Why is it Crucial to keep Calculating Product-Market Fit and How to do it?
Before releasing product updates, you need to identify the “Product-Market Fit” in your firm. I am pretty much sure you’ve heard this term before. And, it’s a fact that you can’t create an impactful or revenue-improving business without overcoming this task.
However, adverse to what you may think, processing your product-market fit is not something you just do by the way and then forget about it. To be in the top market place and progress with success, you must be “proactive” and calculate your product-market fit recurrently to ensure that you’re improving value and offering a product as per your customer needs.
But, before progressing with this idea, let’s know, what product-market fit is and why it’s important to calculate it recurrently for your product growth?
Analyze your Product- Market Fit
Your company must attain success so that you need to create a product whose value proposition fulfills the needs of a market and its potential customers.
Some surveys say you can analyze product/market fit and determine what percentage of your users think your new product update ‘will-have.’ But more often referred to, product/market fit is not about just numbers and percentages, and more about a deep and clear understanding of who your customers are, and what’s their feedback on your product.
When I ran through some research, I found“HubSpot” says: Product-market fit will occur only when the business value proposition, users, and distribution channels align. It’s the ideal balance of all three pieces. If two of the three are aligned, you’ll enjoy some short-term success, but you’ll struggle to maintain it.
Sometimes, you may judge that identifying the product-market fit is just an easy stage when building a product, more often than not, it needs constant monitoring and calculating. Otherwise, you won’t be able to balance with your product market.
After all, the demand and priorities of your customers may change. Your market may develop. Or, the issues people who want to solve may become more difficult. All these elements should be recalculated and adjusted; meaning you need to keep a sight on the product-market fit. Apart, some advantages come with a definite recalculation of the product-market fit.
Let us look at the advantages:
#1: Identify real needs, instead of just assuming
- What new product features should be added next?
- Should you develop the dashboard?
- Should you add your product to more use cases?
- How to announce the releases?
It’s simple to just assume and go with your “confident feeling,” thinking that product creativity and development happen behind closed doors.
Although your product development team might have great ideas that will improve your brand awareness, it’s always not preferable to invest resources into developing something without knowing if the market demands it.
Recurrently calculating the product-market fit will provide you with better insights as to what needs to be adjusted or improved and guide you to be aware of the user’s needs. Instead of assuming, you’ll know for a certainty what your next steps should be.
#2: You can able to sustain with constant revenue
- Is your product still fit for the market?
- Is the market still in need of the fix you’ve created?
- Are people willing to invest to use your tool?
If you can’t answer these questions may decrease your agility. Plus, you may start assuming blindly and think that your product is the best on the market and users will always be interested to purchase it. A recurrent product-market fit calculation will provide you with the certainty that you’re in the right direction, or conversely, will notify you that something needs to be changed immediately to continue to satisfy the needs of your users.
#3: You’ll be able to iterate your success faster during a crisis
This year shows us that we can’t take things too much for releasing something new. The change became very fast during this time. So, many industries and companies have been affected by the pandemic, one can’t negotiate the power of agile reaction. Let’s take the events industry, for example—one of the areas that got sadly affected by the crisis. And, we’re not just talking about the event heads, members, or venues, but also the overall event management technology companies.
Most of them started offering digital solutions for running physical events, but unfortunately, most of those events got canceled, which led to many startups with great loss. However, a few of them managed to progress and provide their solutions and focus on the online events industry. This wouldn’t have been possible without constantly recalculating the product-market fit and being processed with the new demands for people.
#4: Identify your industry and your stakeholders much well
Being consistent with monitoring your product-market fit will calculate your users’ needs and product users' satisfaction, as well as provide you with the necessary insights to understand the deepness of your industry. Thus, you’ll gain more resources, along with an ideal network that is interested to support your product and offer feedback.
So as you can see, calculating your product-market fit recurrently will improve your growth and strengthen your product.
