Market research..how?
Discussion
I am basically a free-lance researcher mainly developing staff selection systems for various public sector organisations (yes I know very niche).
In the course of my own work and between other jobs I have spent the last 3 years developing an online psychometric test which in 2 large trials ( one of mine and one independent trial completed by a university) seems to work very well. So well in fact that I think it has wider potential and could be a money spinner.
I won't spill the beans on the exact nature of the test just yet as I think it tends to detract from the debate I want here, but I have reached a watershed in its development. In essence it aims to spot staff who will cause problems or present a risk to the organisation and their clients and can be used in selecting new staff, identifying those for promotion or as a developmnetal managemnet tool. It seesm to be able to spot a range of things that can dangerously derail people at work. It now needs to have all the various aspects of the test ( the test itself broadening to test for a range of dangerous predilictions, the administration, scoring and feedback) and put into one online package. This might prove to be a 5 figure bill. I did get some immediate interest from HR consultants after a recent unsolicited press article but the product wasn't an a form where I could sell it as a standalone package as it was still essentially a research tool.
I have a test publisher who tends to develop the software etc for publish anything that I develop and then take over the marketing, sales etc ( I then get a % of useage). They are an international company who sell in many languages. The other option I have is to develop and market it myself and manage the marketing, sales etc myself and take all the risks/income but also commit my time to it.
Whatever option I choose I need to know the realistic potential market.
I have never been in this position before.
The question I have, is how do I sketch out the potential market and set the price to use it? I could ring HR managers in the public sector and see how they respond, but I think they will all say 'wonderful' but that might not reflect the reality of introducing what can be quite a controversial kind of testing ( ie negatively slanted raher than the usual positive tests).
Very interesting!
Also very niche - and if it works - extremely useful.
As you will be aware the 'licencing' way forward though a large company will get a small percentage from a lot of sales. If you do it yourself you will get 100% from less sales... to start with anyway!
There are pros and cons for both. My personal worry is that with marketing company X developing it you really are a slave to how good they are and how much effort they put in.
The 'idea' has passed the test with me certainly, and if the cost was feasable I would use it myself when hiring. Of course, your potential market is any business - and it doesnt even have to be in the UK... so in effect guessing the size of the potential market is an exercise only as your main limiting factor will be how best you can get around and let them know about it.
I would say your main focus should be the product/package development. What does it cost? Per month or per use? How will you get the test to the tester? etc For example, if the test cost £100, then this limits the number of tests carried out to probably only those at final interview stage, if at all. If the test was £1, then every company who knew about it would probably use it to weed out people before interview!
Secondly your focus should then be the 'selling' of it. Wisdom might suggest that the companies who do the most hiring are the agencies, however looking at the motivations they have, they really have not much financial interest in 'negative' testing - in fact quite the opposite!
Also very niche - and if it works - extremely useful.
As you will be aware the 'licencing' way forward though a large company will get a small percentage from a lot of sales. If you do it yourself you will get 100% from less sales... to start with anyway!
There are pros and cons for both. My personal worry is that with marketing company X developing it you really are a slave to how good they are and how much effort they put in.
The 'idea' has passed the test with me certainly, and if the cost was feasable I would use it myself when hiring. Of course, your potential market is any business - and it doesnt even have to be in the UK... so in effect guessing the size of the potential market is an exercise only as your main limiting factor will be how best you can get around and let them know about it.
I would say your main focus should be the product/package development. What does it cost? Per month or per use? How will you get the test to the tester? etc For example, if the test cost £100, then this limits the number of tests carried out to probably only those at final interview stage, if at all. If the test was £1, then every company who knew about it would probably use it to weed out people before interview!
Secondly your focus should then be the 'selling' of it. Wisdom might suggest that the companies who do the most hiring are the agencies, however looking at the motivations they have, they really have not much financial interest in 'negative' testing - in fact quite the opposite!
JustinP1 said:
Very interesting!
Also very niche - and if it works - extremely useful.
As you will be aware the 'licencing' way forward though a large company will get a small percentage from a lot of sales. If you do it yourself you will get 100% from less sales... to start with anyway!
There are pros and cons for both. My personal worry is that with marketing company X developing it you really are a slave to how good they are and how much effort they put in.
The 'idea' has passed the test with me certainly, and if the cost was feasable I would use it myself when hiring. Of course, your potential market is any business - and it doesnt even have to be in the UK... so in effect guessing the size of the potential market is an exercise only as your main limiting factor will be how best you can get around and let them know about it.
