Whether you’re already running a successful business or you’ve just started dreaming about running your own company, every entrepreneur shares something in common: It falls to them and their team to develop new products that attract customers and keep the business afloat.
Of course, anyone who’s ever tried to start a business knows that doing so is easier said than done. That’s why it’s so important to validate product ideas before sending them to market: It allows you to confirm your assumptions about the kinds of products people will pay for before sinking a ton of money and energy into developing a new product. As an added bonus, the process of validating your ideas can help you refine your understanding of your audience, market, and unique value proposition.
So how do you go about identifying a great product idea? Start by asking yourself the following questions.
Collect and act on NPS-powered customer feedback in real time to deliver amazing customer experiences at every brand touchpoint. By closing the customer feedback loop with NPS, you will grow revenue, retain more customers, and evolve your business in the process. Try it free.
What problem are you trying to solve?
This questions speaks to the heart of every potential product: If it isn’t solving some kind of problem—in other words, if it’s not providing value to customers—then no one is going to have a reason to buy it. Thus, new product idea generation begins with identifying a problem that your existing or target demographic would benefit from having solved. Here are a few examples:
- For the health-conscious community, nutritional labeling in restaurants solves the problem of going out to eat without wrecking their diets
- For the weightlifting community, lifting straps solve the problem of wanting to squeeze in a few more heavy lifts when grip strength is fading
- For the startup community, nootropics solve the problem of being able to focus on coding for extended periods of time
The key here is that these need to be pressing frustrations or problems. If it would be “nice” but relatively inessential for the problem to be fixed, people aren’t going to have a reason to shell out money for it. Which brings us to the next point.
What is the demand for a solution to this problem?
Once you’ve verified that your potential product would solve a legitimate problem, it’s time to determine whether your customers actually care about having this problem solved. You can do this with a number of tactics, including reviewing industry reports, Google Trends, social chatter, keyword analysis, and so on. Many companies also choose to use crowdfunding or test landing pages and Adwords campaigns as methods for testing product demand.
Before you get into these fancier tactics, one of the most effective options is to simply survey your existing customer base (presuming you have one, of course). Start by asking them the following questions:
- Is this a problem they experience regularly?
- How pressing is this problem?
- What is their current strategy for addressing this problem?
- Would they be willing to pay for a more effective solution to this problem?
- If they wouldn’t be willing to pay for a more effective solution, why not?
If the problem is truly pressing and there is a strong desire for a more effective solution to the problem among your target base, that’s a good sign you’re onto something. If people are lukewarm about their interest in paying for a solution, it’s probably time to go back to the drawing board.
Does a similar solution (product) already exist?
Most ideas aren’t entirely original, but are instead derived from or inspired by existing products. There’s nothing inherently wrong with this—in fact, you can use it to your advantage. Research your idea to see if it or something similar is already being done. If it is, take the time to investigate your competitors. Pay attention to their site traffic, referrals, social following, customer volume, growth rate, size, funding sources, and so on.
If your competitors are doing well, that’s a good sign there is verified demand for the type of product you’ve dreamed up. Identifying competitors also provides you with another advantage: It gives you an opportunity to improve on their existing products and potentially even attract some of their customers.
Do you have the budget and marketing tactics to successfully develop this idea?
It’s easy to overlook this question in the excitement over a new idea. But if you don’t have the financial resources to manufacture and distribute both a prototype and a final product—or the ability to obtain said financial resources—then even the most amazing product idea simply isn’t viable until you have the resources to make it happen (and nor is it of any use to your customers). In a similar vein, it’s important to consider whether the product aligns with your existing marketing strategies. You can have the best product in the world—but if you don’t have the wherewithal to put it in front of potential customers, it won’t do them any good.
The preceding questions constitute the foundation on which every new product idea should be built. If you can prove that your product solves a legitimate pain point, is in demand by customers, provides additional value beyond its competition, and meshes with your company’s budget and marketing strategies, then you’re well on your way to developing a product that truly appeals to your customers.