How minimal can your Minimal Viable Product be? You may think that you need to create a completely functional product before you can get feedback, but you can launch faster than you think.
Large corporations will usually hire a research firm to do a focus group when products are in the early stage of development. But that’s not always the best way, because people in focus groups often will say what they think the group leader wants to hear. According to Tim Ferris, author of The Four Hour Workweek:
Ask ten people if they would buy your product. Then tell those people who said “yes” that you have ten units in your car and ask them to buy. The initial positive responses, given by people who want to be liked and aim to please, become polite refusals as soon as real money is at stake.
So the best test is to try and actually sell your product. Therefore you should instead aim for creating a Minimum Sell-able Product.
But you can also test your product before it even exists, when it is nothing more than an idea, using free tools and a small budget for test ads.
Step 1: Create a Product Website
To test your product before it exists you build the website for it first. There are many sites that let you create a free website, including WordPress.com, Wix, and Web Business Sites.
Your website could be a single page with your elevator pitch, or you could create a multi-page site that will help you determine what features your potential customers are most interested in and which benefits they find most attractive.
Step 2: Add Analytics
Website analytics will tell you how many visitors you have and where they come from:
- Direct link
- Search engine
- Ad campaign
This is especially useful if you create the multi-page site with each page dedicated to a different feature or benefit. By seeing what pages get the most traffic you can adjust your product and pitch for greater success.
Some sites like WordPress.com provide you with free statistics. Google Analytics is also free and provides some of the best insights about your traffic, but it does require technical administrative access to your site that most free websites don’t give you. Web Business Sites does let you set analytics up for free because it includes the plugin Google Analytics Dashboard for WP. Google includes great documentation on how to use their analytics platform and can also look at these books:
- Google Analytics: Understanding Visitor Behavior
- Google Analytics Breakthrough: From Zero to Business Impact
Analytics will let you track your visitor’s journey through your site. You’ll know how many people hit your landing page, what percentage click your links to learn more, how long they spend on the site, and how many come back later.
Step 3: Call to Action
Here’s where you find out if your if your product idea is truly viable; you ask your website visitors to commit. If you don’t have a product to sell yet, you at least want to collect their email addresses. People are very leery of being spammed so providing an email address can be as much of a commitment as paying money.
If you have an email entry form that says, “Sign up for updates about this product,” or “Please provide your email to be notified when this is available,” then you know that anyone who actually gives you their email is really interested in what you are offering. If you have a WordPress site then you can use a plugin to create a contact form on each page and be able to track from which page people signed up.
You may also choose to offer people an ethical bribe in exchange for their email. If you have something free you can give that’s related to your product then people will be more willing to provide their email. You can also offer a discount when your product is available. Or even say that the first 100 or so people to sign up will get the product free when it is ready.
Step 4: Start Your Ad Campaign
It would be nice if you could throw up a website and then have thousands of people flock to it immediately. But, unfortunately, if you build it they won’t come because no one but you will know that it exists. You can use SEO to drive traffic, but that takes time and most of it is not under your control. But for as little as a few pennies per click you can buy traffic to determine your product’s viability.
|Google AdWords is the best platform for MVP testing ads since it is the most popular search engine and your ads appear right in the search results. You can buy key words so that when people enter specific search terms your ads will appear. This will not only drive traffic to your site but also tell you what search terms are most effective so that you can pick the best key words to optimize for SEO.|
Best of all, you buy the ads on a pay-per-click basis so it only costs when someone visits your site.
You should do more than one Ad campaign so that you can test multiple variables:
- Search Terms
- Ad Headline
- Ad Text
- Ad landing page
Of course the more you try to more it will cost, but you should do as much tweaking as you can afford to find the best combination to attract customers. It will save you money in the long run because when you are ready to go live selling your actual product you’ll have a great head start.
Step 5: Evaluate the Results
After you’ve spent your limited ad budget driving traffic to your MVP website it’s time to evaluate whether there is enough market interest to go forward with your product or if you need to reevaluate and pivot.
Start with your Google Ads account page and the data that it provides to see what keywords and ads drove the most traffic to your landing pages and how much did that traffic cost.
Next, look at the Analytic data to see what people did once they got to your site.
- What percentage clicked on the supplemental information page links to learn more about your product?
- What percentage took action and signed up on your email list through the contact forms?
- How much was the cost of the ads for each signup?
If the cost per action is less than the estimated gross profit from your product then it is probably a viable business.
For example, lets say you spend $100 on ads at an average of 10 cents per click-through for 1,000 visitors to your landing pages. Then you get 100 people who click through your landing page to your call-to-action page. And 10 people actually signup on the contact form, providing you their email address. That means you spent $10 per lead.
Now suppose your product costs you $20 to produce and deliver and you plan to sell it for $40. You’d be paying $10 to make $20 in profit. That would be great. But what if your profit is only $5?. You’d be spending $10 to make $5, which is not so good. Time to go back to the drawing board.
One thing to keep in mind is that you will probably be more successful when you have your product ready to sell and deliver. Many of the people who get to your email signup form would buy an actual product, but not give their email address to get notified when it’s available. They’d rather just come back on their own than when you have something to sell. So if this test run shows your product is even close to being viable in terms of customer acquisition cost verses profit then you are in good shape. You have data to help refine your pitch as you complete development of your product.
That’s how you can test your great product idea before it even exists.