So far on the journey to your first customer, you’ve chosen the audience you’ll target and learned the problems they’re willing to pay someone to solve.
Navigate the Journey:
It may seem like the next step would be to create your products — and it might be, for some businesses. But in an ideal world, you’ll pre-sell your product first.
You can sell a product before you make it?
Yes, and many successful businesses launched this way.
When you pre-sell your product, you sell the idea of your solution to your audience to gauge their interest and willingness to pay.
You may accept money for pre-orders as part of this process, or you may just discuss your idea with potential customers to find out if it really meets their needs.
Tiny Wood Stove, an online store selling small stoves for small spaces, is a great example. After listening to their audience and identifying a problem, they launched a crowdfunding campaign and offered pre-orders. The overwhelmingly positive response confirmed that their product would be a hit, and helped turn a single blog post into a million-dollar business.
Three reasons to pre-sell your product
1. Align with your customers’ values
Your goal is to present the idea of your product before creating it. A successful pre-sale confirms that you’ve found a valuable solution to a specific problem. Your target customers are willing to pay for it even though it doesn’t yet exist. That’s powerful.
2. Improve product effectiveness
With some money in hand from your pre-sale, you have time and resources to make the product better. You know there’s demand for this product, so it’s now worth investing in its development.
Ongoing improvements also give you something to talk about with your pre-buyers, as you share updates on your progress via email or social networks.
3. Minimize risk to your business
Any new business or product venture carries risk. With pre-sale income in hand and some confirmation that your product is desirable, you reduce your risk. You have money and have a sense of how much inventory you might need, which reduces your upfront costs and helps you make good financial decisions.
Imagine that you try to pre-sell a product, taking it to hundreds of people in your target audience… and none of them want anything to do with it. Did you fail?
No! You just succeeded in learning that if you invested time and money developing this product, hardly anyone would have bought it. So you saved time. And you saved money.
On the flip side, if your product pre-sells well, you have more confidence that people will purchase and can safely invest in marketing and product development.
Exceptions – when pre-selling doesn’t make sense
There are situations where it doesn’t make sense to pre-sell. But even in these situations, you want to minimize risk by being smart about product research and development.
1. Your customers’ values don’t align with pre-selling
If your customers value speedy product delivery – they want things now – selling them an idea and telling them they have to wait three months for an actual product won’t work.
Similarly, some customers don’t just want it now – they need it now. If your water heater is broken, you need it fixed, now. If your internet is down, you need it fixed, now.
2. You’re in a highly competitive market
In some industries, there’s already a lot of competition. Your solution may be different, or even better. But if you pitch an idea to potential customers and then inform them it’s not ready, they may just purchase an existing product.
And in this situation, a pre-sell simply isn’t necessary. If there are already other products solving the same problem, you know people are willing to pay for a solution. Go make a good product, and then market it.
How to pre-sell a product or service
There are two primary ways to pre-sell:
- Offer pre-orders. Your audience can purchase a product in advance and receive it once it’s ready. It’s a good idea to offer them something in exchange for their patience — a discount, invitations to a launch party, or exclusive add-ons — and to make the anticipated delivery date very clear. Pre-orders are often the best way to judge interest, since people are actually willing to spend their money on your product.
- Sell your idea. You’re not exchanging money in this case. Instead, the goal is to ask questions and find out if people are interested. This may be the best route if you’re still fine-tuning your idea and want more feedback before diving in further.
You can always do both! Sell your idea first and, once you know there’s some interest, offer pre-orders.
Take these steps to successfully pre-sell your product or service:
1. Create an offer
Start by designing an offer just for your audience. This could be tangible, like a discount or gift if they pre-order, or intangible, like an explanation of the product itself, including the benefits and features. Remember: the goal is to find out if people are interested in your idea and willing to pay for it.
Then, get your offer in front of your audience. Here are a few ways to reach potential customers:
Build a landing page. A landing page is a standalone web page created for one specific purpose — in this case, presenting your offer. It should be relatively simple but share information about your idea, the problem it solves, and how it solves that problem.
If you’re accepting pre-orders, include checkout functionality and be clear about when they’ll receive the product. If you just want to present your idea and gather feedback, add a survey.
A good landing page has:
- Context. You have seconds to get peoples’ attention, so make your offer immediately clear. Identify with their problem and illustrate how your product will positively impact their life.
- Credibility. Your audience needs to trust you to deliver on your idea (or physically deliver a pre-ordered product). This might mean including accreditations or experience, or just creating a landing page that loads quickly, is secure, and looks professional.
- A call to action. If you’re accepting pre-orders, use a direct phrase like “Order Now.” If you’re looking for feedback, use something like “Share Your Thoughts.”
Once you’ve created a landing page, get it in front of your audience through social media, digital ads, or email marketing.
Create a crowdfunding campaign. Crowdfunding websites, like Kickstarter and Indiegogo, connect your business to people who may be interested in your idea. Create a profile for your idea or product, showcase why it’s useful, and let people pledge money in exchange for the finished version down the road.
You can set a fundraising goal, and if you don’t reach it, everyone gets their money back with no harm done. You don’t risk creating the product before you’ve proven interest and backers don’t risk contributing to something that never happens.
The people who contribute on Kickstarter understand that they won’t receive the product right away. They’re happy to be a part of creating something that will benefit them and are willing to pay in advance to be one of the first to receive it.
Reach your audience where they gather. Connect with your audience in places where they already spend time. Attend a festival, trade show, or event where you can talk to people one on one. Join Facebook groups with topics related to your idea. Ask questions on Reddit. If you already have an established social media following or email list, open it up for discussion.
Present your idea in a poll or survey, or ask open questions like:
- Is this product something you’d be interested in?
- How would you use this product?
- Would you be willing to pay for this product and, if so, how much?
2. Test the offer
Once you’ve created your offer, it’s time to see how people respond! Did a lot of people visit your landing page, but only a few purchased? Are people excited about your idea and willing to buy down the road? Did you receive any ideas about how your product could be even better?
The most important thing here is to be open-minded. Be willing to respond to the feedback you collect and ready to adjust your idea as needed.
3. Repeat as necessary
If the feedback was positive and your audience was excited, then you’re good to move to the next step! If you adjusted your idea or even switched solutions entirely, go through the process again. Reach out to those people and see if your changes better fit their needs.
Confirm your value
Pre-selling gives you a chance to focus on solving a problem for your target audience and confirming the value of your solution. Take this opportunity to sell them on the idea so you can perfect your product and deliver it by your estimated date.
Now it’s time to create products for your excited customers!
Ready to start pre-selling?