Marketing, Market Test, Prototyping

A Guide to Online Market Tests for Physical Products


Digital MVPs are not only suitable for digital products and services!

"Minimal viable products and the application of the lean start-up approach sound understandable and practicable for digital products, but for physical products like ours, this is not feasible in terms of cost and effort." We have encountered this argumentation several times in past workshops and customer meetings. However, one aspect is usually underestimated: -> Digital MVPs are not only suitable for digital products and services!

When it comes to the technical feasibility, suitability and handling of a product, the physical prototype is a tried and tested tool that should also be used in the future. However, before starting with the implementation, a product idea should be tested with regard to aspects such as interest among potential customers, product variants or willingness to buy. This is where the online market test comes into play, which is ideally suited for early validation.

Perfection slows down the success of products

New products are often kept under wraps until the product is almost perfect. The aim is to avoid at all costs that customers have a bad experience with the product and that the brand's reputation gets endangered. However, in this way, we risk developing a product that does not meet the needs of the customers. On the other hand, the question that should be asked  much earlier: "Is this product really needed and is there a target group willing to pay for it?" (For those who want to delve deeper into this topic, we recommend the book Lean Startup by Eric Ries).

While the principle of rapid testing and gathering feedback has already become established in digital product development, this approach is still used far too rarely in physical product development. Yet applying this validation approach could save development time, costs and, incidentally, a lot of nerves.

Back to the recipe for success: online market testing for physical product

In the context of physical product development, people often think too complicated. It is often not considered at all that it is also possible to test physical products by means of online market tests. You definitely don't always need a finished, tangible prototype to validate aspects such as basic interest in the product, preferences for product variants or willingness to pay. 

Instead of physically building products, they are digitally visualised for the market test and marketed using landing pages and online marketing campaigns. It often makes sense to create dynamic or interactive elements (e.g. a product configurator) in order to be able to test even more product variants desired by users. So all we need is some creativity, a designer with a broad skill set in image editing, creating illustrations and mockups, and a person to implement the marketing campaigns. There is of course effort involved to design these images, illustrations and mockups and it often takes some improvisational talent, but the cost of doing so is usually manageable. Depending on the complexity of the product, the effort of digital prototyping usually amounts to a few hours or days, while the production of a physical prototype can take weeks or months and often costs a lot of money. In addition, small changes can usually be made to a digital representation within minutes, whereas a physical prototype would require much greater effort and possibly even several variants would have to be built.

Time to launch the prototype

With the help of the realistic digital representation of a physical product, an online market test can now be carried out. There are numerous possibilities for this. The basis for many tests is an attractive landing page where the product is realistically presented and explained in detail by means of a product description - as if the product already existed. The product can then be placed with a previously identified target group, for example via social media ads, Google ads or an e-mail campaign. (For more details, we would like to refer to our article Successful market entry thanks to early market testing).

Measuring success without any empirical values 

Before an online market test is conducted, the goal for it must be clear. Open questions that are to be validated are clustered by topic at the beginning. Now the hypotheses, i.e. assumptions (e.g. about the problem, solution, product, service, usability, value proposition, target groups, price, sales channels, etc.) are developed, which then need to be tested with a suitable test procedure. The hypotheses must be validatable and it must be determined in advance when a hypothesis is considered validated or when it is considered disproved.

For the determination of such criteria, own empirical values can be used, if available, or industry benchmarks can also be used. The latter requires some research. If the goal is to test the interest in a new product idea, this can be done with a social media or display campaign. For this purpose, ads with the simulated product are created, which link to the landing page that has already been developed. In order to obtain results, key figures such as click rates are analysed. Of course, it is important to think about tracking in advance in order to be able to access the corresponding analytics for the evaluation. Marketing experts usually have good knowledge of industry benchmarks and can use comparative data and empirical values to assess the success of the campaign and make conclusions.  

Avoiding reputational damage through experimentation

Especially when we work with established companies that would like to test a new product idea, the issue of "possible damage to the brand's reputation due to an unsuccessful market test" often comes up. For this reason, we often create a separate brand especially for the market test for our clients from the corporate sector. This not only has the advantage that in case it is not successful, the company's image does not suffer, but it also brings efficiency advantages. If you do not have to stick with certain guidelines such as corporate design, corporate language, etc., you are much quicker and thus achieve your results faster.

A lack of interest in a new product should not always be interpreted as "failure", but offers the opportunity to pivot the product early on and reduces the risk of developing and launching an offer that does not find any recipients. 

A little inside story...

Last year, we conducted an online market test for a physical product for a large corporate client to validate the interest of a new product idea as well as potential fields of application. Within three weeks, a new brand was created as a kind of cover for the actual company, the product was illustrated, a landing page was built and social media accounts were established. In order to better understand which applications the expected target group was interested in, a survey tool was used to develop a “configurator” that could be accessed via the landing page. This provided detailed information about how customers would put together their product. 

Within the campaign duration of one month, we were able to reach almost 2 million people with social media and Google display ads and bring more than 65,000 visitors to the landing page. Above-average click-through rates of 3.5% (cross-industry benchmark is 0.9%), extremely high landing page user numbers and a very long average dwell time were able to confirm the interest of the market for this product. In addition, we gained valuable insights into the target group and specific fields of application.

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About v_labs

We support our customers in innovation projects - as a company builder or with various innovation services (consulting, coaching, rapid prototyping, IT development). The 17 employees have many years of experience in strategy, online marketing, service design, agile project management and UX design.
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