Product/Market Fit is a specific metric that allows specialists to realize how the product meets relevant market trends. This metric is considered to be an essential part of the transformation of a project from a simple idea into a competitive product that can satisfy the significant needs of the market.
When Product/Market Fit presents
In fact, it is quite easy to identify how well the product meets the needs of the relevant markets. In order to demonstrate the presence of market compliance, there is a simple diagram:
As it can be seen, Product/Market Fit implies a certain success of the product and its active development and recognition. Usually, such results are absolutely achievable - it is important to make an accurate marketing analysis, the monitoring of current trends in product sphere and the observation of products of direct competitors.
When Product/Market Fit is absent
At the same time, it is obvious when a product does not work properly, and its functionality is far from the relevant market trends. There are the following signs of the absence of the product/market fit:
- Present customers are hardly aware of the real value and purpose of the product
- A buzz marketing strategy does not work effectively
- The flow of new customers does not increase
- The sales cycle is too long, and most of the transactions stay uncompleted
- There is no open interest in the product from media
Nevertheless, it does not mean that this product is doomed to failure - it is just a good reason to make some changes in the conception of the product.
How to measure Product/Market Fit
In order to determine the presence of Product/Market Fit, there is one good and simple technique called NPS (Net Promoter Score) - it is the degree of consumer commitment to the product or company.
As a rule, NPS includes several steps, as follows:
- The initiation of a customer survey. There is the mandatory question: 'Would you like to recommend our product your friends or colleagues?' with the answer in the form of ten-point scale, where 0 means 'Under no circumstances' and 10 means 'Would definitely recommend it'.
- In accordance with obtained results of the survey, all the consumers are divided into three groups. The first is 'Product promoters' - they certainly like the product and have the highest rates with 9 or 10 points. The second group with 7 or 8 points consists of neutral clients, and the last group is called 'Detractors'.
- The calculation of the NPS index is the formula: the percentage of detractors is substracted from the percentage of product promoters. If the result is at least 40% it means that the value of the product is correctly marked, and there is a real chance to create a really successful business model based on this desired product.
There are some other methods that can measure the presence of Product/Market Fit and increase the attention to the product, and you can read about them in the following materials: