Whether a brand accepts or not, high acquisition costs and low retention rates are symptoms of poor product market fit.
Most brands think they can solve these issues with better ads or more promotions.
But the truth is:
You can’t market your way out of a product that doesn’t fit the market.
A good product-market fit, can save you a lot of trouble and help you drive profitability.
Here’s what happens when you get it right:
- Lower Acquisition Costs (Yes, your CPMs will drop)
- Higher Retention Rates (Customers will return for more)
- Stronger Word of Mouth (The easiest sign of product-market fit)
A new product that fills an existing gap or meets an underserved market need is far more valuable than a 100-year-old brand.
That’s why it’s important to keep on testing new products in the market.
Here’s how you can launch and test new products with little risk –
Gather customer insights
- Ask your existing customers for their feedback or issues with existing products.
- Observe on social media/reviews for what customers like and dislike about your product.
- Conduct one-on-one interviews to uncover needs and pain points.
Start small
- Test demand with pre-orders or waitlists.
- Launch small variations of the existing product
- Exclusive drops for your VIP audience.
- Use Email/SMS to target existing customers with new products
Analyze Metrics
- Monitor conversion rates and word of mouth.
- Collect detailed feedback on new launches
- Lastly, check for long-term profitability. Access how the product will fit in your future roadmap, and impact contribution margin, retention rates, and customer acquisition costs.
A single SKU can be scaled to millions. But only if it’s the right fit for the market.
Stay curious. Keep testing. 🚀
P.S. What’s your biggest challenge in finding product-market fit?
Looking to achieve profitable growth? Yes, it’s possible! I help DTC brands scale profitably with our 4C – Catalog, Customer, Channel, and Cash framework.
One email a week on subscription retention: the numbers, the strategy, and what to fix first.
Rahi Jain
Rahi Jain is a subscription LTV specialist who helps DTC brands maximize their LTV from subscriptions.
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