What are the best marketing tactics to validate a business idea?
Even the most courageous entrepreneurs want to be confident that they are throwing themselves into a business with real potential to become a success. Marketing is one of the best ways to be sure, before you quit your job, make the big announcement, and throw your life savings behind this.
So, how do you do it? Check out these marketing tactics to determine whether you’ve nailed it, or not.
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The Importance Of Validating Your Business Idea
In spite of the perception that entrepreneurs are big risk takers, no one really wants to bet it all without being pretty sure they are going to win. At least not in business. Throwing away some money for fun in Las Vegas is one thing. Betting your savings, career reputation and income for the next year and having to put in all the hours, work, and mental focus is a lot more to bet.
Starting a business may never risk free. Just as no investment is either. Yet, there is a lot that entrepreneurs can do to prove their idea, reduce risks, and kick doubt to the curb before putting it all on the table.
The risks of not doing this is everything when it comes to the marketing tactics to validate a business idea. IQ, the school you went to or who you know is not a free pass, and still doesn’t mean you’ve got a genius idea that can’t fail. Even if you believe passionately that this is a no-brainer that everyone in the world will die to get their hands on, you want to prove it.
This reduces risks, will help attract investors and strong team members, keep you in the game on the challenging days, and perhaps help hone the brand, business model and product before a public launch so that things go better from right out of the gate.
Even if you’ve done market research or read and purchased industry reports, until you test with marketing, you are just guessing.
If you want to build a billion dollar business you are going to need to raise capital from outside investors and they are all about validation.
In addition, keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
The Importance Of Custom Tailored Marketing For Your Business
Before trying or adopting any of these marketing tactics to validate a business idea, it is vital to recognize the importance of having a customized marketing strategy and plan that is tailored to your unique business and customers.
Not all of these ideas will be ideal or optimal for your specific business. That’s true even if you see your competition or other seemingly successful personalities and corporations using them.
Unless you have access to their real internal data, you don’t know what is really working for them or not. What’s right and best for one business can be a complete fail for another.
For example, some may appear to be going viral on YouTube and Facebook, but those channels may not work for you at all. Failing to get this right can bankrupt you faster than anything else.
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So, before you launch any serious marketing campaigns, be sure you are working on facts and experience, and have really thought through the match for your ideal customers and your company.
Marketing Tactics To Validate A Business Idea
1) Landing Pages
This is a critical one of the marketing tactics to validate a business idea. You don’t need a full website or even a tangible product on shelves to validate your business idea. All you may need is a simple, single landing page, and some traffic to it
This landing page can be used to farm customer leads for when you are ready and to gauge interest. It can be used to sign up free users and beta testers. Or it can be used to secure real sales.
There are plenty of landing page tools you can leverage, and many that offer easy email, listing building and instant payment integrations.
Surveys are a great way to test the market, validate your idea and even build early lists and sales. To be truly accurate it may be wisest to use a third party service for unbiased results. However, you can use your own marketing surveys to build connections and lead to soft sales.
There are a variety of ways to do this from people in the street with ipads, to email questionnaires, Twitter polls, and outbound phone calls or text based surveys.
3) PPC Ads
Pay-per-click ads are a fast way to test your business idea. In a few hours you can have a variety of split test ads running online, with your brand getting thousands of views.
The flexibility with budgeting means you can run with less than $100, or put a $1M into a real test. Then get feedback and data within hours and days instead of months.
If PPC is a part of your longer term branding and marketing strategy, then testing it now can give you insight into what your customer acquisition is impacting ultimately your startup costs.
4) In Person Sales
Many of today’s big nine and ten figure business success stories started out with the founders traveling the country and canvassing their cities. They went door to door, one prospect at a time to pitch in person. This one has the highest touch from the marketing tactics to validate a business idea.
5) Free Demos
Giving free consultations, demos and test drives can all be ways to generate leads and sales, make warm connections and get your product in users’ hands. Just make sure you are differentiating between those wanting the freebies and those who will become paying customers.
6) Pre-Sell On Existing Platforms
For consumer products there are many existing marketplaces you can use to quickly and inexpensively test before building your own assets. This might include the likes of Amazon, etsy, eBay, letgo and offerup.
Hopefully this post provided some perspective as you are looking into the marketing tactics to validate a business idea.
You may find interesting as well our free library of business templates. There you will find every single template you will need when building and scaling your business completely for free. See it here.
In the video below I cover in detail the marketing tactics to validate a business idea.
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FULL TRANSCRIPTION OF THE VIDEO:
Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about marketing tactics to validate a business idea. Before we get started, make sure that you hit that subscribe button, and this way, you will never miss out on any of the videos that we roll out every week.
