much easier and less expensive to test.
Copyright© 2006 by Joe Love and JLM & Associates, Inc. All rights reserved worldwide.
Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and achieve total success. He is the founder and CEO of JLM & Associates, a consulting and training organization, specializing in personal and business development. Through his seminars and lectures, Joe Love addresses thousands of men and women each year, including the executives and staffs of many businesses around the world, on the subjects of leadership, achievement, goals, strategic business planning, and marketing.
Contact Joe at: joe@jlmandassociates.com
Read more articles and newsletters at: www.jlmandassociates.com
Always Test Before You Invest - To learn more about this author, visit Joe Love's Website.
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