How to use social listening to find a market fit
The recent author of a breakthrough guide to product-market fit, Alex Smithers is Head of Content at Develocraft, a leading Gdańsk-based digital product agency with years of experience helping startup founders develop not just products, but viable businesses.
Social listening is usually seen as a marketers technique. It’s also most commonly deployed by established companies with budgets sufficient to fund a range of marketing activities operating in parallel.
But what if I told you that social listening was actually at its strongest way upstream? How far upstream? Strategic decision making and product conceptualization; the so-called ‘discovery phase.’
We’ll get into the details of how you can use social listening to boost market fit below, but the bottom line is that to build a product with great market fit—digital or not—you can’t make decisions based on assumptions alone. As with any business decision, you need reliable information to be at the foundation of your process.
That means listening to the market. Socially.
Stand by for social listening, and how you can use it to all but guarantee phenomenal product-market fit.
What is social listening?
Social listening, sometimes called social media monitoring, is when an entity, such as an entrepreneur or business, methodically studies the social media activity of their potential customers or clients, turns it into actionable information, and then uses it as the basis for further decision making.
To use a simple, non-tech example, a coffee shop based in Berlin might study the Instagram posts of potential customers. This might include local residents using hashtags related to coffee, or even tourists visiting the city using hashtags or location tags establishing their interest/presence in the city.
But to be truly effective, the social listening the owners engage in should go beyond the surface level. ‘Coffee drinkers like coffee’ is clearly insufficient. What might our Berlin coffee shop want to pay attention to?
- Aesthetic preferences that appeal to target customers. For coffee shops, that applies to their in-house environment—such as decoration and lighting—as well as how they present their products.
- Industry-related opinions that they may express. These may pertain to thoughts on the overall market, their frustrations with it, their hopes for its future direction, as well as gripes and praise for your direct or indirect competitors. What do most coffee shops do too much, or not enough?
- Evaluations of existing products already on the market. Beyond branding and the overall shape of the market, there’s still the quality, function, and utility of specific products that are already available. Even if there’s a gap to be filled with a new type of product that does things a little differently from the consumer’s existing options and you bring that original solution to market, you may undermine your own efforts if you skip over the preferences of users. Do the people want more options with coconut milk instead of almond milk? Our example coffee shop should give it to them.
- Opportunities to leverage advantages that you may have. In a crowded market filled with competitors each conducting research revealing similar insights about consumer preferences, standing out in some way can make a huge difference. In the world of tech, this might include unique intellectual property you own that could allow you to solve your users’ problem faster, cheaper, or more effectively. In the world of coffee, this could be as simple as adding local touches to your offering that tourists will appreciate and post to their own social media, boosting marketing.
Side note: the selection of Instagram in this example or even the choice of using social listening as a basis for key decisions about market fit presupposes that your ideal customers (or users) are also active social media users.
Or at least a representative subgroup of them are.
With that in mind, try to establish the social media habits—if any—of your users before making social listening part of your decision making process.
What is market fit?
Now we’ve introduced the key concept of social listening, it’s time to explore the concept of market fit. What is it? Why care? Let’s find out.
Market fit definition
- A need—often called a ‘gap’— in the market that you can remedy at least as well if not better than your competitors.
- A sufficiently large and affluent group of potential customers, clients, or users for you to monetise such a solution and achieve sufficient profit that the effort and investment necessary to achieve it will have been worthwhile.
- The issue your product addresses should be enough of a priority that ongoing demand will exist for your solution in the long term.
- The product or service you bring to market should effectively solve the problem—or fulfill the desire— from the perspective of the end user at a price, with an investment of effort, and within a timeframe that they are willing to accept.
Why you need to read this. All of it.
Every business that has ever succeeded has done so because of market fit. This applied to the Venetian merchants of the fifteenth century hawking Turkish coffee to under-caffeinated German traders just as much as it did to Google making this hot new thing called ‘the Internet’ accessible to the mid-western amateur golfer of the late nineties.
There are no exceptions. This applies to your business. Ignore it at your peril.
Of course, some businesses have stumbled onto market fit entirely by accident and without preparatory market analysis. This ‘tactic’ may appeal to day dreamers more interested in spending the day imagining their future profits rather than guaranteeing their arrival. Is that you? Make sure that it isn’t. Read on.
So instead of merely hoping that your idea alone is genius enough to birth an industry transforming mega unicorn, put yourself in a position to actually make it happen by getting to grips with building product-market fit.
Market fit: it’s not something you find. It’s something you build
We’ve spoken already about the need to “find” market fit, but that’s probably not the best verb to describe this process. The really important thing to take away from this article is that establishing solid product-to-market fit is an active process.
It’s not as easy as pointing to a market and saying ‘a gap exists here.’
Think instead of yourself restoring a broken old ruin of a classic car that you’ve bought from a junkyard for $50. That busted up wreck is your first idea about how your product connects with the market. Although the structure and basic form may be salvageable—but no promises—there’s still a lot of work to be done before you’ll be the proud owner of a beautiful, shiny vehicle.
