Remember Apple Newton?
Neither could we. This mobile tablet, released in 1993, is often hailed as Apple’s biggest flop. Its hefty price tag, large size, and blatantly inaccurate handwriting recognition software were to blame for its inglorious demise.
Innovation is a high-risk game, and even the biggest players get it wrong sometimes. Will your new product resonate with your audience? You can wait until the actual launch and find out the hard way — running the risk you’ve invested a lot of time and money in another Apple Newton.
According to Mark Randall, VP of Creativity at Adobe, there’s a better alternative: Gather valuable customer information before you launch your product, through low-cost ads. In this article, he will share his insights and best practices for this innovation strategy.
Randall didn’t start his career at Adobe — he used to be an entrepreneur and has founded three startups making video hardware and software. He funded these companies himself, which basically meant there was no funding. “Back then, resources were scarce,” he says. “And the cost of being wrong was sudden death.”
In other words, he had to find a cost-effective, low-risk way to test his product ideas in the market. A test campaign to validate if he was on the right track, or better off launching something different.
The solution? Randall created low-cost ads for his products before actually building them, to gather authentic customer data.
Why not just trust the experts?
Before going into this test-before-you-launch strategy in more detail, let’s discuss a few other methods often used. The first is trusting an expert’s opinion when launching a new product. This person could be your product manager, maybe it’s an investor — but definitely, someone who knows your company inside out and is well-acquainted with your audience. In other words, someone perfectly capable of predicting a hit or miss, right?
Unfortunately not, says Randall. While their insights can surely be of use, they aren’t accurate enough to base a product launch on. What’s worse, the expert(s) may be very certain their expertise and opinion on a product-in-development is right, and that may lead you astray. “No matter how much these people love your product, if they got it for free their opinion doesn’t count. Only people willing to pay actual money can provide you with valuable feedback,” says Randall.
What about focus groups?
Another way to test your product’s viability is through focus groups. Unlike your own team members, they have no skin in the game, so there’s a higher chance they’re reviewing your product truthfully.
The problem with focus groups is that people are horrible predictors of their own future behavior. “Just look at gym memberships,” Randall says. “Every January, people rush out to sign up for year-long memberships that would only be cost effective if they went every week. But in reality, most people stop going throughout the year so the subscription becomes a waste of money.” In other words, talk is cheap. A focus group study may indicate consumer interest in your product, but it’s in no way a guarantee.
The only way to test your product idea is through real customers willing to pay actual money for it. And thanks to the internet and social media, it has become relatively easy to reach out to this audience.
This makes early testing particularly useful for startups and SMEs, which tend to have limited resources and may not have any creative pros on staff. Creating these ads is rather cheap, can be executed quickly and doesn’t require coding or other hard-to-acquire skills.
So how does it work? Here’s a step-by-step action plan by Mark Randall:
Step 1 — Come up with some ad ideas, quickly
Get some post-it notes and write down a few ad ideas — image(s) and copy you’d like to use to promote your product. This shouldn’t take more than five minutes. Adobe has a great selection of stock images and design templates, which are fool-proof.
Now, pick the ideas that you feel are the best, and test them. Keep those different ads widely divergent, don’t just change a word or two in each, as it doesn’t give you enough testing value. Keep it simple to start, so you can quickly validate and iterate.
Step 2 — Create a simple webpage and/or the ads for social media and Google
Once you’ve come up with some ad ideas, start creating your webpage. You don’t have to be a web guru to do this right! At Adobe, I often use Squarespace or WordPress to quickly put up a website and use Facebook Ads and Google Adwords to attract potential customers to that page.
If you feel building a homepage is too much work, you can also skip that step and just create the ads, which is super easy.
Step 3 — Don’t mislead your audience
You are advertising a product that doesn’t exist yet. That’s OK, as long as you’re not making any false claims. First, don’t suggest the product is available now; indicate it’s in production, in the development process, coming soon, or however you’d like to phrase it. All you need to ask from your potential customers is to register their interest to be notified when there’s more news about the product, through email or social media.
Step 4 — Take off your branding, if needed
If you work for a well-known company, like me, adding branding to your ads will taint the results. Are people really excited about the product or do they just like your brand? So when I run tests, I don’t do them under Adobe’s name. This means executive stakeholders don’t need to be involved, saving time and money. And if your product idea turns out to be way off base, your company or brand does not suffer any damage.
Step 5 — Push your ads unto a small target audience
There’s no need to show your ads to a huge number of people, a sample audience of 100 to 200 people should do the trick. This keeps the cost low, and the speed of execution high.
Step 6 — Gather and analyze customer data
Once your website and/or ads are up, you can start collecting and analyzing customer data. Not just customer interest in a concept, but also where to find that kind of customer with an ad; how you reach them, which channel is most effective to communicate with them, and the potential cost of customer acquisition in doing so, done by measuring the response percentage. If you’ve used a website, you can ask them for their email and contact them in the future for more feedback.
Step 7 — Accept your data isn’t perfect
Get ready — people will poke holes in your data. Your tests only target a small number of people, meaning the results will not be perfectly accurate. But as mentioned, that’s impossible to obtain at this point in product design. You can always go out, try your experiment again, and gather even more data to influence decision making. It’s all better than opinions and speculation when it comes to eliminating risk.
So, to sum things up, data-driven evidence is key when you’re developing something new, and low-cost ads are a great way to gather that data. Those who understand their customers can be more speculative, creative, and exploratory. “That’s where I’d like to see people ultimately end up,” Randall concludes. “I want them to have this feeling of, ‘I am allowed to have somewhat crazy ideas.’ It might scare you, but I can promise you it works.”