In this chapter we will get a grasp on the fundamentals of what Pretotyping is and the basics of it works
In later chapters we will look at how to set up your Pretotyping in more detail.
What is Pretotyping?
Pretotyping is a quick and inexpensive way of market research to understand if there's actually consumer purchase intent or interest for an idea, product or service before committing significant resources to develop or go to market with it.
Market research without Pretotyping:
If we build it, would you buy it?
Research that relies on opinions reflects hypothetical attitudes of consumers that external factors and real-life situations would influence the research cannot anticipate.
A common example of this is crowdfunding. Crowdfunding companies are showing consumers what they want to build, and if the consumer response is high enough and they put their skin-in-the-game (money in this case), that product will get built. This is the essence of Pretotyping.
Pretotyping can be used to test new ideas and products as well as changes on existing products such as line extensions or prices. You can also use Pretotyping to test multiple aspects of the product such as:
Pretotyping works by developing a concept of your product or service, and then developing a realistic customer journey, typically with social media ads and landing pages, to analyse consumer behaviour. This process helps to identify early on the opportunities and problems your product might face. In a recent Pretotyping for a price decision, our client discovered and later implemented an 11% price increase of one of their products with prior consumer-validation of purchase intent for the specific price - done via Pretotyping.
There are social media ads that direct consumers to a landing page that shows the product as it would be if it were an already existing, purchasable product. They then have the option to perform multiple conversion steps, one of those typically being like ‘buy now’ or ‘sign up’.
Once they have clicked that, they are prompted to enter an email address and confirm that email address. While they go through this process, they are tracked based on their activity on the ads, landing page and if they confirm their email address which builds up a picture of how they would actually react to this product if it did exist.
The reason it’s run like this is so product-, innovation- and consumer insights teams can gather the most unbiased data possible.
Best-practice Pretotyping setups would look like this:
Design test variants
Design your Pretotype via variants of landing pages and ads and measure consumer behaviour along the entire journey.
Collect consumer action and purchase intent data from real consumers on your Pretotyping customer journey you've just designed.
Make product decision
Uncover the behaviour of consumers to understand purchase intent and make a more informed, consumer-validated product decision.
What are the differences between Pretotyping and Prototying?
While they sound very similar, Pretotyping and prototyping are very different and come into the product innovation process at different times.
A prototype is where you develop a basic working version of your product or MVP, it might not have all of the final features or design, but it will work. The purpose of a prototype is to answer the question of “how” you should do something:
Debug the design
Make sure it can be manufactured
Gain feedback on the main direction of the product
Building a prototype takes a lot of time and resources as it is one stage away from the final product. A Pretotype however, is the opposite of this.
Pretotypes are quick to build with you really only needing some concept imagery, nothing needs to be working or usable at this stage. The main purpose of a Pretotype is to answer the question “if” you should build/do/launch/change something before actually developing or launchin:
Tests consumer purchase intent for a product or a product change quickly and cost-effectively
Gathers behavioural insights for your product decisions
As you can see, a Pretotype is supposed to come before prototyping, so you can validate the product concept before placing resources into developing an actual prototype.
What is the value of Pretotyping when developing a product?
When developing a product, whether brand new to the market or adding new features to an existing product line, Pretotyping is an essential tool to understanding the demand for that product.
It will give you real-world behavioural insights that cannot be obtained in any other way, reducing the chance of a product failure significantly.
Pretotyping Trivia: Alberto Savoia of Google
As Google’s first engineering director, Alberto Savoia led the team that launched Google’s revolutionary AdWords project. After founding two startups, he returned to Google in 2008 and he assumed the role of “Innovation Agitator,” developing trainings and workshops to catalyze smart, impactful creation within the company. Drawing on his book The Right It, he begins with the premise that at least 80 percent of innovations fail, even if competently executed. He discusses how to reframe the central challenge of innovation as a question not of skill or technology, but of market demand: Will anyone actually care? Savoia shares strategies for winning the fight against failure, by using a rapid-prototyping technique he calls “pretotyping.”
There's also a book by Alberto Savoia on the matter of building the right products with Pretotyping. More information here. In his book, he offers a strategic approach to help teams beat market failure. This approach is based on case studies, insights from his time at Google, as well as his vast experience as an entrepreneur and consultant. Some of the valuable lessons in the book include strategies for collecting your own market research, how to formulate a market engagement hypothesis, and why “pretotyping” tools are key to gauging if there is a viable market for your product or idea.
In this chapter we will look at the reasons you should be running Pretotypings in more detail, and how the testing process benefits your consumer insights and market research.
