How To Measure Buyer Intent If You Hate Wasting Money
Forget what you've learned about market research.
Product-market fit and the old ways of idea validation are as relevant now as a kissing booth during a pandemic.
I would have saved hundreds of hours--and thousands of dollars--had I known about a better way to validate buyer interest.
I've noticed, often the hard way with both my primary manufacturing business and my best side hustles, that many companies, course creators, and authors launch things without much market validation. And I've also learned the hard way that there is a huge difference between
"People telling you that you have a great idea/product/service."
VS.
"People willing to part with their money in order to buy it from you."
Those of us that have been attempting market validation research have been doing it with inadequate tools and methods, leaving us with head-scratching (and disappointing) results.
CBInsights did a post-mortem on 111 failed startups and found that "no market need" was the second biggest reason for failure.
It's an issue that I've had personal experience within my own entrepreneurial journey, so I know how frustrating this discovery process can feel.
My partners and I own a manufacturing company that makes height-adjustable workstations. A few years ago, we spun off a software company that solved a specific facility challenge a large client was having.
We invested in developing the software solution and the client told us they loved it. They were impressed by the software and us. We thought we were on our way to glory.
Then something changed within the client's priorities which made this big challenge moot.
They no longer needed our "impressive" software solution. So we went to work pivoting. Since then, we've had several people tell us that they love how we've evolved the solutions we can offer.
But the funny thing is, these "advocates" for our software just can't seem to help us turn their companies into paying customers. This software spinoff business of ours continues to seek its first paying client.
Thank goodness for multiple streams of income.
That's why I'm grateful and excited to have learned about a company dead-set on giving makers of all kinds a way to more accurately validate whether their product or service is worth their time and financial investment.
Imagine having data you can feel confident about when deciding to bring your idea to The People.
Imagine having a waiting list of people who have placed a deposit on your forthcoming product or service.
That's real validation. And that's what's been missing from our lives.
Enter Prelaunch.com
Welcome to 2022 and beyond. Prelaunch validates your idea by finding real people who are willing to make a financial reservation to buy your "thing." It will save creators thousands of dollars of time and expense building something that not enough people are willing to pay for.
Even better, your "offering page" will receive feedback from potential buyers so you can make adjustments. It's not an all-or-nothing vote necessarily. You may be able to make small pivots or adjustments based on interested buyer feedback before you formally launch.
Screenshots from the PomaBrush offering on Prelaunch.com
For example, PomaBrush, a minimalist silicone electric toothbrush, set up its offering page with high-quality product images and copy that you would expect to see on a good landing page.
To build up traffic to a company landing page, you would expect to invest in SEO strategies, blog articles, social media management, and even ads to drive traffic to it.
Or, you could leverage the platform Prelaunch provides. Much like the value of going to Amazon, where buyers can go and search for what they want, and buy multiple products from different categories, shoppers can go to Prelaunch.com to do the same.
The seller benefits from:
increased traffic
analytics and benchmarks for guidance
tools to help learn directly from customers
The shopper benefits from:
the convenience of finding new and innovative products in one place
no risk – cancel for a refund at any time
the personal reward of being on the cutting edge
PomaBrush used its offering page to explain the company's intent: to create a product that is the best in the world at one thing that humans need, a toothbrush that brushes teeth 10x better than anything else to prevent long-term dental issues and costly dental care.
When it was in Prelaunch, it was listed for $149, but if you placed a deposit reservation, your price would be $89 on launch day.
The offering page gives the buyer a chance to reserve a spot on the product launch pre-sale list.
First, the buyer is prompted to enter an email address to get a substantial discount on launch day.
Once you submit the email address the next page served up is the reservation page. Here's where the real buyer validation comes in. To reserve your price, you enter your credit card into the platform's Stripe point-of-sale system.
The deposit for the reservation is not the price you'll pay on launch day. It is a small deposit. For example, for the PomaBrush, here's how the numbers played out:
Full price: $149
Reservation Discount: 40% off
Launch Day Deal: $89
Refundable Deposit: $10
Market Validation Feedback
Along the way, the seller receives feedback on page visitors received, including whether that number of visits has reached statistical reliability.
Prelaunch measures "concept validation" by showing the seller how many subscriptions have been collected (total number) and what percentage of page visitors subscribe.