I would say your main focus should be the product/package development. What does it cost? Per month or per use? How will you get the test to the tester? etc For example, if the test cost £100, then this limits the number of tests carried out to probably only those at final interview stage, if at all. If the test was £1, then every company who knew about it would probably use it to weed out people before interview!
Secondly your focus should then be the 'selling' of it. Wisdom might suggest that the companies who do the most hiring are the agencies, however looking at the motivations they have, they really have not much financial interest in 'negative' testing - in fact quite the opposite!
I know that the typical personalty type testing costs about £30 a pop and the author will typically get 7.5% to 10%. I think the mass/bulk market is hard to hit because you shouldn't really be using it as a simple screen (and at £30 t time it is too expensive), it should be used to target subsequent interviews and references so it will likley have a use at the interview stage. Alos, bulk screening with thios test as the only tool would probably mean a life in Employmnet Tribunals justifying sifting someone out. Better to use it to target subsequent stages where you then have corroborative evidence. We do currently sell an intial 'competency based' screen at £7 a time and sell between 6000 and 16000 a year of them but the research base for that is much stronger and defensible.Also very niche - and if it works - extremely useful.
As you will be aware the 'licencing' way forward though a large company will get a small percentage from a lot of sales. If you do it yourself you will get 100% from less sales... to start with anyway!
There are pros and cons for both. My personal worry is that with marketing company X developing it you really are a slave to how good they are and how much effort they put in.
The 'idea' has passed the test with me certainly, and if the cost was feasable I would use it myself when hiring. Of course, your potential market is any business - and it doesnt even have to be in the UK... so in effect guessing the size of the potential market is an exercise only as your main limiting factor will be how best you can get around and let them know about it.
I would say your main focus should be the product/package development. What does it cost? Per month or per use? How will you get the test to the tester? etc For example, if the test cost £100, then this limits the number of tests carried out to probably only those at final interview stage, if at all. If the test was £1, then every company who knew about it would probably use it to weed out people before interview!
Secondly your focus should then be the 'selling' of it. Wisdom might suggest that the companies who do the most hiring are the agencies, however looking at the motivations they have, they really have not much financial interest in 'negative' testing - in fact quite the opposite!
The public sector is probably the main market and I have seen 'per use' and 'per month (licensing)' deals but publishers favour per use payments for obvious reasons when the software does the billing! However, I can see some of the recruiters supplying to the public sector (like those up and down Victoria st. supplying to Westminster and Whitehall) being interested. The public sector are risk adverse which is a double dged sword. On the one hand they are reluctabnt to try new things (especialy controversial things) but then the test is designed to reduce their risk.
I think also the managemnet developmnent people may have an less risky interest: as a feedback tool for managers to highlight to them where they may have blind spots. I know the publishers like this angle because it is less risky as you are not turning peoploe down for jobs onm the back of it.
I have visions that versions of the test could be used in the intellignce services and in child protection.
It is the varying markets that makes it dificult to know which market(s) to go for, and how to assess what demand there might be. I have no problem generatying free publicity, just not always the right sort! I have had some interest from a TV company who do a 'test the nation' style programme and a second hand contact from a reality TV show concerned that some of their contestants/participants should be screned with it but I was a little concerned that making it 'pop' might count against its use with a professional audience where the long term future must lie.
Generated press interest is fairly easy. Without trying we have had national and international press coverage but that was too early for the test to be used live and as they only give it a few column inches it just senstionalises it and polarises opinion before I get a chance to explain it. I suspect I could get trade press coverage but I would need a live product, which would mean me investing to get it working for volumes. At the moment I have to download data in batches, put it through bepsoke software by hand, apply a scoring algorithim and then hand generate feedback which is no good for any size of 'live' use or even marketing wheer the capacity to auto test , score, interpret and feedback are required.
I do have the emails of about 50 HR managers in the public sector, but as I say, if I emailed them asking if it would be something they could see value in and whether their organisation might use it, they would probably al say yes(those not too afraid to express an opinion) but converting that to sales might be a different story! Of course a fully working version (at the moment I have just one key part of what will be a 5 or 6 part test fully working (but stil having to be hand calculated).
I just need a few ideas about what to do, not to market it but to establish the potential market which then might steer me away or towards developing and promoting it alone. I might sell 1000 units a year at £30 which makes the intial £10-15K investment seem good, but the publishers might be able to sell it in 10 European languages to their existing customer base through their exhibition stands, newletters, product launch eventts etc. Of course that might also help me sell it to the publishers too!
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