Why should I run Pretotyping tests?
There are multiple reasons you should run Pretotyping tests when trying to make decisions about new and existing products. One of the most impactful reasons to run Pretotyping tests within your market research process is to validate your opinion-based research with real consumer actions.
Where Pretotyping shines brightest is when it has strict test criteria. The perfect place to gather these criteria is from your survey research, by analysing the data from surveys and focus groups you can identify a direction that consumers say they want the product to go in.
By taking these directions, you can test what the consumers actually do with Pretotyping. An example would be, if the consumers say they would be willing to pay $20 for a product, you can test this opinion against actual behaviour by running a price test with Pretotyping, as our client Bosch did quite similarly here.
38% of new products fail because of missing market demand.
This is because they relied purely on opinion-based, potentially biased data. The problem with opinion data is that the consumer has no skin in the game for them to say they would buy your product if it were in the market has no effect on them. So teams without consumer validation spend lots of resources developing and launching a product that the consumer decides they don’t actually want or need - after launch.
With Pretotyping you can quickly test the actual purchase intent, which can enable you to catch product failures before development.
What are the benefits of Pretotyping?
The benefits of running Pretotyping tests are that you are gathering the most unbiased behavioural data possible for your new product, in a quick and cost-effective way.
1. Quickly validate product ideas
Pretotyping can gather highly valuable insights for new and existing products. In as little as a week, you can have a behavioural insight on a product, before developing any MVP, concept or prototype. All you need is some concept imagery, and you can get started. This allows you to quickly set up and run tests, so you can run more tests per product and develop stronger product propositions, or discover that the true market demand is lower than expected.
2. Gather unbiased behavioural consumer data
Because of the way Pretotyping works, it gathers behavioural data. Throughout the customer journey, you gather data on consumer interactions with ads, landing pages and emails to develop a full view of how your product concept is perceived in real life.
The unbiased part of Pretotyping comes from the fact that consumers don’t know they are part of market research at the time, as the product appears to exist and is purchasable. Once they have completed the customer journey, you can let them know it was part of a test and reward them for completing the test, such as a 10% off coupon for your store.
3. Reduce product development risk
Developing new products and extending product lines is an expensive and resource-heavy commitment. While traditional market research tries to alleviate this by ensuring the products in development will meet consumer expectations and sell well, it is based mainly on opinions rather than behaviour and so can only be trusted so far.
With Pretotyping, you are gathering behavioural research without developing any MVP, making it cost-effective and reliable in its market demand forecast. Reducing the failure rate of new products and ensuring that only the products with the requisite market demand and consumer purchase intent are in production.
4. Improve existing products and launch line extensions with confidence
By gathering unbiased behavioural consumer insights, you can trust that your consumers' behaviour towards this test aligns with their real-world thinking. This means you can easily forecast the demand for this product on launch.
You can also validate your current research using Pretotyping. By using the insights you’ve gained from your opinion-based research, you can develop Pretotype tests to find whether the behaviour matches up with the opinions.
5. Increase innovation culture
Through Pretotyping you can nurture a much more innovation-focussed culture because the test process is so quick and inexpensive that you can easily test new ideas and concepts reliably within the business. A lot of successful companies are running 100s of tests a year through Pretotyping to quickly test innovative ideas that would otherwise be put on the shelf.
6. Improve customer-centricity
Customer-centricity is at the heart of any great product and with Pretotyping you can understand closer what consumers want by gathering behavioural data. The main purpose and benefit of Pretotyping within customer-centricity is that the consumers show you what they want by putting their skin in the game (see terms at the end).
(Unfair) advantages of Pretotyping
In this chapter, we look at the advantages that Pretotyping brings for you.
What are the advantages of Pretotyping?
The advantages of Pretotyping over other types of market research vary from improvements to new ways of gathering insights completely. Let’s talk about the main 5 advantages of Pretotyping, which are, it’s more interactive, more realistic, faster and more cost-effective.
More interactive with consumers
Surveys aren’t exciting, that’s why we have to offer incentives to consumers, so they fill them out. This is because there is little interaction or journey with a survey, you just answer a series of questions, mostly by clicking a box.
Pretotyping is more interactive because it has a journey to it, from seeing an ad, to visiting the landing page and confirming details afterwards. All of these steps keep the consumer engaged in the process as it is closer to real life. This brings us to the next point…
More realistic scenarios
Typical market research such as surveys only give consumers an overview of what the product might be and rarely involve any concept imagery for the product as well. This can lead to a lacklustre experience in which the consumer has to interpret what they can from the stimulus given.
