Every day I come across entrepreneurs who are trying to sell a product because they “know” there’s a demand. Upon deeper questioning and analysis, their research is loosely based on their own needs and experience, and not that of their target market.
For example, if you’ve ever watched the show “Shark Tank” (by the way, I highly recommend it), you often see struggling entrepreneurs who are looking for an investment because they have a widget they’re selling based on what they believe will sell – but the Sharks are quick to ask questions like: “Why would anyone buy this?”
It doesn’t matter if you’ve created a better, more effective piece of exercise equipment if it’s too complicated, too bulky or takes too much time to get the results. Our Insiders’ Club Members know it’s likely not going to do well on the Home Shopping Network, but might be a better sale to personal trainers.
The other day, the Sharks questioned a guy who was selling “Cougar Energy Drinks” to women between the ages of 35-55. He did a good job defending the benefits of his product, but at the end of the day, the Sharks wanted to know: “Are women actively looking for a product like this?” Unfortunately, this young entrepreneur didn’t have the right answer. In fact, the Sharks felt that his sales were not based on his target market assumptions, but rather sales are likely resulting from customers buying “Cougar Energy Drinks” purely as a gag gift.
If the Sharks’ assumptions were right, this young entrepreneur could be more successful positioning his product, marketing and distributing to the gag gift market.
Entrepreneurs: do you really know why your customers are buying from you?
It’s simply not enough to create a product, push it out to the ocean of customers and let it set sail.
Here are 7 Questions Every Entrepreneur Must Answer About Their Product or Service:
- Who, specifically, are the people that want what I have to offer?
- Of the entire universe of possible clients/customers, who is my ideal client?
- Why do they think they want it?
- What is the real reason they want it? (Hint: why they think they want it and the real reason why they want something is seldom the same)
- What are they using instead of using my product/service?
- Why is mine better?
- What can I do to make sure they get the best result from my product/service once they become a customer?
For better sales conversions, lower cost of customer acquisition and higher profit margins – it’s important for entrepreneurs to know precisely who they’re selling to – and why their product/service is important to them.
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