In this article we present some methods for measuring product-market fit.
Product-market fit is indispensable for the success of a start-up. If customers do not accept the product and the demand is not there, founders know that they have not achieved the product-market fit. On the other hand, it is quite straightforward to find out that you have achieved the product-market fit.
If demand for the product is high enough to make it profitable and customers are satisfied enough to keep paying for it every month, you have achieved Product-Market Fit. (Read more about PMF here)
But what's not so easy is knowing where you are on the path to product-market fit. Are you moving in the right direction? Are you moving at all? You can measure that with different methods.
The NPS is a tool for measuring the target group's satisfaction and willingness to recommend the product. The customer rates a question on a scale from 0 to 10. The question usually revolves around how likely they are to use or recommend a product.
The calculation of the NPS is based on 3 different response types:
The NPS is determined by subtracting the percentage of detractors from the percentage of advocates. To assume a sufficient product-market fit, the NPS should be 40 or higher.
Although an NPS is a good start to measure how close you have already come to product-market fit, it is not enough on its own. Another question is needed:
How would you feel if you could no longer use [product]?
For this question there are these 4 answer options:
This way you can find out what value your product has on your customers.
The 3rd metric to measure is customer satisfaction. This can be determined with the following question:
How would you rate your overall satisfaction with [product/service]?
There are these answers to this question:
Surveys like this and the NPS surveys can usually take place via email or pop-up on the website. A personal conversation with the customer, e.g. by telephone survey, is another way to survey the customer.
Communication with the customer is an important part of measuring product-market fit. If customers are not satisfied with your product, they will not buy it and the product-market fit will be far away.
Contact us and let us advise you in a non-binding strategy discussion.