Understanding Market Fit: A Crucial Aspect of Product/Market Success
Many companies manage to initially gain some customers and then assume they’ve achieved product/market fit, only to find their growth stagnating. The challenge often lies in insufficient attention to market fit. Discovering a product and its market should be a parallel process.
When I refer to market fit, I’m talking about finding ‘market pull.’ This means identifying what makes a customer genuinely need or want your product enough to take immediate action, like learning more, trying it out, or making a purchase. The key is to understand what makes this behavior consistent and repeatable.
Beyond the inherent qualities of a product—its usability, feasibility, and viability—it’s crucial to explore the value it offers to truly assess market fit. This aspect, though critical, is often the most challenging and underdeveloped.
People often express a willingness to use or buy products, which can be misleading when gauging product desirability. Not all evaluation methods effectively place decisions or actions in a realistic market context.
Assessing market fit involves taking insights from discovery work and questioning how people will actually behave in real-life conditions, characterized by a crowded market, competing priorities, limited budgets, and an often satisfactory status quo.
Value discovery should go beyond simple questions like “Would you buy this?” or “How much would you pay?” It needs to delve into the motivations and market conditions that drive action and create urgency. Sometimes, this involves how a product is distributed, but it often starts with effective communication and messaging about the product.
Many companies struggle to interpret their findings and understand market implications, which is why having a product marketing partner is so vital. Skilled product marketers can add market insights to discovery work, helping to shape all aspects of a product’s go-to-market strategy.
They can identify crucial customer segments for advocacy rather than just initial usage and understand how external influences like word-of-mouth or online reviews affect customer actions more than the product trial itself.
Creating a smart go-to-market plan, along with effective positioning and messaging, relies heavily on comprehensive discovery work.
Probing Early and Often
While traditional market research adds valuable context, nothing beats live customer conversations for understanding market dynamics.
Product manager-led discovery should always address key product questions:
– Are your customers who you think they are?
– Do they really have the problems you think they have?
– How do they currently solve these problems?
– What would it take for them to switch solutions?
Market fit exploration tackles the deeper elements of perceived value, investigating the market dynamics that influence perceptions, growth drivers, and urgency.
While not exhaustive, the following questions can provide valuable market-oriented insights:
– Who is most likely to use or purchase this product?
– Do they prioritize the problem it solves?
– What alternatives are they considering?
– What aspects of your product resonate most with them?
– Regarding budget allocation for urgent problems, how much would they assign to this one?
For pricing, understanding how much customers expect to pay—along with comparisons to recent purchases—can be informative. Similarly, asking about the most recent product they bought and why can reveal purchasing motivations.
In terms of growth and connection, learning what initially sparked curiosity, how they’d describe the product to a colleague, where they expect to find discussions about it, and what would make them a passionate advocate are crucial. Also, explore whether subsequent market segments share a similar urgency and what market conditions would prompt them to act.
Various discovery techniques can be adapted to probe market-fit dynamics:
– Exit surveys: For users who leave a website quickly, a pop-up question asking for feedback can provide quick insights.
– A/B messaging tests: Evaluate different product descriptions or texts on websites to see which perform better and what that says about market perception.
– Demand tests: Using a landing page to discern curious visitors from those ready to take action can clarify actual interest.
– Ad testing: Different messaging directions, such as aspirational or problem-focused messages, can reveal what drives engagement.
– Sentiment probes: Measure initial sentiment, show a product video, and then reassess sentiment to see if there’s a shift and why.
– Usability test variations: Including key competitor sites in testing helps understand the complete customer journey.
It’s important to creatively engage with customers to truly grasp market fit. This is where significant insights often emerge, impacting product strategy.
This article is adapted from “LOVED: How to Rethink Marketing for Tech Products,” which explores these techniques in greater depth.
Author: Martina Lauchengco