“We had more than 1000 answers in one day using Survicate's NPS surveys. We redirected those who gave us 9 or 10 to leave a rating online. We went from 4.2 to 4.8 on Trustpilot.”
“We had more than 1000 answers in one day using Survicate's NPS surveys. We redirected those who gave us 9 or 10 to leave a rating online. We went from 4.2 to 4.8 on Trustpilot.”
Robin Tussiot
CRM Manager at Kard
EFFORTLESS SURVEYS
Run multi-channel customer feedback surveys in a snap
“Survicate integration capabilities are great and that’s a big part of the appeal. And the platform itself is very innovative and it’s so easy to set up surveys.”
“The targeting aspect of product surveys, the number of question types to choose and customizable attributes make Survicate the best survey tool I've ever used.”
As Alex Schultz, Meta's VP of Growth and a marketing consultant, says, companies' most pressing challenge is a lack of product-market fit and not realizing it. You don't have to be a fledgling startup to miss the fit. Some established companies with significant customer bases have also shared that plait.
Take Apple. The company learned its lesson when rolling iPhone 3G out to Asia in 2008. With consumers falling into raptures over the new model in 21 countries, the phone failed to hit the sales targets quite spectacularly in Japan. In the country where around 50 million cell phones were sold the previous year, Apple managed to sell only 200,000 of the 3G.
The reason? Not adjusting the product to the needs of such a unique market as Japan. Apple was so sure of the brand’s halo effect that it completely underestimated the importance of product-market fit.
In this blog post, we'll get deeper into this vital metric. We'll explain how to go about measuring it and how to turn unsatisfactory product-market fit survey results to your advantage.
Read on.
Table of contents
What is product-market fit, and why does it matter?
In simple terms, product-market fit is the degree to which a product / minimum viable product (MVP) satisfies strong market demand.
Product-market fit is the prerequisite for growth. If you achieve it, you can rest assured that your unique value proposition holds, you target the right audience, and you do it through the channels that will sustain your business. Your MVP solves a problem or addresses a real need of the target market - one that can be monetized and produce sustainable growth.
Also, should you want to take the company to a new level, you won't be able to apply for Series A funding before you have evidence of the product-market fit. You still need to fine-tune your offering so that:
It meets the need of a market big enough to make the product profitable.
The problem your product solves is significant enough to claim higher price tags (particularly important if you target a small market niche.)
Your product or service can hit specific performance targets over time.
What is a product-market fit survey?
The product-market fit survey (a Sean Ellis test) is the brainchild of Sean Ellis - a marketing guru and the author of Hacking Growth, whose approach to business growth propelled the market success of companies like Airbnb, Facebook, and Dropbox.
What Ellis found out is that what it takes is a single question to measure product-market fit:
"How disappointed would you be if you could no longer use this product?"
The answers to this question range from "very disappointed" to "not disappointed at all."
The Sean Ellis testnot only lets assess how well you're meeting the market demand, but it can also help you achieve the product-market fit if you’re not there yet. (More about it farther down the text, so read on!)
How to use the product-market fit survey to assess the fit?
There is more than one way of running the surveys. Everything depends on the context and the goals you have:
You can send the survey to all customers if you don't have a large user base.
With larger, more diverse user bases, you need to segment the customers to draw actionable results. The best would be to segment the audience before running a survey and run it only across the most profitable group. You want to research the engaged customers, customers from the paid pricing tiers, and customers who share characteristics with those most active or lucrative.
You can also break the respondents into industries and job profiles when analyzing the data. This way, you'll be able to detect your best customers and create personas you to design the product for.
Altogether, it's not about an overall product-market fit score but how much of a product-market fit you have across customer segments. It's a positioning exercise.
How do you interpret the product-market fit survey results?
It's simple: If at least 40% of users respond "very disappointed" to your product-market fit survey question, it's a solid indicator you've achieved the fit and can expect sustainable growth.
Where does the number come from?
Having analyzed nearly a hundred startups that measured product-market fit with the survey, Ellis found out that those companies who reached the threshold of 40% were those who experienced rapid growth. The figure is a leading indicator of strong traction and a market fit.
What sample size do I need for a product-market fit survey?
But it's essential to think about who those respondents are. You don't want to waste time surveying customers who logged in once but never actually used your product or service. As we've mentioned earlier - you're looking to run
research among the target audience that is very likely to be your best customers.
As mentioned before, the user feedback you want to analyze comes from users who:
are engaged users
used the core features of your product and are activated
Send the survey to this customer group, allowing for a 30% response rate.
Following this advice will ensure the most reliable, actionable results, and bring you closest to determining whether you have achieved true product-market fit or how close to making it you are.
When do you need to send the product-market fit survey?
There are a couple of scenarios in which you'll benefit from measuring product-market fit:
You worry about the speed of your growth, or you're unhappy with the customer's lifetime value.
The business is doing well - you have a reasonably high customer acquisition, and the retention rate is high, but for some reason, you cannot take off for real.
You want to scale your business, and you're going to acquire funding.
You’re going after a new vertical, like a new market or a buyer persona, and you need to assess the extent to which you have a fit with that target group.
There is no apparent reason, but you want to stay on top of the changes in the market.
It's important to remember that product-market fit is set in stone. Even if you have found it, you still need to measure it in regular intervals, especially if you operate in a highly competitive market and you're developing the product fast.
How to leverage the survey to find the product-market fit?
Determining your product-market fit is crucial for your company's growth. A product-market fit survey is a powerful approach, provided you target the right users/customers and know what to do with the results.
The good news is that no matter how important it is to achieve a match, no one gets there right away. If there is no fit, the question you need to ask is: "To what extent have we achieved it?"
The chances are that, if you analyze the survey results, you'll discover that you have the Sean Ellis score among one or more segments of users. That's great news. Chances are you've just found your target audience. Build on that.
Here are a couple of surveys that can be used in the next steps:
User persona survey template
Use the user persona survey templates to collect user insights and deepen your understanding of who your target audience is. Uncover your clients' context, motivations and attitudes.
Adapt our customer discovery survey template to suit your needs. Reduce uncertainty - uncover the scale of a problem you want to address and the frequency of a need.
Use the value proposition validation survey template for additional validation of your assumptions. Gather quantitative data to gauge what portion of the market prioritize the jobs, pains, and gains in question the way you have.
Survicate caters to the needs of marketing, product, and customer success teams. It enables hassle-free collection of customer feedback, feedback management, and analysis.
Survicate’s robust library of integrations allows collecting user feedback through all companies' communications channels. It enables aggregating data from various sources in one platform. As a result, companies can make better use of the user insights they have accumulated.
Finally, the integrations with product management software, such as Amplitude,Mixpanel, and Productboard, allow SaaS companies to run product surveys and collect product feedback in product management tools. Product teams can efficiently analyze feedback directly in the tools - turn the user insights into product ideas and plan roadmaps effectively.
To quote KISSmetric's founder, Hiten Shah, "Understanding your product-market fit is everything," and a product-market fit survey is a potent tool to measure it. Running the survey is your first massive step to redefining your core value proposition, creating successful market positioning, and finding growth.
As a content marketer and a service designer, Ula helps companies communicate their value propositions, pen user-centric messages, and offer a consistent, on-brand experience on all customer touchpoints. She is a former contributor to Survicate's blog.
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