How To Understand Your Product-Market Fit

Article by:
Deniz Kuran

Head of Marketing in Idiomatic

Digital marketing Blog Ecommerce

Knowing product-market fit is one of the best ways to simplify your marketing initiatives. Determining product-market fit entails extensive market research, but the reward outweighs the exertion. Here’s a guide on how to determine product-market fit. ?

Why is Product-Market Fit Important?

Having a high-quality product is one thing, but it has to be correctly positioned to garner many sales. Product-market fit allows you to accurately position your product in front of the right people. Determining your market fit before launch will make your marketing campaigns much easier.

This means conducting research. Research must be based on your target market’s needs, product specifications, and market segment.

How To Understand Your Product-Market Fit

How to Determine Product-Market Fit

The most tangible way to determine product-market fit is by sending customers surveys. Running a survey will tell you what percentage of your customers think your product is a must-have. Surveys will also comprehensively understand your customers and their feelings about your product.

The questions you put in your surveys thus have to be tailored and should ask customers whether they’ll miss your product if it’s gone.

Multiple choice questions

While designing your surveys, ensure that the questions will better your understanding of the buyer persona. Ask for their location, demographic, priorities, and career objectives. This will paint a vivid picture of the target customer that will benefit from using your product.

Open-ended questions

Open-ended questions are good for determining how your product fits into your market. Answers are based on the individual experiences of your target customers. These questions need to encourage elaborate responses that don’t restrain customers. Open-ended questions will form deeper connections and identify underserved customer needs.

For example, if you ask customers which features they want to see in the future, you can adjust your product accordingly. This will better your chances of getting more paying customers.

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Here are some sample open-ended questions:

  • “What do you get from using [product name]?”
  • “How can we improve [product name] to meet your needs?”
  • “What made you use our product?”
  • “How is our product different from similar solutions?”
  • “What do you like most about our product?”

These are, of course, just a few examples of open-ended questions you could ask to determine product-market fit. I encourage you to brainstorm with your team to come up with additional questions (open or closed) that are more tailored to your product or service. The more specific the questions are to your niche, the more insights you’ll uncover.

Product-Market Fit Goals

This primarily applies to startups, as most fail due to spending money on products no one wants. Prioritizing and achieving a good market fit will increase a startup’s chances of success.

Understand the pain points a product solves and what your customers want to solve. This will mitigate the chances of your startup failing. So, here are six areas you should focus on:

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1. Identify your target customer

Start by identifying the customer who represents people most likely to enjoy your product. Develop buyer personas and define your ideal customer by using market segments. Marketing teams can then use this information to refine marketing initiatives.

This phase is largely about defining the buyer persona, which part of the persona is worth targeting and doing research. You then have to collate your findings in an easily digestible way for multi-level stakeholders.

2. Gather insights

Talk to existing and prospective customers to deduce their pain points and what they’d be willing to pay to solve them. Bolster this by liaising with your sales and marketing teams to identify recurrent customer complaints.

Gather enough data to provide tangible feedback. Consider in-person conversations as they’re much more likely to garner feedback that online surveys cannot.

3. Focus on a single vertical

Because startups typically have small budgets, attempting to sell your products to everyone will harm achieving your goals. Start with a narrow focus and go in depth. After positioning yourself as an industry expert in one vertical, you can stimulate spread.

4. Communicate your value proposition

Assess your customers’ needs to determine which needs can be properly addressed with your product or service. Determine how you can outperform the competition and give your customers something memorable.

It’s important to focus on your roadmap when deciding which challenges to address. Remember that not every customer challenge will align with your product roadmap and value proposition.

5. Measure product-market fit

Managing success means measuring your performance. Performance metrics will vary, so identify data points that aid performance tracking. Your first step is identifying your total addressable market (TAM). This is the total number of people who will benefit from using your product or service.

Calculate TAM by multiplying your average revenue per user by the total number of potential customers in your target market. After calculating your TAM, determine what percentage of them are current customers.

Your next step is product validation. This involves ensuring the product works and is desirable. A key part of the validation process is conducting customer interviews and surveys.

6. Avoid complacency

A mistake businesses often make is assuming they’ll always have market fit once they achieve it. Customers’ needs change over time, and to continue meeting those needs, you need to evaluate market conditions and adjust your business model constantly.

One of the best examples of complacency is Skype. In 2020, COVID-19-related complications increased the need for an easy-to-use remote communication platform. Zoom quickly identified this need and gained substantial market share, despite Skype being the “bigger” company.

Many companies are starting to use machine learning to predict the future of sales and customer behavior. They then use the information gathered to guide decision-making and better understand their financial health and future.

These six steps will increase your startup’s chance of achieving product market fit and overall success in its industry. Being clear on your product-marketing fit goals helps you fine-tune a product or service that customers truly want (and need).

Product Market Fit Example: Spotify

Following the collapse of Napster, Spotify CEO Daniel Ek, recognized the pieces required for market fit. He used this knowledge to make a platform that changed the music industry.

There was no need to create new content. Mobile devices could distribute music, and a sizeable market of users already existed. Ek determined that users in this market could pay a small fee to access a platform that could solve their pain points.

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As technology advanced, Spotify grew substantially. This was thanks to the ease of access and various technological integrations. At the time of writing, Spotify has accumulated 195 million paid subscribers. This shows the success that determining product-market fit can cause.


Here are some of the most common questions associated with product-market fit:

What is a good product-market fit score?

According to the Sean Ellis test, scores above 40 percent show good product-market fit. This is often referred to as the “40 percent rule.” If 40 percent of users say they’d be disappointed if they could no longer use your product or service, your product can be considered a must-have.

What are the best indicators of good product-market fit?

Referrals and customer retention are the best indicators of product-market fit. They show that customers continually use your product and are willing to share it organically.

How long does it take to reach product-market fit?

Reaching product-market fit can take longer than expected but should be less than two years. This is why leveraging all your options is important to speed up product-market validation.

Does achieving product-market fit mean high sales?

Once you achieve product-market fit, your product will be in a unique position to meet customers’ needs. The result of this will be organic growth in sales.

Is there a difference between the traction and product-market fit?

Traction is a reflection of whether your product works. This involves user engagement, retention, and some organic acquisition. Product-market fit refers to people who are sure they want your product and are happy with your offerings.

Determining product-market fit can raise many questions, which is a good thing. Clear and completely aligned on your product-market intentions and strategy only comes once every question is answered and fully understood.

Final Thoughts

Once you find the right fit for your product, everything else will fall into place. The interests of stakeholders will become a large part of your marketing efforts.

Remember that you can’t please everyone throughout your endeavors, so don’t try to do so. Some customers won’t be a good fit, so don’t act upon feedback that isn’t substantiated or in-depth. ?‍?

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