Step 2: Evaluate, Fix & Iterate

You did it! You launched your first product (or service, or other revenue channel). Congratulations. We hope you’ve taken some time to appreciate that you accomplished something very few people ever have the courage or work ethic to pull off.

Now it’s time to evaluate the results of your product sales so far, and to look at the future prospects to help you decide what to do next.

Make sure you have at least completed all of your planned launch activities before continuing here.

There are three possible scenarios here:

1). You have made zero sales of your product so far.

2). You have made one or more sales, but the revenue is not above your “ramen profitable” threshold yet (or you’re at ramen profitable but don’t feel the revenue is stable enough to grow).

3). You have already earned enough revenue to support yourself at a basic level and feel confident that you can grow the business further.

If you’re in the third camp, nice work! You have proven your hypothesis about your customers’ needs, you’ve built a product they want, and you’ve figured out how to reach enough of them. You can now move on to the next stage: Growth. In that stage, we’ll help you turn this MVP into a full-fledged product and sustainable business.

If you’re in the first or second camps, we’re now going to evaluate your situation and help you make a plan for getting to the growth stage.

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Evaluate

When your product doesn’t sell, there are only three things that could be wrong:

1. You failed to identify a strong enough customer desire.
2. You haven’t reached enough potential customers, or there are not enough people in your target market.
3. Your product isn’t attractive to your potential customers.

To improve your sales and graduate to the growth stage, we need to evaluate, fix and iterate. You could be facing one, two or three of the issues above.

Conversion Rate

The first step in evaluation is gathering data. You need both qualitative and quantitative data.

Open up whatever analytics software you’re using (like Google Analytics), along with your sales data from your shopping cart or payment processor. Try to answer the following questions:

• How many people have visited your product’s sales page?
• How many sales have you made (during the same period)?

Divide the sales by the number of visitors, and you’ll get your conversion rate. For example, if you had one sale and 100 visitors, your conversion rate would be 1%.

Now, there is no such thing as a “good conversion rate.” Every product is different. We’re only looking at this to help understand whether your problem lies in #1, #2 or #3 above.

For products or services priced under $1,000:

• If the total number of people who have visited your sales page is less than 400, you need to reach more potential customers before you can get an accurate picture of how attractive your product is.
• If you cannot get 400 people to visit your sales page, despite significant marketing efforts, you likely haven’t identified a strong enough customer problem, need or desire.
• If 400 or more people have visited your sales page, and your conversion rate is less than 1 out of 200, you are either reaching the wrong customers, or your product isn’t attractive enough to your potential customers.
• If 400 or more people have visited your sales page, and your conversion rate is 1 out of 200 or more (0.5% or greater), you’re in good shape, but you likely need to both improve your product and attract more potential customers.

For products or services priced over $1,000:

• You may not have quantitative data like this, and even if you do, conversion rates aren’t an accurate measure of your product’s effectiveness at this stage. Continue on to the customer feedback section next.

Customer Feedback

In addition to hard analytics data, you also need to gather customer feedback to accurately assess your situation. Customer insights can uncover product issues you might not spot yourself.

We recommend surveying both customers and visitors who didn’t purchase. Develop two different surveys, one for each group.

To reach visitors who didn’t purchase, you’ll need to have an email list of prospects, or you could post something on your blog or mention the survey in a podcast episode.

The goal here is to find out what people like and don’t like about your product or service. You should ask questions like:

• Tell me briefly about your experience with problem or topic the product addresses
• How would you describe product/service name in two sentences?
• What did you like most about product name?
• What did you think product name was missing?
• Do you think product name is fairly priced?
• What change to product name would make you consider purchasing, if any?

Adjust Your Hypothesis

Now, with data in hand from your analytics software and customer feedback, it’s time to adjust your business hypothesis.

Again, there are three potential reasons your product hasn’t sold as much as you would like:

1. You failed to identify a strong enough customer desire.
2. You haven’t reached enough potential customers, or there are not enough people in your target market.
3. Your product isn’t attractive to your potential customers.

You need to identify which of these issues you’re facing. It’s possible to have more than one of these problems.

Write a statement that defines why you believe your product hasn’t sold as well as you wanted it to.

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Fix

Once you’ve created a hypothesis about why your product isn’t selling, you need to make a plan for fixing it.

If you failed to identify a strong customer desire, how will you find one?

If you haven’t reached enough potential customers, or if there aren’t enough in your target market, how will you find more of them?

If your product isn’t attractive to your potential customers, how will you make it more attractive? Think about features, pricing, packaging, and your overall offer.

You also need to assess whether your current product idea is viable enough to repair, or if you need to consider building an entirely new product. This is known as a pivot or persevere decision, and there is no right answer or clear test for when you should push on, and when you should cut your losses. Keep this option in mind if you’ve tried to fix your problems repeatedly without making progress.

Create and execute a plan for fixing the problems you identified.

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Iterate

This stage is meant to be iterative. You evaluate your current state, develop a hypothesis about why your product isn’t selling well, fix the issues, rinse and repeat.

The important thing is that you work to learn something with every iteration. Progress may come slow at first, but as long as you’re learning about what your customers want and how you can provide it, progress will eventually come.

This stage is complete when you’re earning enough to support yourself at a basic level. That doesn’t mean you’ve quit your job necessarily, but if you absolutely had to live on revenue from your business, you could.

Questions? Bring your situation to the forums or an upcoming Fizzle Friday, and we’ll do our best to help you get unstuck.