Pretotyping solves this by using systems that consumers are already familiar with and providing them more information and context about the product. This being the use of landing pages and concept images, giving them a better representation of how that product will be sold and communicated in the future.
To set up and run a Pretotyping test takes about 2 weeks. This is from concept to data and insights.
While that might not initially seem faster, you can get survey results in days if not hours, the difference is two-fold:
It can take weeks or months of planning to get the question set right to get valid answers for a survey
Pretotyping tests can be adapted quickly to test different attributes or products entirely.
Once you’ve set up a Pretotyping test once, it’s very easy and quick to keep running new tests and trialling new variants. That’s where the true efficiency of Pretotyping comes into play.
Pretotyping budgets don’t have to be large, and you don’t have to give any incentives to consumers to get valid results. We have compiled a free overview of how you should budget your behavioural research. You can get it here.
In Pretotyping, the only budget you have to allocate is for advertising, which averages around $1,000 per variant in a test - so if you were to run a price test with 3 different prices, you would budget around $3,000 for the advertising to get significant results. Keep in mind, this is only a direction of the budget - it can be lower or higher, depending on a couple of variables.
That’s not the best part of Pretotyping though.
The real savings come in when you start to attribute the cost of product failure or sunk cost that your Pretotype has avoided by validating consumer interest or purchase intent for your product with behavioural data from the Pretotyping.
Using Pretotyping and digital advertising you can reach most people on this earth, much more efficiently than with panels. Using this method of audience acquisition means you can also test your products with hyper-locality, you can target within a certain town or city if you are looking to launch a specific localised product.
Two examples of this would be if you were looking to launch a new food delivery service in a new city. You could use Pretotyping to test the demand for that delivery service within multiple cities to find the one with the highest demand.
A second example would be if you were looking to launch a new brick-and-mortar store in a city, you can use Pretotyping to test the demand for that store within the cities you have shortlisted.
How to conduct Pretotyping
In this chapter we will look at the process of setting up, running and analysing your Pretotyping, with a simple 5 step strategy.
What are the steps to Pretotyping?
There are very few steps to setting up a Pretotype, 5 to be precise. These steps are:
As you can see, a very simple process that is made to be quick so you can run multiple tests in sync. Let’s dive into more detail on each of these steps.
The first step to running a successful Pretotype test is to have a solid hypothesis. This should give direction and success metrics for the test, so that anyone can pick this test up midway through and understand its purpose and how to interpret the data.
A great template for this would be:
‘We are trying to decide X. To help us make this decision, we are going to test Y and analyse the data points Z.’
This template can be put into a more realistic example to help:
‘We are trying to decide if we should launch a blue version of our product. To help us make this decision, we are going to test 3 different colours of our product against one another and identify the most attractive ones by comparing conversion rates on the button click “buy now”’
2. Mapping out and building the customer journey
Next up is your customer journey. You need to decide 3 things:
How are consumers going to find the landing page
What you want them to do on the landing page
What happens when they’ve completed the journey after interacting with the landing page
First off, the only way Pretotyping is going to produce results, like any market research, is by people participating in the test. The difference is here is that consumers don’t know it is a test at this point, keeping the data as unbiased as possible.
The most efficient, and real-world way, to get consumers to your landing page is by running an advertising campaign with Meta (Facebook and Instagram) or Google (Search Campaign). This doesn’t have to be the best performing and optimised campaign, just a way to get consumers to the page. and already presenting your product to the audience. The best part about this is that you can nail down exactly the interests and demographics you want the consumers to come from, making the results even more valuable.
Next you need to think about what they do on your landing page. There are 2 parts to this really, being:
What is the call-to-action? Is it to register an account, purchase, sign up, pre-order…?
What ‘payment’ or skin-in-the-game are they giving? Besides clicking on an add-to-cart or signup button, are they going to just leave an email address, or is it a longer form, maybe a survey, or even card details (that you don’t store obviously)?
Once you know the answer to these questions, you know what you want that consumers to do on your page, which will make the data more or less significant. A higher ‘bar to entry’ like card details is going to have a much higher purchase intent than a lower bar such as leaving an email address. There is no right or wrong, it depends on your test objective and strategy. Disclaimer: You must not conclude an actual transaction with consumers for a product that does not actually exist. We recommend to disclose to consumers that they are in a test environment before you collect any 'payment' (email address, card details, etc.). For assistance on these matters we have a team of research consultants that could assist you in creating a compliant test strategy.
