Monday, March 25, 2013

Identifying Who Will Use Your Product - Niche Market

Before you get started on your product idea, you should think about who you are building the product for. Ask yourself, "who is going to use this?". Spend time to really narrow this down to a subset of a subset of a subset. The smaller you can get this group of people the better!

I'm going to use an example of a product idea and how you would find the target market and how you can use this information to help build and launch your product.

The "Finding Bus Routes" Mobile App

My example for a product idea is an app that helps people get to a certain location by finding nearest bus times and bus routes to get you there. The premise is simple, open the app, put in your final destination, and it tells you what bus stop to be at and at what time to best get to your final destination.

Identifying Who Will Use the App

Now that we have a basic idea, let's sit down and really think about who is going to use this app. Conventional wisdom might say to poll bus drivers to see what type of people use the bus most frequently. But this is the type of wisdom that gets you a cool app that nobody uses!

Let's look at two people that could use the app.

The Frequent Bus Rider

The frequent bus rider is someone who uses the bus everyday for their normal transportation.

Percentage of Market:
80% of bus riders fall into this category
Likelihood to Use the App:
The likelihood of the frequent bus rider to use the app is unlikely. Since they ride the bus everyday they probably already have the routes memorized and have no use for the app.

The Vacationer

The vacationer is someone that is visiting the city and using the bus as their form of transportation

Percentage of Market:
10% of bus riders fall into this category

Likelihood to Use the App:
The vacationer is probably very likely to use the app. They do not know the bus routes and are in a foreign city where they are needing as much assistance as they get.

Who Is Our Target?

Looking at those 2 categories, you might be thinking it's a no brainer to go after 80% of the people instead of just the 10%. But by taking into consideration of the likelihood that they would use the app, you can see that out of those 80% of people, not a lot (if any) will actually want to use your app! Do the math, is 1% of 80% better than 50% of 10%?

Profiling Our Target User

Now that we've identified that the vacationer is our target user, the next thing to do is figure out everything about the target user so we can break down our demographic even further. Let's just list the things we think we know about them:
  • Visiting the city for a limited time
  • Traveled from another city to get there
  • In the city to see the sites!
  • Traveling on a budget (bus is cheaper than a cab and most other forms of transportation)

How to Use Our Target Demographic's Profile

Now that we have listed some general information about our target user, we have a better profile of a small demographic of people. We can now use each piece of this information to answer some of our key questions when building the product and trying to sell it. Let's look at what each piece of information tells us and how we can use it.

Visiting the city for a limited time

Since they're in the city for a limited time, we're not going to have to focus on features that allow you to save your destinations, since they're probably going to just visit them once.

They are likely to use your app for a limited time. This is important to know because you'll need to figure out a way to retain these customers AFTER they leave the city, and most likely uninstall your app. One way to overcome this is to get their email address. You can use this to still reach them, even after they have uninstalled your app. 

Traveled from another city to get there

This is pretty important to know when it comes to marketing. You're not going to want to target people in Chicago with ads that say, "Help get around Chicago!". Instead, you'll probably target people in Chicago with ads that say "Going to California?".

If you have affiliate ads running in your app, you probably don't want to have things that only locals would want. For example, "$10 off your next haircut!" is not going to do very well, however, "$10 off the local museum" is going to sell much better!

Another way to use this, is by adding a feature to quickly get back to the airport or train station. 

In the city to see the sites!

There is a lot that this gives us, but the most important is that they want to see the sites! So you want to build features that help them get to the landmarks in the city easily. Maybe even a 'scenic' route to the destinations. Perfect for the vacationer, not the best for the person riding the bus everyday to get to work.

Another thing to think about, is since this is your target demographic this is also the best place to market your app! By putting up fliers around the city's landmark destinations you are going to attract a lot of ideal customers at those places.

Traveling on a budget

This one is a bit of a stretch, but should be considered nonetheless. You're not going to want to advertise at that high end restaurant that takes months to get into and is $100 a plate.


There are some many things to consider with this example, but you can see that without doing this exercise, you could easily lead down the path of creating an app for person taking the bus to work everyday, since they are after all the highest percentage of users that use the bus!