Customer Discovery is really the foundation. Here, we dig deep to understand exactly who your ideal customers are, their problems, and what gaps they have in their current solutions. Think of this as a series of conversations—interviews, surveys, sometimes observational studies—where we go directly to the source: your target audience. Once we know who your audience is and what they want, the next step is figuring out how to communicate your product’s value in a way that really resonates with them—that’s what we call Message Discovery.
By first understanding the who and what of your audience and then knowing exactly how to communicate the product’s value, we can ensure that the product doesn’t just exist in the market but truly resonates with the people it’s intended for
Measuring Product Market Fit (PMF) is about assessing whether your product genuinely resonates with your target audience and meets their needs effectively. Here are some of the most reliable ways to measure PMF:
1. The 40% Rule (Net Promoter Score or Survey Approach)
This approach involves directly asking your customers, “How would you feel if you could no longer use this product?” The idea is that at least 40% of respondents should answer that they’d be “very disappointed” if the product were unavailable.
2.Retention Rate
Retention is a critical indicator of PMF. High retention rates, especially over 30, 60, or 90 days, suggest that customers see ongoing value in your product.
3.Customer Churn Rate
Churn rate indicates how many customers stop using your product over a given period. If churn is high, it may mean your product isn’t addressing customer needs as effectively as it could be, or your messaging isn’t resonating.
4.Customer Feedback and Product Iteration
Customer feedback is a qualitative measure but is invaluable for understanding whether you’re hitting the mark. Regular feedback loops provide insights into whether customers find the product useful and are willing to pay for it.
5. Growth Rate and Organic Adoption
A product with PMF often sees organic growth, as satisfied customers tend to recommend it to others. A high percentage of new customers coming from referrals or word-of-mouth is a strong indicator of PMF.
6. Customer Lifetime Value (CLTV) vs. Customer Acquisition Cost (CAC)
PMF is often reflected when your Customer Lifetime Value (CLTV) significantly exceeds your Customer Acquisition Cost (CAC). It indicates that customers are sticking around long enough and generating enough revenue to justify the costs associated with acquiring them.
7. Usage Frequency and Depth of Engagement
How often customers use your product and the depth of their engagement can reflect PMF. The more frequently and deeply they engage, the more likely your product is fulfilling a significant need.