Finally, once consumers handed over their details and performed the action you are looking for, what happens next? There has to be something to tie up the journey though to ensure a good user experience. One client of ours let the consumer know that the journey they just interacted with was research for a potential line extension and gave the consumer 10% off voucher for a current, already existing product.
Now you need to design the creatives that are going to be part of this test. This will be:
High-fidelity product concept images (remember, this needs to look like a live product)
Advertising images and copy
Landing page design
Confirmation page design
It might seem like a long list, but it is all based on the concept of imagery. The rest is very straightforward, and we even have Pretotyping templates available for use. Contact us or our research consulting team for more information on that.
Now you have everything in place, it’s time to launch the test.
We typically see that running a test for 7 days will bring in a significant amount of data that you can gain insights from to answer your research question.
The data is in, all that’s left is to analyse and bring out the insights from it. The typical data you get from Pretotyping will be around click-through rate, conversion rates and submissions, like the below from our dashboard.
The best way to read this data is to relate it back to your hypothesis to understand if these results make a successful product or not. If you want to make the insights process faster, then Horizon has its own Customer Demand Score which will quickly show you which result has the best chance of success.
In this chapter we will look at examples of how Pretotyping can be used to gather unbiased behavioural data that helps you make consumer-validated product decisions.
Pretotyping test example
You can use Pretotyping for many different reasons, aspects of a product and industries. Here is an example of how you can use Pretotyping.
Testing pricing sensitivity with fake door tests
Pricing sensitivity testing with Pretotyping is the most reliable and efficient way to find the optimal price point for a product ahead of market release.
With methods such as using the Van Westendorp Price Sensitivity Meter, you ask people typically four questions to determine what price they are willing to pay for the product. This is a system likely allowing for bias because respondents aren’t actually putting any money down, or have any ‘skin in the game’. It relies on them to have an unbiased opinion on their reaction to actually wanting to buy the product.
With Pretotyping however, they believe the product is real and are willing to give something to access that. That is a higher indicator of the purchase intent for a product at that price point because it is based on real-world behaviour.
A test setup to test price sensitivity for three variants would be:
two master ads that display the price of the product
three variants of each ad
six ads in total
one master landing page
three variants, 1 for each pricing point, easily built and duplicated within Horizon, and the product price bring the only distinction between the pages
The goal of the test would be to see for which price point consumers show the highest purchase intent through the analysis of double opt-in conversions.
How Bosch was able to increase the price from 179€ to 199€ with the help of Horizon
With Horizon, Bosch was able to
Acquire behavioural consumer data and purchase intent insights at scale.
Identify a 11% price uplift opportunity for their home appliance product
Consumer-validate a strategic price decision in only 1 month.
In this chapter, we look at all the terms and definitions frequently used with Pretotyping.
Pretotyping terms you need to know
While reading this you might have noticed a few words that aren’t known to you, or are known in a different context, so here is a list of terms that you should know when talking about Pretotyping:
A flight is the best word to use when running a Pretotyping test with Horizon. It means test, but is a word used in the Pretotyping world more often than not to define the difference between a market research test and a Pretotyping test.
Skin-in-the-game is the kind of payment consumers offer as a sign of interest in your product. The concept is similar to crowdfunding projects and pre-orders, where the consumer has to give something of value to them to show their interest in the product. It can be time, data, money or something similar or even a combination of things.
In the case of Pretotyping, this is typically email addresses as that is the easiest to set up from a data privacy point of view. However, it isn’t limited to that, the more valuable the payment (like card details) the more valuable that interaction is.
A variant refers to a specific version of your product or landing page within a flight. For instance, if you were to run a flight with 2 variants, you would have one overall test but would be looking at 2 different price points, or features, or value propositions.
Attributes are the layer above variants, they are the theme of what you are testing. An example of an attribute would be price. So you can run a price test and that is the attribute you would change between each landing page.
A single opt-in refers to the initial point where the consumer makes their ‘payment’. An example would be if you filled in your email address on the landing page and submitted that form, that would be your single opt-in.
A double opt-in isn’t always used in Pretotyping, but is often a good choice to make. It is a confirmation of details that takes a little more effort for the consumer and so is more valuable in terms of interest data. An example would be once someone has submitted their email address, they need to confirm that email address, making it a double opt-in.
Click-through rate is measured at multiple points in a flight, from the advert to the landing page and then again from the landing page to the opt-in form. It measures the percentage of visitors that have completed an action and is important to note as your advert might have a really high click-through rate, but then the landing page has a very low one. It could show that your product isn’t in as high demand once the consumer learns more, it could also be fixed by running a value proposition test.