Product-Market Fit is a measure of how well your product meets the needs of your customers. When your product fulfills a need, you have a sustainable model for fulfillment, and you have a solid customer base, then you have achieved product market fit.
There are a couple of challenges to identifying product market fit. The first and most obvious is not understanding your customers. This can be solved by getting closer to your customers, gathering data about them, and responding accordingly. Another challenge is confusing problem-solution fit for product-product market fit. Even if you accurately identify a problem customers face and develop a solution for that problem, there are other factors, such as fulfillment, size of customer base, the opportunity for recurring customers, and the ability to access the right customers... that is to say problems on the "market" side of product-market fit, problems around marketing your solution, and problems on the operations of your business – all of which still must be solved. Confusion around product-solution fit often includes the mistaken belief of "build it and they will come".
- Product-Market Fit Score
The basic format of this question on a survey looks like this:
How would you feel if you could no longer use this product?
Not disappointed (it isn't really that useful)
N/A - I no longer use this product
The goal of this question is to discover if the PMF is good enough to support growth. Most agree that there is a correlation between a 40% response rate of "Very Disappointed" and strong traction.
- Net Promoter Score
This is the question format for the NPS:
How likely are you to recommend this product?
Provide a scale of 1 -10.
The goal is to have the respondent answer with a seven or higher. This indicates someone who is willing to promote this product on your behalf. There is strong evidence that NPS correlates with business outcomes. There is a weaker correlation between the NPS and future company growth.
- Customer Satisfaction
This question is very simple. You merely ask, "How satisfied are you with BLANK?" This could be a particular feature or the overall product or brand. Then provide a scale. Customer satisfaction is highly correlated with brand loyalty.
- Retention Curve
The retention curve is a visual representation of the number of engaged customers over time. This is calculated by dividing the number of current customers by the total customers at the start of a given period. It will show you whether your rate of retention is increasing, flattening, or decreasing.
- Churn Rate
The churn rate measures the rate at which customers stop doing business with a company over a given period of time. A high churn rate could indicate customer dissatisfaction. This may mean that you have a bad product. It could also mean that the customer had different expectations, in which case your product may be great, it just doesn't fit their need. Exit surveys are really helpful in determining which scenario is happening.
Data Collection Mechanism
- In-app feedback
If your product is an app, you have the opportunity to include in-app feedback. This could be subtle, something that can easily be closed or skipped over, or more overt, something that prevents the user from proceeding until they provide feedback. You can also ask for feedback after certain periods of time, milestones, or actions. Be careful about how frequently you ask for feedback and how overt the request is.
- Website intercepts
A website intercept is an online survey that allows you to ask visitors about their experience. It is basically the same as in-app feedback, except it occurs on your website. Similarly, it is important to be thoughtful about the questions you ask, how frequently, and how inconveniently. Treat your users like guests on your website.
- Email and SMS
Both of these mediums are great opportunities for requesting feedback from your customers. Most of us are careful about when and how we share our contact information – phone number even more so than email – so respectfully consider how you will interact with your customers via these tools.
Surveys are often requested in a product as well. This could be extra marketing material included with the product with the opportunity for submitting your response. This is frequently done on receipts after shopping or after patronizing a restaurant. All of these are great opportunities for engaging with your customers.