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"Minimal viable products and the application of the lean start-up approach sound understandable and practicable for digital products, but for physical products like ours, this is not feasible in terms of cost and effort." We have encountered this argument several times in past workshops and customer meetings. However, one aspect is usually underestimated: Digital MVPs are not only suitable for digital products and services! Read how this can be demonstrated with an online market test.
When it comes to the technical feasibility, suitability and handling of a product, the physical prototype is a tried-and-tested tool that should continue to be used in the future. However, before starting with the implementation, a product idea should be tested with regard to aspects such as interest among potential customers, product variants, or willingness to buy. This is where the online market test comes into play, which is ideally suited for early validation.
New products are often kept under wraps until the product is almost perfect. The aim is to avoid customers having a bad experience with the product at all costs, in order not to jeopardise the brand's reputation. However, this way, we risk developing a product that does not meet the needs of the customers. Thus, the question that should be asked much earlier is this: "Is this product really needed and is there a target group willing to pay for it?" (For those who want to delve deeper into this topic, we recommend the book Lean Startup by Eric Ries).
While the principles of rapid testing and gathering feedback have already become established in digital product development, these methods are still used far too rarely in physical product development. Yet, applying this validation approach could save development time, costs and, down the line, a lot of nerves.
In the context of physical product development, people’s thinking is often too complicated. The possibility to simply to test physical products by means of online market tests is often not considered at all. You definitely don't always need a finished, tangible prototype to validate aspects such as basic interest in the product, preferences for product variants or willingness to pay.
Instead of physically building the products, they are digitally visualised for the market test and marketed using landing pages and online marketing campaigns. It often makes sense to create dynamic or interactive elements (e.g. a product configurator) in order to be able to test even more product variants and their popularity among users. So, all we need is some creativity, a designer with a broad skill set that covers image editing as well as creating illustrations and mock-ups, and a person to implement the marketing campaigns. There is of course effort involved in designing these images, illustrations and mock-ups, and it often takes some improvisational talent, but the cost is usually manageable. Depending on the complexity of the product, the effort of digital prototyping usually amounts to a few hours or days, while the production of a physical prototype can take weeks to months, and often costs a lot of money. In addition, small changes to a digital representation can usually be made within minutes, whereas a physical prototype would require much greater effort and possibly even several variants having to be built.
With the help of the realistic digital representation of a physical product, an online market test can now be carried out. There are numerous possibilities for this. The basis for many tests is an attractive landing page, where the product is realistically presented and explained in a detailed product description – just as if the product already existed. The product can then be placed with a previously identified target group, for example via social media ads, Google ads or an e-mail campaign. (For more details, we would like to refer to our article “Successful market entry thanks to early market testing“).
Before an online market test is conducted, its the goal must be clear. Open questions that are to be validated should be clustered by topic at the beginning. Now the hypotheses, i.e. assumptions (e.g. about the problem, solution, product, service, usability, value proposition, target groups, price, sales channels, etc.) are developed, which then need to be tested with a suitable testing procedure. It must be possible for the hypotheses to be validated, and the parameters as to when a hypothesis is considered validated or disproved must be determined in advance.
For the determination of such criteria, you can use your own empirical values, if available, or you can stick to industry benchmarks. The latter requires some research. If the goal is to test the interest in a new product idea, this can be done with a social media or display campaign. For this purpose, ads with the simulated product are created, which link to the landing page, which has already been developed. In order to obtain results, key figures such as click rates are analysed. Of course, it is important to think about tracking in advance in order to be able to access the corresponding analytics for the evaluation. Marketing experts usually have good knowledge of industry benchmarks and can use comparative data and empirical values to assess the success of the campaign and draw the right conclusions.
Especially when we work with established companies that would like to test a new product idea, we regularly encounter concerns about possible damage to the brand's reputation due to an unsuccessful market test". For this reason, we often create a separate brand for our clients from the corporate sector, especially for the market test. This not only has the advantage that in case it is not successful, the company's image does not suffer, but it also brings efficiency advantages. Not having to stick to certain guidelines such as corporate design, corporate language, etc., means being able to work much more quickly and thus achieving results faster.
A lack of interest in a new product should not always be seen as a failure, but offers the opportunity to pivot the product early on and reduces the risk of developing and launching an offer that would not have found any recipients.
Last year, we conducted an online market test for a physical product for a large corporate client, to validate the interest of a new product idea as well as potential fields of application. Within three weeks, a new brand was created as a cover for the actual company, the product was illustrated, a landing page was built, and social media accounts were established. In order to better understand which applications the expected target group was interested in, a survey tool was used to develop a configurator that could be accessed via the landing page. This provided detailed information about how customers liked to put their product together.
During the one-month campaign, we were able to reach almost two million people via social media and Google display ads, and bring more than 65,000 visitors to the landing page. The combination of above-average click-through rates of 3.5% (cross-industry benchmark is 0.9%), extremely high landing page user numbers, and a very long average dwell time confirmed the interest of the market in this product. In addition, we gained valuable insights into the target group and specific fields of application.