A "subscription" is created when someone submits their email address to be notified of product updates but does not take out their credit card and pay for a reservation.
To measure "price validation" Prelaunch shows the seller what percentage (and actual number) of page visitors convert into a reservation deposit.
If the price validation meter is low, Prelaunch gives the seller suggestions to improve the results. For example, in the below image, a product had an above-average concept validation (subscription rate) but a low reservation conversion percentage.
That means the product had good buyer interest, with people submitting their email addresses so that they could be kept in the loop on updates, but they weren't submitting their credit cards to make a deposit or reservation. So Prelaunch recommended lowering the price by 25% to see if that would remedy the issue.Thanks to this real-time feedback, the seller can see:
Are people interested in the product?
What will they pay for it?
This is a more robust market demand test that helps define pricing strategy before the maker takes on excessive expenses developing something untested. And having Prelaunch compare your product to industry averages gives you even more clarity that you may not be able to grasp when doing this on your own.
Oh, and how did PomaBrush perform?
PREDICTION: Prelaunch predicted $800,000 USD sales for six months, with a 3.5x Return On Ad Spend, and suggested an inventory of 20,000 units.
REALITY: It went on to achieve over $700,000 USD in sales at the crowdfunding stage, and is now a successful company. And they did this within three months.
Pretty spot on.
Prelaunch is the first-ever market validation tool to measure real buying intent through a seamless landing page designed with genuine e-commerce logic. The data and insights gleaned from the process create possibly the most accurate product-price validation known to date.
Is this another crowdfunding platform?
No, but Prelaunch can be used along with a crowdfunding platform.
Here are the differences:
Kickstarter, Indiegogo and other crowdfunding platforms are designed to do a presale for products already in development. People use these platforms to collect pre-orders.
Prelaunch's proprietary technology however analyzes consumer behavior and product potential on the offering and reservation pages.
These pages are designed to:
attract targeted traffic
measure how many people want the product
notify people that the product is not yet available
measure how many people want to join the waitlist
measure the percentage (and total number) of people who are willing to pay to reserve the product
compare all of the above metrics to market averages
So Prelaunch's simple-looking pages are doing a lot of work behind the pixels.
Many companies use crowdfunding platforms to launch sales. But many of these products arrive on these platforms without much market validation of buyer intent. Certainly not with the rigor that Prelaunch has created.
As result, we've seen products on the crowdfunding platforms prove that they weren't quite market-ready. Production and design issues show up, and for some companies, this has resulted in a poor reputation before they've even hit the market formally.
So Prelaunch complements the crowdfunding platform. It helps to strengthen the product offering before it arrives on the crowdfunding platform stage. Prelaunch gives you more insight on your product's demand and price before you take it to Kickstarter, Indiegogo, or even Amazon or Shopify.
The platform enables creators to figure out whether their idea fits an existing market and solves a user’s problem before investing heavily in its development. The game-like control you now have to manipulate your launch price to test market response, plus compare it to industry averages, ushers in an era of more successful launches.
Does Prelaunch only work for physical products?
So far, physical products have been the main focus for Prelaunch. I convinced them to let me run an experiment with a membership community I'm hosting called Side Hustle City.
It took me about 2 hours to build my offering and reservation pages. The site builder was simple and intuitive. In fact, I wish more website builders were that easy.
We're going to see if people will go to Prelaunch's marketplace seeking a community that helps side hustlers grow their businesses. The process is the same. My offering page describes the design and use-cases of the community, tests whether people will sign up to learn more, and measure the reservations collected based on the discounted membership price available only on Prelaunch.
The header from my Prelaunch offering page for Side Hustle City, a community for side hustlers
Once we have results, I'll bring you an update. From my experience going through the process, I don't see any reason why a non-physical product couldn't work the same way. Perhaps my community offering won't work, we'll see. But the process Prelaunch has created here should work for services and software as far as I can tell from my firsthand experience.
If you’re interested in signing up with Prelaunch to validate your products, they’ve offered my readers a 15% discount if you use promo code BRIAN15. Use this affiliate link to claim your discount.
For now, there is no charge for hosting one product offering page. If you want to test a second product, there will be a fee and that’s when you’ll want to have your BRIAN15 promo code handy.
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