What are market tests and how can you use them to develop better go-to-market strategies?

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Neya Abdi
February 23, 2024
min read
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The world is shifting away from data mining and toward decision intelligence. With datasets growing larger than ever, it’s become more important for people to query large datasets for the information they need rather than sifting through bits and bytes in the hopes of finding something great. This is especially true for startup and scaleup founders who need insights that will transform small investments into major growth. 

Yet when people think of querying a large data set, they often think of jumping on a tool like ChatGPT and asking, “Please present me with a multi-million dollar startup idea that only involves a few thousand dollars of startup capital.” 

A more efficient and effective way to use all of the digital technologies available today is to view the flesh-and-blood people who show up online every single day as your “big data” to query. And you can do this through market experiments or market tests. 

What are market experiments? 

Market experiments, or market tests, are a way to use the digital tools available to test a theory or hypothesis. If you wanted to build a B2B product, like a global payroll management solution for vendors, or a B2C product, like turmeric-orange juice, you’d start your business with some key assumptions: 

  • That there’s a need or want for this product or service
  • That you know how to talk about this product or service

What do we mean by the second point? 

Well, you may talk about your product or service one way while your market thinks about it another way. People scroll through online content at the speed of light, so there may be a significant difference in how people react when you compare “contractor invoice management platform” and “global payroll management platform.” Similarly, “turmeric-orange juices” and “inflammation-reducing, Vitamin C packed juice” can also mean the difference between someone continuing to scroll and someone stopping to learn more. 

Most marketers already know that it’s important to highlight benefits over features and that words matter. But they are using pre-digital economy thinking when there are so many more resources available. Even if you have an incredible product or idea, if you’re using outdated technologies to market it, you won’t reach the right number of people to market it. 

It would be like trying to build a career as an online influencer by sending Poloroids of yourself in the mail to everyone in your neighbourhood. Or trying to conduct business development for your new SaaS platform by sending out black-and-white pamphlets to the few remaining fax machines in the world. 

So what is the equivalent of using fax machines and Poloroids when it comes to finding the right way to position your product in the market? Using broad strokes techniques like market research and surveys. These are important tools, but they are often expensive and can eat into a significant chunk of your budget when you’re just getting started. Plus, they may be more useful for larger market opportunities. 

Today, the availability of digital tools and global talent means that if you can find a niche segment with a niche need, you can build a multi-million-dollar or even billion-dollar company in a space that isn’t big enough for the bigger players with their bigger budgets to focus on. 

But how do you find these niches? 

You start by finding niche ways that people think about different products or services. 

Testing your way to the magic market words

Competing on product and feature differentiation is harder than ever. Obviously, you need to deliver a good product. But the access to capital, technology, and talent available today means that hypercompetition is more related to experiences than they are on net-new technological innovation. And so if you can figure out that a specific audience highly identifies with a particular community or worldview or set of values, you can tailor your product to meet that emotional and intellectual need. 

The thing is, most people are not conscious of these belief systems. And so the best way to do this is to present different ways of thinking about a product or service to the market and then see what resonates and among whom it resonates. 

How to run a social media experiment

Form a hypothesis

First, come up with a specific theory or hypothesis. For a social media test, your hypothesis might be that people will buy a product that is presented to them as “Compliant global payments to contractors in a few clicks” or “Reduce inflammation with our Turbo Turmeric Orange Juice.” 

Then, come up with alternatives to these assumptions. For instance, you might think that describing your product as an “International payments platform for the digital economy” or “Vitamin C Smoothies for Clear Sinuses” is more likely to get results. 

TIP: If you’re having trouble coming up with unique value propositions, Heatseeker can help. It scans your website as well as your competitors’ websites to get a handle on how the market currently understands the problem you solve and the solutions you offer. It uses this competitive intelligence plus trends analysis to generate a number of different value propositions. 

Identify your target audiences

Second, consider who you want to target your ads towards. Depending on the social media platform you use, there are all kinds of targeting options. For instance, on LinkedIn, you can target people based on their company, their education, their interests and traits, their job experience, and their demographics. During the process, you may discover that the people who click on your ads predominantly fall into a specific group, signalling that they might be a good group to focus on in the early days of your business when you need to get traction. 

TIP: Heatseeker automates the process of running social media experiments. It will take your auto-generated, data-driven value propositions and pop them into a LinkedIn ad campaign that runs for a little over a week to discover which version of your value proposition gets the most engagement from online users. 

Select the type of experiment you want to run and establish a control

There are all kinds of different social media experiments that you can run. One of the most popular types of social media experiments is an A/B test. This is when you put up the same asset, such as a paid LinkedIn, and then change one variable, such as the copy, to see which one performs better. 

TIP: Again, setting up the right parameters for your tests and tracking all of them in different spreadsheets can be a hassle. Heatseeker’s goal is to let you focus on the big picture and the creative thinking while our platform automates the process of validating those decisions. 

Analyze the results and run follow-up experiments

The best market testers know that their first set of results is just the beginning. Once they receive the results of their first test, they use those insights to further refine their hypothesis. They also use follow-up tests to confirm other elements, like the audience they should be targeting or the imagery they should be using. Eventually, these teams get internal benchmarks that are specific to their company that they can use for future experiments.

Market testing is going to become a standard part of go-to-market strategies and pitch decks

Right now, market research is a rather expensive thing to spend money in the early days of a startup. But just like having a website or accepting online payments eventually became a standard part of doing business, so too will running market tests to validate all decisions. AI-powered market tests won’t replace human creativity and imagination. Instead, it will ensure that businesses focus their creative energy on the areas that consumers are most interested in. 

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Neya Abdi
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