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What is Pretotyping?

Pretotyping is a quick and inexpensive way to test an idea, product or service before committing significant resources to develop it. The goal of a Pretotype is to validate the market demand for a product in order to avoid investing time, money and resources into developing a product or making a product change that isn’t in demand. 

In current market research practices, the typical thought process is:

‘If we build it, will you buy it?’

Pretotyping flips this to be:

‘If you buy it, we will build it’

A common example of this is crowdfunding. They are showing the 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. You can also use Pretotyping to test multiple aspects of the product such as:

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 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 research

Because of the way Pretotyping works, it gathers behavioural data. All through the user journey, you are gathering data on interactions with ads, landing pages and emails to develop a full view of how your product concept is received in real life. 

The unbiased part of Pretotyping comes from the fact that users don’t know they are in a market research test at the time, as the product appears to exist and is purchasable. Once they have completed the user journey, you can let them know it was part of a test and give them a reward 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 making sure the products in development are going to meet consumer expectations and sell well, it is based mainly on opinions rather than behaviour and so can only be trusted so far.

After all:

Source: http://www.abre.org.br/wp-content/uploads/2012/06/NielsenReport.pdf

With Pretotyping, you are gathering behavioural research without having to develop any MVP, making it cost-effective and reliable in its forecast of market demand. Reducing the failure rate of new products and making sure that only the products with the requisite demand are in production. 

4. Improve existing products and launch line extensions with confidence

By gathering unbiased behavioural insights, you can trust that your consumers behaviour towards this test is in-line 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 tests process is so quick and inexpensive that you can easily test new ideas and concepts reliably within the business. There are some companies that 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 through the gathering of 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). 

How does Pretotyping work?

Pretotyping works by developing a concept of your product or service, then developing a user journey, typically with social media ads and landing pages, to analyse the behaviour of a user. 

This process helps to identify early on, the opportunities and problems your product might face. In a recent pricing test our client discovered a potential 20% uplift in the price of one of their products.

Conversion rate from case study showing increase in demand for higher prices

These insights are all gathered from unbiased consumer behaviour using Pretotyping. How that happens is that the user is not aware they are participating in a piece of market research.

There are social media ads that direct users 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 to multiple conversion steps, one of those typically being something 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 we can gather the most unbiased data possible.

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What are the differences between Pretotyping and Prototyping?

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 do something:

  • Test a product or a product change quickly and cost-effectively
  • Gather behavioural insights for your product
  • Happens before developing anything

As you can see, a Pretotype is supposed to come before any kind of prototyping, so you can validate the product concept before placing resources into developing a prototype.

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.

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 this product, you can test this opinion against actual behaviour by running a pricing test with Pretotyping.

38% of new products fail because of missing market demand.

Source: https://www.nerdwallet.com/uk/business/small-business-statistics/

This is because they relied purely on opinion-based, biased data. The problem with this 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 you go away and spend hundreds of thousands, if not millions, developing and launching a product that the consumer then decides they don’t actually want or need.

With Pretotyping you can quickly test the actual market demand which can result in you catching product failures before development. 

When should I run Pretotyping tests?

Pretotyping is able to completely replace your current market research process, however, it requires a strong sense of direction per test. With that in mind, it is best to run Pretotyping tests after you have completed your qualitative research and BEFORE you progress any products into development.

By doing this you’re ensuring that the product that gets developed has the highest chance of commercial success whilst also allowing your qualitative research to be validated.

How do you make a Pretotype?

Pretotypes can be made in many different ways to suit the purpose and product, but the main way to make a Pretotype is through fake door tests.

One of the earliest examples of a Pretotype was the Palm Pilot. Jeff Hawkins created a physical concept of his product using wood and paper, that he could then show to people and see what they thought and how they would use it. The problem with this is that it is on the boundary of a Pretotype and prototype as well as still having the issue of gathering qualitative data.

Now Pretotyping has progressed much further and primarily uses landing pages designed to show your product as if it existed and was purchasable when in reality, it’s only some concept imagery.

This landing page is an example of how you would present a Pretotype. It is a real and live landing page that you direct traffic to, the only difference is that the product isn’t in production yet. This way you can test how consumers react to your product in a real-world environment, giving you stronger signals to whether that product should reach production or not.

All you need to build a Pretotype is:

  • Traffic source (we like to use Meta and Google advertising)
  • Landing page (for consumers to see the product)
  • Skin-in-the-game (email, card details)
  • Confirmation and reward (confirm it is research and give them a reward)

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What are the steps to Pretotyping?

There are very few steps to setting up a Pretotype, 5 to be precise. These steps are:

  1. Hypothesis
  2. User journey
  3. Design
  4. Launch
  5. Insights

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.

1. Hypothesis

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. User journey

Next up is your user journey. You need to decide 3 things:

  1. How is your user going to find the landing page
  2. What you want them to do
  3. What happens when they’ve completed the journey

First off, the only way Pretotyping is going to produce results, like any market research, is by people participating in the test. The difference being 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. 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 impactful.

Next you need to think about what they do on your landing page. There are 2 parts to this really, being:

  1. What is the call-to-action?
    Is it to register an account, purchase, sign up, pre-order…
  2. What ‘payment’ or skin-in-the-game are they giving?
    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 user 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.

Finally, once they’ve handed over their details and given you the data you are looking for, what happens next? There are many options, one we like to go for is a confirmation page, so directing the consumer to a page that lets them know they are part of a test, or even let them know that the product is not available. 

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 it was a research test for a potential line extension and gave the consumer 10% off the current, existing model. 

3. Design

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
  • Email design
  • Confirmation page design

It might seem like a long list, but it is all based around the concept imagery. The rest is very straightforward, and we even have Pretotyping templates available for use.

4. Launch

Now you have everything in place, it’s time to launch the test. 

We typically find that running a test for 7 days will bring in a significant amount of data that you can gain the insights from. There are a bit more variables to it like the ad budget, but 7 days turned out to be a good guideline.

5. Insights

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.

What is the value of Pretotyping when developing a product?

When developing a product, whether it be 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, which will reduce the chance of a product failure significantly.

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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

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

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.

Faster

To set up and run a Pretotyping test takes about 2 weeks. This is from concept to data.

While that might not initially seem faster, you can get survey results in days if not hours, the difference is two-fold:

  1. It can take weeks or months of planning to get the question set right to get valid answers for a survey
  2. 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.

Cost-effective

Pretotyping budgets don’t have to be large, and you don’t have to give any incentives to consumers to get valid results. The only budget you HAVE to have is for advertising, which averages around $1000 per variant in a test - so if you were to run a pricing test with 3 different prices, you would budget around $3000 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 opinions with behaviour.

Hyper-local targeting

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 into 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.

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:

Flight

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

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.

Variant

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

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.

Single opt-in

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.

Double 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

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.

Fake door test

Fake door tests are the same thing as Pretotyping but just under a different name.

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