The number one cause for new venture failure is the building and launching of things that customers do not want. The second reason why many start-ups fail is that they eventually run out of money. Luckily, you can avoid both of these scenarios by ensuring that you achieve product-market fit as you start. You will have achieved product-market fit if you find yourself in a good market, selling a product that bodes well with all potential customers. A good market means not only high numbers but also high growth capabilities.
You can measure your business’ product-market fit in several ways. The chances of your not having product-market fit are high if you feel as though you have not reached this point. Some of the most common methods used to measure product-market fit are pages per visit, bounce rate, returning visitors, and time on site. Comparing the results from these tests to the industry average will tell you if you have achieved product-market fit or not. You can also choose to use surveys issued to your clients to measure product-market fit. You know you have achieved product-market fit if forty percent or more of your clients say that they would be disappointed if you run out of business. You also know you have achieved product-market fit if your net promoter score is a positive. This shows that your customers are satisfied with your products and have high chances of recommending them to their relatives and friends.
There are several indicators of a product-market fit. One sign of product-market fit is money piling on your account from the sales you make. Another indication of product-market fit is the increasing need for more customer support staff. Another indication of product-market fit is the consumption of goods as fast as they are made.
There are several ways with which a company can get product-market fit. You need to start by identifying your target consumers. To identify your target market, you need to conduct market segmentation, and classify customers with similar needs and behavior patterns together. For your product team to come up with a product that is appealing to your target customers, you have to be in a position to describe their personas, which is why market segmentation is vital. After you do this, you need to narrow down the list of needs you wish to satisfy by picking the most vital ones since one can’t meet all of them.
The next thing you need to do is look at what competitors are doing, and come up with something different so you can attract customers. Concentrate on the basic features that give your product value when starting, you will have time for improvements in the future.