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Determining a Product's Need / Marcomm Method

We've got an idea for a product in a vertical market. We want to determine if it's a good idea.

So, we've contacted over 200 different people (via e-mail) in this market to get their opinion on the idea to determine if it's something we should build. We took the time to craft individual e-mails to these people in a 2 e-mail process:

First e-mail:
- Who we are (don't have anything to sell). Include our contact info (phone).
- Who they are (so they know it's a custom e-mail)
- Why we contacted them (you work at X, you've done Y)
- We ask if they wouldn't mind sharing their professional opinion on a product idea (this keeps the initial e-mail short/genuine).

I've noticed we received a larger than expected response utilizing this technique instead of simply spamming the idea. We started last Friday; response rate is over 50% with responses still coming in.

So, if they indicate they do not mind, the second e-mail basically is:
- Thanks for you response. Here's the idea. Please, share your opinion.

Response rate from this second e-mail is then approximately 30-40%.

So, from our intial 200 requests ... we have about 30-40 answers (and it hasn't been a week yet).

My Questions:
- We're only dealing with 30 or 40 actual responses. This, clearly, isn't enough to determine if we should invest in the idea. Should we work on determining feasability even further?
- What should we make of the ones who didn't respond?

Ideally, we likely should've crafted a web page where they could've simply clicked "YES/NO" w/ the option to include more info ... I'm sure this would've improved the response rate?


Thursday, August 12, 2004

I would say that was a sufficent response. Build it.

Mr Jack
Thursday, August 12, 2004

You could always bootstrap the project by teaming with a few of the more enthusiastic reponses (the "Yes! I need this!" people) and convince them to buy the product for a reduced price in advance.

This way they get a real product at a discount that meets their needs.  And you get working capital for a 1.0 release (and you can say that you already have customers - people don't like to be first).

Thursday, August 12, 2004

Oh, btw, from the 30-40 responses ... the current count is:

52% - Good Idea. I would implement.
28% - Neutral. "Good Idea; depends on cost/setup/other"
20% - Negative. "Not interested in Product"

Thursday, August 12, 2004

52% of respondees favourable sounds quite good to me. And you've got a reasonable sample size. You don't need huge variation, because it's a narrow vertical market.

Andrew Cherry
Thursday, August 12, 2004

Sounds good, go for it.

If you don't mind me asking, how did you determine the initial 200 contacts ? Was it just people you had already dealt with ?

Over 50% positive response is fantastic, especially if you can convince any of them to become early-adopters/sponsors/evangelists as suggested above.

Thursday, August 12, 2004

"If you don't mind me asking, how did you determine the initial 200 contacts ? Was it just people you had already dealt with ?"
- People we know (one who's in the domain). Using his domain's credentials, we combed a professional organizations' message forums specific to our vertical market. From this, we gathered potential contacts and _other_ associations for which to combed. It took quite some time to compile and was all manual. We just drew the line at 200 since "our fingers were tired."

"Over 50% positive response is fantastic, especially if you can convince any of them to become early-adopters/sponsors/evangelists as suggested above."
- Currently, 2 of the sites have outright volunteered to test the solution. 1 of the sites is 'quite' a large deal and, if satisfied to glee, would likely serve as an ultimate triumph for such a startup.

Thanks, we're excited and scared to death at the same time.

Thursday, August 12, 2004

This is exactly how market research should be done.  Very well targeted, identifying needs, good feedback.

Well done.  I'd say to go for it at this point.  You already know who your first customers will be.

Aaron F Stanton
Thursday, August 12, 2004

To rain on your parade a little (and I'm not trolling here, I just want to share what I've seen from my own experience), it's one thing to have people, even well-targeted prospects, say it's a good product or great idea, but it's quite another to actually get them to buy it.

I know b/c I experienced the same thing a few years ago: our clients told us "it would be great if you could develop X to do Y".

So we build X, which did Y wonderfully, spending 10 months in the process.

When we went back to them with X, only one firm actually bought it -- I think, quite cynically now, that of all those people telling us it was a great idea, none of them suspected we would actually do it.

Your situation may be different, and I wish you the best of luck, but just make sure you're aware of that.

anonymous financial IT guy
Thursday, August 12, 2004

Isn't that sort of thing a spam?

Btw, my own experience says that you should consider it as 5-10% said yes. :-)

Humpty Dumpty
Thursday, August 12, 2004

No, it's not spam. Spam would be if he sent out 10,000 emails that weren't personalized.

Yes there is a risk here, but he's done his homework and it looks like it's worth taking.

Miles Archer
Thursday, August 12, 2004

anonymous financial IT guy,
You're definitely right. I mean, all I was really asking is "this a good idea; would you implement it" ... wasn't really asking "is this a profitable idea; would you buy it for enough to sustain me" ... which, I guess, is where the risk comes in.

Obviously, the research continues even after the "commit to develop" stage. ... If we start to see 100% of the people saying "uh, I just said it was a good idea. I didn't want to pay more than $20 for it" ... then, I guess we can suck it up and stop.  :)

Humpty Dumpty,
If SPAM is unsolicited e-mail ... then, yes, it's SPAM. But it took us a HELLUVA lot of time to craft 200 e-mails. I think MS Office could've e-mail merged 200 e-mails in 2 seconds. Took us 3 days (we did at least one google per contact to put "something" of substance in there).

And even after that, we still _only_ received 50%  ... of course, people aren't like us (checking e-mail every minute). Some people only check once/week (and go so far as to tell you that in e-mail; "Talk to you next Monday (e-mail day)!").

Thursday, August 12, 2004

50% is actually a phenominal result in direct marketing and it goes to show the payback in getting to know who you want to target.

Simon Lucy
Friday, August 13, 2004

Anon: "Thanks, we're excited and scared to death at the same time.".

That's how it should be. Good luck.

Friday, August 13, 2004

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