We’ve already covered analysing your market to understand if there is enough scope for you to develop your idea, make it a long term sustainable business and be profitable enough to give you the lifestyle you’re looking for. But how do you actually validate your idea, once you have passed the market validation checkpoint?
In this article, we’ll be discussing two straight-forward methods you can use as a budding business owner or early stage business owner – because let’s face it, most of us miss this part out right and just dive straight in!
So, validating your idea – why is it so important? Well, you’ll be putting hours and hours into this project and unlike Kevin Costner is Field of Dreams “if you build it, they will come” we want to have the best chance of our fledgling business to become strong. Building something to see if people will buy, just isn’t going to work any longer (and it’ll save you hundreds of hours of stress and late nights!).
Our first method is – engage with your audience and run some basic validation tests. Once you have a good idea of who your customer is – you need to now go and have introductory conversations with them. Remember, you are not selling your product or service at this stage, but you are looking to understand areas such as:
their buying habits or triggers
who they buy from currently
why they buy from that provider
any pains or irritations they feel when buying the product or service
what they are looking for when buying (pain relievers)
Face to face interviews are considered the best form of data capture for a number of reasons including, you can view their body language, you can more clearly hear the tone of their voice, you can ask follow up questions and you can get an all-round better understanding of how your potential customer reacts to questions posed.
Using the telephone is probably the next best alternative, however, bear in mind that you won’t be able to notice any body language occurring, so really listen to the responses and how they are being phrased. Video calling someone would be a great middle-ground alternative as the technology is suitable sufficient to allow this easily.
Still within this section are surveys. There are multiple providers of surveys including SurveyMonkey.com, freeonlinesurveys.com or Google Forms. Whichever provider you choose, you’re trying to convince, someone you don’t know, to engage in a survey – so you may wish to think about creative ways you can achieve that!
Take a look at this video to help you understand why it’s best not to ask friends or family – try to get impartial information, real information that will help you determine whether your business idea has a future.
When surveying people that have closely matched characteristics to your intended audience, the more information you can gather, the better. Asking 5 people is unlikely to get you the depth of information you need in order to effectively develop an appreciation of whether your idea is strong enough.
We would aim for a minimum of 50 people to survey in order to develop a strong enough data set for which to analyse.
The second method to consider is – develop a landing page. You can start with a simple landing page. It’s a lot less time to build a simple landing page than creating a whole business around a set of assumptions.
Before you start building a landing page, translate the features of your product into customer’s benefits. Using these benefits, you can quickly begin articulating a really compelling offer.
Be sure that your landing page will have:
Your total offer with short descriptions of customer’s benefits;
Order form, subscription form or phone number that visitors can use to take the first action on a page – be clear on your call to action.
Your goal is to measure and check if there is enough interest in the problem for your customers. The best way to measure the interest will be the conversion rates.
You can calculate the conversion rates by the following formula:
Conversion rate = The total number of visitors / The number of visitors that take the action
For example, if you have generated 1000 visitors to your landing page, and 50 of them ordered your product or subscribed to your list to receive the information when they can buy the product, or call you on the phone, your conversion rate will be 50/1000 = 0.05 or 5%.
If your conversion rates don’t pass the process, you will need to go back and improve the offer.
Mailchimp.com offers a landing page solution on their free plan – so if you already have a free account, you can simply use Mailchimp to validate your idea. If you don’t have an account, it is pretty simple to set one up – and we would recommend you do so as you will more than likely be using Mailchimp as a tool to capture emails and then re-market in the future.