So keeping that in mind, let’s list the strategies you’ll need to take to make sure a consistent product-market fit calculation for your firm.
#1 Be a proactive customer feedback collector
One of the many things we’re most loved about at Hellonext is to provide our customers with the ability to read their customers' minds with the help of feedback. What’s more exciting than being able to know what your clients’ needs and what they think about your product and how you can develop it and add additional meaningful value to their experience? After all, calculating the product-market fit shouldn’t be a complex task.
For this, it’s not necessary to hire researchers to conduct large budget market studies or run some focus groups to identify the product market percentage. It should be an intuitive and simple-to-maintain process—you can easily fix it and forget about it. No product market expert or researcher will give you better knowledge about the needs than your users themselves. All you want to do is have a dedicated platform to gather their feedback seamlessly. And we can guide you with that.
#2: Prioritize your user feedback
Another important thing you need to consider when calculating the product-market fit regularly is knowing how to prioritize your customers’ feedback. Some audiences may ask you to add particular features to your product that will help them specifically but won’t be valuable to other users.
Other users may ask you to build the hard features that will require long months of work, yet won’t give you a big ROI. That’s why you need to create an “ideal framework” that will help you prioritize everyone’s feedback.
This framework helps to keep an eye at the work and effort your team will need to put into improving a new feature, that you’ll be able to capture its market place after some time. You may want to spend a lot of time on those features that are of high value and highly hard. And on the other side, you may leave those features that are of high value, yet low complexity.
#3: MVP your new features updates
To start a SaaS business the right way without killing it, you’ll need a minimum viable product (MVP) for sure. That’s something that saves you from failure and investing huge money and time into a product that won’t bring you any meaningful revenue. You may begin with a little product prototype to test your potential users and see if your idea works and that fits in the marketplace.
So why not use a similar concept to your new features or product updates? Instead of wasting time on launching big features which have no value, initiate a smaller group of active users, launch a selected feature prototype, and communicate with people and request for feedback. Maybe they are interested to try it, or maybe a chance of hating it. But this instant product-market fit calculation strategy will help you know how to proceed.
#4: Determine whom you’re requesting for feedback
According to the survey, utilizing frequency affects the value of someone’s feedback: feedback from users who rarely use your SaaS product can be calculated differently from those who use it as a daily routine. The type of trial users vs. lead vs. premium users also affect their feedback value to your product market.
That’s why it’s crucial to look at the feedback or feature request and know where it is from. Is it from someone who is your power user who uses your software a lot, or is it from someone who isn’t very active on the platform? It’s appreciable if you have mixed with both the type of users, organize their feedback separately because trail user requests might ruin your crucial priorities.
#5: Request your sales and customer success teams to give priority for FAQ
Your sales and customer success teams are majorly communicating with your target audience and your customers. This means that they have access to a depth of information as to what your users need.
However, all this data gets lost in the day, and either you or your product marketing teams have access to this feedback. To prevent this from happening and to engage in a recurrent product-market fit calculation, request your sales and customer success teams to keep a record with people’s most frequent questions (FAQ’s) or demands. This will be an ideal source for growth and product-market sequence.
Convert information into actionable insights
Bringing out market and user insights that will guide you to develop and grow your product is the vital reason why you should never treat product-market fit calculation as a single-time event. It’s a recurrent process you’ll want to integrate within your product roadmap:
- Always be proactive and bring the audience to leave their feedback about your platform. Hellonext can help you by streamlining your overall feedback gathering process. You can just fix it and proceed with other works.
- Then, you need to prioritize the insights you’re gathering and decide what the best feature will convert into actions and next updates.
- Before launching a complex feature, use the MVP strategy and release a prototype to analyze if it works or not.
- Also, identify whom you’re asking for feedback, as the record of the user is very crucial.
- Finally, bring your sales and customer success team to record the most frequent FAQ’s they get from leads and customers.
All these actions will guide you to integrate the product-market fit calculation into your company branding and gain agility.