Simple Market Testing – How to Know if you Have a Great Idea
I’ve seen many articles over the year that talk about the need for inventors to have a big “wow” factor, a compelling reason to buy and unique and valuable features. Sounds easy enough. But wait a minute. Here are four very successful inventions. If you reviewed them before they were successful – could you have predicted their success? I’m not sure I could have.
- 180Â°s ear warmers. These are the “ear-muffs” that look better than ear muffs and wrap around the back of your head.
- The Gutter Pump- Allows water down the downspout even when the gutter is full of debris.
- The Java Log – a log made of coffee grounds
- Live Target Lure – Lures that look like real bait.
No one really knows whether or not the product will sell without some market testing. As Barbara Corcoran one of the judges on Shark Tank says, “You don’t know the formula until you get out in real life and test it.” But not everyone can take a chance and spend a lot of money on prototypes and patents to see if there idea has a chance. Some of the time honored methods, such as asking family and friends or acquaintances rarely get you impartial views. I discovered, more by accident than on purpose an easy to use market research tactic that produces great results.
How the Concept Came About
I was asked to evaluate the Dish-Net which was new product that would stretch across the top of a dishwasher to prevent light weight items from turning over or even worse falling into the dishwasher’s heater core. At the same time I was asked to speak to a group of singles that ranged in age from 25 to 45 with about 40 attendees. Since the Dish-Net was patent pending I decided to combine the two activities. I was speaking for 90 minutes so I knew I had lots of time to fill, and I needed an activity that was more interactive. So I decided to give the group a selection of products that they could rank first by how likely they were to buy the product, and second to rank the product by value.
I selected the following products for the groups review:
- a dishwasher basket for small items, which was the only direct competitor I could find;
- a milk-bottle spout;
- a microwave bacon tray;
- a set of plastic storage containers;
- a lint-removing brush;
- A flexible cover that could cover any container in the microwave.
I selected the products because they were somewhat kitchen related and they ranged in price from $2.99 to $12.99 which bracketed the Dish-Net’s inventors’ suggested retail price of $7.99. At no time did I say the Dish-Net was the product I was evaluating, and only referred to it as one of the products we were evaluating. Since the Dish-Net was not in production I showed people a picture of each product
Since the point of the group I presented to was having people interact I had the people get in groups of five to discuss the products and how they would rate the products. The group actually had a great time discussing the merits of each product and how they would rank the products. After discussion the individuals each filled out their own survey forms. I was reluctant to have people discus the products in groups but it didn’t seem to influence the decisions that much. But I have always used individuals alone for other tests I’ve run.
All in all it was a great experience. The group had a great time, I had 40 surveys and everyone was happy.
Interpreting the Results
The survey results were of course all over the board. That was to be expected. Initially I had thought that the product would be a winner if 25% of the people ranked the Dish-Net first or second on their priority list. But I wasn’t sure. All the other products were on the market so they had enough acceptance to be marketable. One of the products, the flexible microwave cover has gone to be a big selling product. The other products vary in popularity but they are all still on the market.
While there were many outliers in the survey the results I did pull out were:
Percentage of people who ranked the product in the top two:
Microwave container cover 62%
Dishwasher basket 25%
Milk-bottle spout 12%
Microwave bacon tray 32%
Set of storage containers 28%
Lint-removing brush 14%
Though not part of the survey, I did listen on the groups. People who liked the Dish-Net over the dishwasher basket felt that it could protect more items than the basket. Those that preferred basket felt it was sturdier and would last longer. I read the overall result as somewhat lukewarm, the product was equivalent to other products with a small market presences but was not going to be a runaway success.
Consolidating the rankings of value the results were somewhat as expected. The value and actual suggested retail price were
Suggested Retail Price
Microwave container cover $ 9.99
Microwavable bacon tray $ 14.99
Set of plastic containers $ 6.99
Dishwasher basket $ 8.99
Dish-Net $ 7.99
Lint brush $ 4.99
Milk bottle spout $ 2.99
Since marketers need to be careful to price their products for people who will actually buy the product, I also evaluated the value ratings of people who placed the Dish-Net in as one of their top two products to buy. The list was very similar except that the Dish-Net moved ahead of the set of plastic containers
I’ve used this model on other consumer and industrial products, often with just one person at a time. I use a variety of products and never ask what people think of the product I’m evaluating. But I will ask follow-up questions such as why did you prefer product A over product B. But having people choose from a list is important.
I’ve found it is more effective to not just list competitive products, but also other products for use in the same general area (such as in the kitchen or housewares) to see just how important it is for people to buy that type of product. For example, the study of the Dish-Net showed that having a device to protect light plastic items in a dishwasher was at least somewhat important to the people in the testing group. But if the product scored much lower, like the milk bottle spout, you could conclude this wasn’t an important purchase to most people.
The key is selecting the list of products that bracket your product in price, but also from a variety of product categories that have a different levels of market acceptance. For example the dishwasher basket has a much lower level of market acceptance than the microwave container cover and a higher market acceptance that the milk-bottle spout. That technique allows you to get a better reading on what type of market acceptance your product might have.