Lesson 27: Introduction to Your Final Product Evaluation
You have heard us say many times that creating a product people want to buy requires you to achieve three things: First, you must solve a problem people care about, or create something that adds pleasure and joy to the world. Second, you must be sure your product engages the senses and does it in a unique form. Third, your product must satisfy some level of human needs. In the final 12 lessons in this course, you will learn how to evaluate your big idea to see if it has the potential to be turned into a million dollar product. If it doesn’t yet measure up, you can use what you’ve learned in this course and return to the drawing board to strengthen your idea and eliminate the weaknesses. Or you may decide to drop the idea altogether and move on to search for a better idea to develop.
First, we’re going to go take you through a series of questions to make you think about how your product is viewed by different prospective customers including: consumers who are interested in your product’s benefits; investors who may have a financial interest; retailers who want to sell products at a profit while serving their customers; licensees who want to license the right to manufacture and sell your product to their customers and earn a profit; and the media that cares about stories that will interest their readers and viewers. We are not spending a lot of time talking about distributors or sales reps, but they are closest to retailers and care most about finding good products to sell that will turn a profit for them with retailers.
Each one of these prospects has different motives for judging your product’s value. Your product may excite the media or consumers, for example, but not be profitable enough for investors, licensees or distributors. The media may love your story of discovery or invention, but not care if you can make a profit. We have seen too many inventors and entrepreneurs get great media attention and think they have a winning product only to learn that retailers and consumers don’t buy because the price is too high or it doesn’t satisfy a real need. Each customer evaluates the product according to their needs, not your needs. The better you understand their needs the more able you’ll be to judge the product objectively and see its true potential from your different customers’ points-of-view.
Consumers, for example, care about what the product costs and the benefit it delivers to them. If you’re selling directly to consumers on your website, or through an intermediary like Amazon or Yahoo or Shopify, you need to be clear about what’s in it for them. They want to know how your product is going to improve their lives. What problem does it solve and for whom? Consumers love videos that show how your product looks and works. They care about prices and value. They want to see product reviews by real users so the more testimonials you can show, the better. They care about the quality of your customer service and how responsive you are to their needs.
Investors care about the size of the market for your product. They worry about what you will do with their money. They want to know that the money they are investing fits the problem you are solving. They want to know how much of your own money you have invested in your product so far. They will ask how and when they will get a return on their investment. They want to know if the product has intellectual property protection that will give you a competitive advantage and can’t be easily copied. They are interested in your brand power and line extensions that could grow your brand. They care about profit margins, the higher the better. They like it if you can launch your product with a minimum of cash required. They care if it is cross-cultural so it can be sold worldwide.
Retailers like consumables. Their first loyalty is to their customers, so they want high margins that allow them to make a profit even when selling at the lowest possible prices. They want to be assured you can fill purchase orders on time so their shelves are never empty. They want you to follow their policies and procedures for receiving orders and follow their shipping requirements explicitly. They want to know how you will merchandise the product. Some chain stores, especially supermarkets, want you to pay slotting fees to acquire shelf space. They care about product failure rates and returns that take time and people to manage. They want to be sure your packaging clearly explains the problem and the solution so it doesn’t require assistance from store personnel.
Self-service retailers like Walmart don’t like products that need to be demonstrated to be understood. On the other hand, online marketers love products that can be easily and dramatically demonstrated via video. TV shopping channels want you to show the product live in person. Large retailers require you to carry product liability insurance and show proof that you added their names to the coverage. They also want assurances that you have the financial ability and health to carry inventory in the larger quantities so you can do quick turnarounds if your product blows out of their stores.
Licensees want strong intellectual property protection so they don’t have competition. They will also be concerned about the rate of royalties you want for granting them a license. They have many of the same needs as investors and care about the minimum cash investment needed to get your product manufactured and into the market. They love upsells and line extensions so they can keep the brand going from year to year. They would love a ten-time markup from cost of manufacture to consumer. Some want you to continue to be the spokesperson for the product while others want you to remain in the background.
In this lesson you learned how important it is to walk in your customer’s shoes, and to understand why they are interested in your product. You learned how consumers, investors, retailers and licensees each measure your product’s viability based on their profit needs, not yours. The next twelve lessons make up the final evaluation of your big idea to judge if it can be turned into a million dollar product.
Each of the twelve final lessons is a single question followed by ideas and information you need to think about to help you answer the question.This test is self-administered, so you must be brutally honest about evaluating your product. It doesn’t do you any good to fudge your answers. Kidding yourself will be very expensive. We all hope it will be a winner, but if the test casts doubt on that possibility, don’t waste your money trying to turn a bad idea into an equally bad product.
These twelve questions will show you whether your big idea can be turned into a winning product, or it needs a lot of work. Download our PDF of the questions and refer to them as you work on bringing your big idea to life. Circle the number of each question that you are not sure about and need to work on to improve your chance of success. Pin the sheet to your bulletin board where you can see it. ...And this is important...Do not launch your product until you can answer a confident yes to all twelve questions.