Market Fit

By Martina Lauchengco

The Market Side of Product/Market Fit

I see so many companies find an initial beachhead of customers, think they have product/market fit, and then find their growth stalling. It’s never about just one thing. But it’s often because not enough attention was paid to market fit. Discovering the product and its market aren’t independent activities. They are discovered in parallel.

When I say market fit, I mean discovering ‘market pull.’ What makes a customer need or want your product enough that they take immediate action to learn more, try, or buy? And what makes this pattern repeatable?

Beyond a product’s usability, feasibility, and viability, product discovery work around value is intended to find this answer. Although it is the most difficult and important risk to probe, it tends to be underdeveloped.

People say they will use or buy a lot of things, which is easy to confuse with product desirability. Not all tests and techniques are equal in placing decisions or actions into a realistic enough market context.

Determining market fit is about taking inputs from discovery work and applying them to what people are likely to truly do in real-life conditions. How will they act when confronted with a crowded market, competing priorities, limited budgets and a status quo that works well enough?

Value discovery work must probe beyond “would you buy this, would you buy it from us, and how much would you expect to pay for it?” Assessing market fit requires probing more deeply on market conditions that motivate action or create urgency. Sometimes it can be how a product is distributed. Often, it starts with how a product is talked about and its messaging.

I see many companies struggle with how to take what they’re learning and understand the market implications. It is why a product marketing partner is so important in this work. Good product marketers can apply more market nuance to doing and applying discovery work and understanding how it applies to all things go-to-market.

They catch things like segmenting customers for who might be better evangelists and not just looking at initial users of a product. Or how actions might be more influenced by word-of-mouth from what is read on a comparison site or on Reddit than an actual trial product experience.

Synthesizing all this learning into a smart product go-to-market plan, positioning and messaging is the work of product marketing. But it’s important that strong discovery work happens to inform all of it.

Probe Early, Probe Often

Traditional market research from analysts, third-parties, and trend reports is always good context, but nothing beats live customer conversations for understanding market context.

Discovery work led by product managers should always cover product baselines:

• Are your customers who you think they are?
• Do they really have the problems you think they have?
• How does the customer solve this problem today?
• What would be required for them to switch?

The market fit side of the equation explores what lies underneath perceived value. It probes market dynamics affecting what people think, what drives growth, and what creates urgency.

The below questions don’t need to be asked all the time—nor are they the only ones that might be appropriate to ask–but the collective discovery work done should answer these more market-oriented questions.

Value

• Who is most likely to use this? Who buys it? Who influences decisions?
• Do they prioritize the problem?
• What else are they considering that is similar?
• What have I said/shown you that is most compelling (‘a-ha’ moment)?
• If probing relative urgency: if you had 10 points in your budget to allocate to solve your most urgent problems, how many points would each get?
• If probing pricing: how much would you expect to pay? Maximum price willing to pay? What else have you recently bought at this price?
• What new product have you most recently bought and why?

Growth / Connection

• What created curiosity?
• How would they describe this to a colleague? (crucial for messaging insight)
• Where would they expect to see this product talked about?
• How would they expect to assess it? 
• What would make them a raving fan?
• Is there any line of sight to the next most likely market segments to adopt? Do they feel the same sense of urgency? What market situations are necessary for them to act?

Any product discovery technique that engages directly with customers can be adapted to inform this work–from prototypes to usability tests to A/B tests to the Sean Ellis test. I also advocate using simple market test techniques that give quick, directional feedback and illuminate how people think, feel, and most important, act.

Here are some examples of discovery techniques and how to use them to probe market-fit dynamics:

• Exit surveys. For users who immediately exit a website, use any number of tools to pop-up a one question survey “Is there anything we could have done differently to make you stay?”
• A/B messaging test. There are many tools that make it easier to test and optimize product descriptions or text on websites. When you do A/B testing of messaging, don’t just pay attention to what performs better. Ask what the relative performance differences tell you about market perception. Are you positioning yourself in the best category or into the right market trend to be valued?
• Demand test variation. On a website where a click leads to a landing page demand test, ask only for some sort of buy or trial commitment. This separates the curious from those actually willing to take meaningful action. You must be transparent on the state of your product (if it’s an idea versus an existing product) but you can still ask “Why did you decide to buy” right on the page in addition to asking if people are interested in follow-up.
• Ad testing. Great for messaging or seeing engagement on social or search platforms. I recommend testing vastly different directions, for example, aspirational, product or problem-oriented messages. You’re not trying to optimize which is best, rather you’re trying to learn what direction gets people to act and what their relative performance tells you about the market.
• Sentiment probe. Take a baseline sentiment measure (use a seven or ten point scale) on interest for your product, problem, or space. Then show a video–your product, a competitive product, an ad, a brief explainer video–and measure sentiment with the same question after the video to see if there is any shift in interest. If there is, ask those who shifted why.
• Usability test variation. In addition to what you normally probe, include key competitors website(s) to watch users navigate through and ask what actions they would take next. Another variation is watching people search for your product or one like it in the space. This helps you understand a more complete customer journey as opposed to just your product’s in isolation. It’s better at shedding light on what people are likely to do as they explore a problem and the space in which your product operates.

I encourage people to be creative and get out of the building to really understand market fit. That’s where a lot of big ‘a-ha’ insights happen that might affect product go-to-market.

This is excerpted from LOVED: How to Rethink Marketing for Tech Products. The book discusses additional techniques in more detail.