Market validation is a series of interviews of people in your target market. These interviews are used to test a product concept against a potential target market. The following are the advantages of performing market validation:
An assessment as to whether a target audience is appropriate for your product
A test for your positioning
A way to generate new ideas for positioning
A test to see if your product provides real value for the target market
A way to learn new value statements
A deeper understanding of your target market
An better understanding of your target market's purchase behavior
A market validation should always be done before introducing a product. But ideally, market validation should start much earlier in the process. A better understanding of the target market will help build a better, more focused product. A market validation will take a minimum of four weeks, and more likely take six to eight weeks depending upon the number of interviews and the number of people performing the interviews.
Pick one objective for your market validation. Either verify the target market, or verify the positioning and value statements. Trying to do both of these in a single market validation will create too many variables and weaken the value of the market validation. Write down your objective and make sure everyone involved agrees on the objective before proceeding.
Before starting a market validation you must identify your target market. It is possible to do a market validation with multiple target markets, but it makes little sense to do a market validation with long list of target markets. Narrow down the target market to a manageable number of one if you are testing positioning and 2 or 3 if you are testing the target market.
Define, as best you can, the target market. Write down the answers to the following questions:
What types of companies do they work for?
What is their job title?
What problems do they have and how will your product make their lives better?
How can you find them?
Be sure to go through a positioning exercise to narrow down your target market and positioning before launching your market validation.
Market validations can be done with as few as three or four interviews, but are more valid using a larger data set. If you are testing a consumer product, you may want hundreds of interviews. If you are testing a business-to-business product, you can often get a good market validation out of 20-30 interviews. Pick the number of interviews that you want and multiply it by three to get the number of contacts you will need.
You can find people to interview in your target audience through a number of methods including the following:
Cold calling. The most direct method is cold-calling into companies. Ask for the person with the appropriate title and tell them that you are seeking their advice on a new product. People are more likely to talk to you if you are seeking their advice than they will be if you are trying to sell them a product.
Advertising. On-line advertising is the fast and very targeted. To find the right audience through use advertising in an electronic publication that goes to your target market. You will need an incentive for people to sign up for the interview. You can use a small gift or a drawing for a larger prize. You will want to send them to a website with some qualifying questions on it.
Email. You can rent email lists or use viral marketing to get to the right audience. If you already know a handful of people well enough to send them an email. You might want to try to get people to sign up by passing on an email. They will need an incentive for passing on the email as well as for signing up. Again, it is probably best to direct them to a website where you can ask some qualifying questions.
Be sure to let your interviewees know when you plan on conducting the interviews. Also set up appointments as soon as possible because any appointments will end up being rescheduled. Lastly, be sure to let them know how much of their time it will take.
It is ideal to do some number of the interviews in person. You will always get more information from someone who is sitting in front of you than you will get over the phone. I don't recommend doing the interviews via a web survey. The type of information that you are trying to get is too subtle and subjective for multiple choice answers.
The most important part of the market validation is the questions that you ask and how you ask them. Unlike a scientific survey, you are trying to understand the emotions of your target market. You will want to ask open-ended questions that get them to talking about how and why they do things and what will make them buy your product. Whether you are trying to validate your target market or your positioning, a fundamental question that you should always ask is, "What keeps you up at night?" This one question will tell you where the priorities are for this person at this point in time. The answer may have nothing to do with your product, but it will tell you where their priorities will be when considering any product or service.
Beyond the basic first question, you will need to construct questions that allow you to try out your product positioning and/or target market. Here are some example questions:
Are you familiar with [product/space]?
Use your positioning statement, then ask, "Do you see value in this [product/service] for your organization?"
Are you planning to invest in this [product/service] this year? Next year?
Who is responsible in your organization for implementing products or services in this space?
You will want to have many questions that are specific to your product including questions about their environment (which will tell you how easy it will be to add your product to their environment), cultural issues (which will tell you how easy it will be to adopt your product), and budgeting (which will tell you if people actually have the money to buy your product).
The more time you ask from people the fewer you will get to sign up for your interview, so it is best to keep the questions to a minimum. Fifteen minutes is an optimum time for scheduling the interviews, but it is difficult to gain any real depth in 15 minutes. Twenty to thirty minutes is probably a more realistic time. If you are asking people for an hour or more, you are going to need a significant incentive to get them to take that much time with you.
It is important to test the question set. I have never had it completely right the first time. Also the first couple interviews will probably make you realize that there is other information that you want to gather. Run three to five test interviews, then review your questions and make sure that you are getting the results that you want from the questions. The following are some things to consider during this review:
Are the questions open-ended enough to start a dialog?
Is this the right target market?
How long are the interviews taking?
Are some questions unnecessary?
Have I uncovered something in these interviews that I need to ask some more detail about?
Which questions were misunderstood and how can they be reworded?
Ideally you, as the product marketing manager, should be conducting the interviews. Since you have the most intimate knowledge of the product and the market, you we gain the most from talking to the interviewees. However, this may not be possible for a product that will require a large number of interviews. You should certainly be involved in the first few interviews to understand if the right questions are being asked. If you can't conduct the interviews yourself, try to sit in on some of them.
Analyzing the data is where it gets interesting. I once had an outside firm do a market validation for me. They brought in their conclusions to present, but I wanted a deeper knowledge of the data, so I read all the interview notes. My conclusions were completely different than the market research firm. Since I had a better understanding of the target market and the product set, I was able to read things differently. If you use an outside firm, be sure to take an active role in analyzing the data yourself.
It is a good idea to create a high-level summary for management that includes key findings and suggested changes in product positioning, value statement, and target market.