Validating a business idea is essential. Before you give your notice, before you take that leap of faith and throw yourself out there and put yourself all-in to go after that idea, you need to know if that idea is going to be valid, if that idea has legs or not. In marketing, it’s a great way to understand and see if there are going to be either customers or if there are going to be crickets when you launch. That’s why it’s essential, and in today’s video, we’re going to be breaking down some of those marketing tactics so that you can use them for yourself to validate your own idea and take it from there. So with that being said, let’s get into it.
The importance of validating your business idea. This is not like going to Vegas. This is not like going and making a bet. You’re putting your life on the line. You’re throwing away and putting aside everything, your professional career, for something new – for a new chapter. This is why you want to validate it. You want to make sure that there are going to be customers that are going to be willing to pay for that product or that service that you’re bringing to market. That type of validation, that type of social approval or social proof, is something that especially investors are going to want and expect that you bring to the table.
Rather than going to an investor and saying, “I’m raising money for this. It’s going to be a cool idea.” How would it be if you go to the investor and you say, “We’re raising money for this? We’ve already done multiple tests. Here’s the validation. Here’s the data, and we are ready to roll.” That’s the type of confidence, that’s the type of research and due diligence and understanding of the market that you’ve done to get to a point of comfort and to get to a point where you know that there is going to be cheese at the end of the tunnel.
One of the tactics that you can use is landing pages. Landing pages are fantastic because they allow you to not wait until you have that product or that service already done. Here, you can use pages like LaunchRock or hitting GoDaddy. You can put a Coming Soon page. Or with Instapage, for example, you can create a landing page where you’re giving an idea of what that customer is about to see.
Basically, it allows you to see if they would be willing to purchase it. You can even create check-out pages that are attached to that landing page with tools like SamCart. So here, you have the possibility to ask your customers if they would be willing to pay and to see that type of behavior that they’re going to have with that landing page, and that is going to ultimately serve you and give you data points in order to build something that they’re going to be excited about and something that they are going to be willing to pay for, which is key.
Surveys are also a great way to understand what your customers want and need. Here, you can create a set of questions. It could be using online sites like SurveyMonkey, where you get people to just go there, fill in, and then you can start to analyze what kind of patterns you’re receiving that are similar from one user to another user that responded. You can even take it to the street and ask certain questions to some of your potential customers and see what they’re saying. But ultimately, surveys give you that qualitative data that will guide you in the right direction and ultimately determine that path or that journey that you’re going to have to embark on in order to create whatever the market is asking for.
Pay per click ads are also a great way. Here what you can do is you can attach that landing page that we were talking earlier about to an ad. Then, on the ad, you start driving your potential audience or your potential customers to that landing page or to that survey and then see how they are behaving. What kind of response are they getting? If you have two ideas, would they click more on Idea A versus Idea B? That type of data is going to be very telling for you because here you get to see a large number of people interacting with what you’re thinking about creating, and this is ultimately going to help you to understand where you’re going to be able to make the most amount of money. Here, you can either create a landing page or, as I was saying, you can even put the possibility for people to make payments. If you’re attaching perhaps a Facebook ad or a LinkedIn ad or Google ad where you’re driving that traffic in, you can see how people are reacting and if they would be willing to pull out their wallet and make a payment.
In-person sales. This is a fantastic way to really understand if the idea has legs or not. In many cases, you wouldn’t believe how some of those incredibly successful entrepreneurs have actually gone door-to-door in order to get people to pay for whatever they were doing. That’s going to help you understand what they think or how they feel about what you’re bringing to market. Those are great data points that you can also capture in order for you to build something even better and to continue iterating toward perfection.
You can also give free demos. You can give something in return for that, but, essentially, you get to see what kind of questions people are asking. How are they reacting when you’re showing them that product, the way that you’re envisioning? Maybe it’s like a minimum viable product kind of thing. But stay away from the people that just want freebies. Be careful with those because those are going to derail you, so just go after the people that perhaps are going to fit that criteria from a customer profile that you have researched.
You should also presell your product. There are great places like Amazon; you can use Facebook, or you can even create a crowdfunding project on Kickstarter where you’re crowdfunding, and while people are giving you contributions, you’re, in exchange, giving them the product. It’s a good way to understand if the crowd is validating what you’re thinking about bringing to market, and if that’s the case, then it’s a fantastic green light to make it happen. There are tons of projects that launch on platforms like Kickstarter or Indiegogo, and it gives that type of validation to really understand if it’s worth it or not to continue executing on that business.
I would love to hear what you’re up to and how you’re validating your own ideas on the comment section below. Also, take a look at subscribing, as well, on our channel so that you don’t miss out on all the videos that we’re rolling out every week. Also, shoot a Like to the video. Then, as well, if you have any thoughts or if you need any help with your fundraising efforts, shoot me an email at [email protected]. Thank you so much for watching.