One Strategy the Best Entrepreneurs Use to Make Product Decisions

One Strategy the Best Entrepreneurs Use to Make Product Decisions

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CREDIT: Getty Images

 

 

4 steps that can help you test and validate your product idea, while gaining your first 50 customers, without spending any money on advertising

 

You’ve probably heard advice that you should test to see how the market responds to your idea before launching a product so you don’t build something no one wants.

Usually, the popular way to validate demand is by running different variants of advertising copy on Google Ads, which can also help you see which messages the market best responds to. However, there’s a much better way to get even more detailed qualitative feedback without spending a cent on your advertising budget. Dozens of the fastest growing Silicon Valley startups have used this little-known growth strategy to rapidly iterate on their ideas to quickly build products that customers have instantly loved.

Even with all the new technology out there, the single best way to know whether your product will be the next big thing or just an expensive flop is by having conversations with your potential customers.

The easiest way to start a conversation with a highly targeted prospect is with a personalized cold email that offers something that can solve their most pressing business problems.

Let me walk you through how you can use cold email to test your business ideas in 4 simple steps:

1. Who Do You Want To Sell To?

Whether you’re selling cutting-edge software or mouth-watering food, you need to know who you potential customers are and what their preferences are.

What are their most painful problems, and how can you add the most value to them?

These are important questions to ask yourself (and your customers) when deciding what you should sell and how you should position yourself in that industry.

2. Align Your Messaging With Your Customers’ Needs

Once you know who you’re selling to and what they care about, you can start thinking about how you should positioning your offerings.

Every business idea has a story behind it. But if you want to create a compelling message, you must align your product’s pitch with benefits that customers will actually care about enough to spend money on.

Resist the temptation to talk too much about yourself and your company or “how cool” your product is. Instead, your message should address customers’ pain points with valuable solutions that are hard for them to resist.

3. Use Cold Email To Generate Sales Conversations

Once you’ve figured out how to craft compelling messages around each of your value propositions in relationship to your customers’ existing problems, you’re ready to start crafting your cold emails.

A simple way to test to see which product you should build or which benefits and features you should focus on selling is by creating separate email campaigns or “email variants.” In other words, for every different product or feature you would like to test selling, you should create a different email or sequence of emails that you will send out.

In order to be scientifically and statistically accurate, it’s important to make sure you have a big enough sample size to send to. If you’re testing 3 product ideas, you’ll need to have a list that’s big enough to be divided into 3 separate groups. (Note: You need to divide your list using a “random variable” rather than alphabetically, or you will have bias that can ruin your experiment.)

If I was going to test 2 products, I would probably send to at least 250 contacts so that I have over 100 contacts in each group to ensure I have more than enough data for statistical significance. You could send more volume than that if you like, so long as you’re careful about email deliverability issues, but you don’t have to.

The cool thing about this approach is that it also helps you generate conversations with real prospective customers, which helps you get fast traction on your product idea before you even launch it. You can even pre-sell customers before you even finish building.

I’ve seen and helped dozens of successful startups from Y-Combinator and 500 Startups validate their product and get their first few dozen customers, along with Fortune 100 companies that were testing new ideas before committing resources for developing new product lines.

4. Review The Results And Keep Improving

There’s no point of testing if you don’t make time to analyze your results and see how you can improve.

You can gather some information by looking at open and response rates from your different email tests, but you need to be careful about getting misled by “vanity metrics” that may give you false positives or negatives. It’s much more accurate to look at things like positive response rates, sales appointments set, and even deals closed.

The beauty of using cold emails for product validation is that you can also do a thorough qualitative analysis where you look at the actual responses you got from your cold emails. While positive responses always make you feel good, objections can also help you understand your customers’ needs and concerns much better. And of course, you’ll also gain rich insights from the conversations you and your salespeople have.

If you want more explanations and tips on how to set up email campaigns like this, you can check out our cold email guides.

[Inc]

August 5, 2016 / by / in , , ,

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