You’ll start with a core idea of how your product relates to the market. Then, through research that will include social listening— and possibly other methods—you’ll refine it. You can do this either by making changes to the product, by changing the market segment you’re aiming for, or both.
You might, for example, find that the customers you thought would want your product actually have a very different view of what constitutes an effective solution to the core problem you’re trying to solve.
At that point, you could either alter your product so that it fits with what these potential users are looking for, or you can find a new set of users who may find your product helpful. You could even go right back to the drawing board. That can be progress, too.
Of course, you could try to convince your original target market that your product really is right for them in its current form through aggressive marketing and sales. However, in my experience, that’s an expensive uphill battle that is best avoided.
Instead, focus on delivering a product that your end user will fall in love with because it’s what they want – not what you think they should want.
Why social listening is good for building product-market fit
Social listening is in many ways the ideal tool to make sure your product and target market align. Why? The core reasons are that:
- People tend to post about things they feel strongly about, making it an ideal environment for discovering not only the preferences of potential users, but their strongest preferences.
- Social media users know that clear, strongly worded, and emotive posts get better engagement, so are unlikely to mince their words. This differs from a focus group, who may feel obliged to say ‘nice things’ so as to be ‘polite’. Social media, by contrast, is comparatively unfiltered.
- You can see real time changes in people’s views about new developments in the market and even see how they respond directly to the activities of your competitors as well as your own. Being able to see what plays well and what doesn’t can help inform your strategy as you bring your product to market.
How to use social listening for market fit
The approach you take will ultimately differ depending on whether you’re a new startup launching your first product, or an established company with products already on the market that your target users may already be familiar with.
However, for those new to social listening, the first steps are the same. It’s also remarkably easy to get started.
You can absolutely benefit from an AI powered advanced social listening system like the one provided by SentiOne which will make the work much faster and easier, but you can still get started and achieve some useful results manually. Just expect it to be a lot of work. But as in most things in business, the more you put in the more you’re likely to get out.
Getting started with social listening: market segmentation
Build your understanding of who your users are, either as a single group or a selection of subgroups. This is called market segmentation. To do this via social listening, you can follow these steps:
- Select industry specific keywords that are likely to come up when discussing issues, competitors, news, and other phenomena directly relevant to your product. If you’re unsure of where to start, there are plenty of free and paid tools out there to identify useful keywords. As a starting point, you can give answerthepublic.com a try.
- Search social media platforms such as Facebook, Twitter, or Instagram using the keywords you identified.
- Record various useful types of demographic information that you can identify. Some platforms make this easier than others, and an automated tool like SentiOne’s will make this much faster. Examples of the kind of info you want to gather include gender, geolocation, lifestyle, profession, preferred sources of information, and so on.
The more systematic you can be, the better. The best social listening tools largely automate this process, collecting data in a consistent way and presenting it to you in a way that is easy to interpret. If you’re going full DIY, you can try using spreadsheets to make sure you’re being methodical.
Improving your product with social listening
The traditional route to getting feedback on a product is to conduct a survey and, less frequently, set up a focus group. Both have major limitations, not least because:
- The easiest people to get answers from are often intrinsically and perhaps unconsciously biased in your favour.
- Soliciting input from a representative sample of users can be tough. Very few people are willing to spend their time answering survey questions. This leads to survey results with questionable value, as those who participate tend to share certain characteristics in common that are likely to make them collectively an unrepresentative sample of the group who you’re actually interested in.
- Countering this phenomenon with paid incentives or rewards can encourage a higher uptake, but this in turn is likely to introduce other biases into the data. The effect will be more severe depending on the market segment you’re targeting, and it may be the case that your ideal user is one who takes paid surveys. But if not, this group is likely to introduce further ‘noise’ that will disrupt your analysis by bringing along other characteristics that differentiate them from your target market.
If you think these effects are potentially hugely problematic for your product-market fit, you’re right. The risk of introducing incorrect assumptions by using these methods is high.
If you’d rather build market fit based on accurate information, you can deploy social listening in the following steps:
- Take the output of the market segmentation phase and search for relevant mentions among the target group with the keywords you identified.
- Record and collate the information yourself in a spreadsheet or use a tool like SentiOne to automate the process. Focus on sentiment related to factors that may affect demand for your product. For example, what proportion of mentions of a competing product’s feature are positive vs. negative? What is the most common complaint?
- Take this information and use it to adapt your own product. You may have found that some aspect of a competitor’s product was a frequent source of frustration among their user base. Identify what customers didn’t like about it and make sure you don’t make the same mistake.
Time to make it happen
Congratulations! You made it to the end. As a result, you now understand the tremendous value of social listening, some of the advantages it offers over other forms of market research, and how you can deploy it to make sure your product fits your market.
If you’re ready to back your business by putting this information to good use, you can book a demo with SentiOne right now to see it in action.