Market Test for Better Decisions and Results, How Lego’s New Business Strategy Doubled Sales Overnight
Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders – Episode 7
This video is part of my series - Find Angel Funding & Venture Capital for Business Startups, Entrepreneurs, & First Time Founders, learn more by visiting https://bit.ly/3hExYJX
Market testing is simple. Go out and try to sell. Calls, emails, social media, digital ads, networking are all easy ways to test your business plan.
After finishing your first set of market tests, you need to evaluate the results. It helps you determine whether your business strategy is working or not. It also saves you money down the road if you are not pursuing the right opportunity.
When it comes to assessing your results, you need to evaluate:
● Market Reaction - What do people think about your product or service?
● Sales Performance - How many leads turned into customers who bought your product or service?
● Return-on-Investment (ROI) - Are you profitable?
Ask yourself the following questions while going through this exercise.
● What worked?
● What did not work?
● What were the strengths and weaknesses?
● What did I like?
● What did I not like so much?
● What should I change about my business strategy?
● Which part of the business is perfect the way it is?
After you thoroughly evaluate your test results, you can make an informed decision about your business strategy and next steps. Do you need more market testing? Should you consider a pivot? Are we ready to move forward?
This really depends on you. If you feel like there is too much room for improvement, keep working. However, this can take days, weeks, months, or even years if you let testing and perfecting get out of control. I suggest get comfortable with an area you are making traction and move to the next step.
Remember the famous statement by Reid Hoffman, founder of LinkedIn and a member of the Paypal Mafia, if you are not embarrassed by the first version of your product than you waited too long.
Through market tests and customer feedback, Lego discovered that only 9% of their users were girls in 2008. This obviously excluded about 50% of the children’s toy market. In 2012, Lego came out with a product line known as “Friends.” These figurines were slightly larger to accommodate accessories such as handbags and hairbrushes. They were also more colorful to appeal to young girls. It turned out to be a great success, and sales for that year were double of what was projected!
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