Willingness to pay

Contract

Make customers sign to use and pay for your future product

Illustration of Contract

See also: Sales Pitch, Sell the Future

Difficulty: Intermediate

Strength of evidence
60

Relevant metrics: Acquisition

Validates: Viability, Desirability

How: Learn whether potential customers want your non-existing product by asking them to sign a contract for using it once it is available. Be very open about the product not existing, but ask for confirmation that users will pay once it is available. If the product isn't developed or if users aren't interested anymore, you (and they) can take it all back without any consequences.

Why: A customer contractually committing to using and paying for your product is a significantly larger validation of willingness to pay than a potential customer verbally expressing interest in your product and agreeing it could be useful. Furthermore, as customers sign an objectively risk-free contract, they commit themselves to invest their mental efforts and their future to your product and pave the way for larger commitments later.

This card is part of the Validation Patterns printed card deck

A collection of 60 product experiments that will validate your idea in a matter of days, not months. They are regularly used by product builders at companies like Google, Facebook, Dropbox, and Amazon.

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Before the experiment

The first thing to do when planning any kind of test or experiment, is to figure out what you want to test. To make critical assumptions explicit, fill out an experiment sheet as you prepare your test. We created a sample sheet for you to get started. Download the Experiment Sheet.

Make sure that you can both get out

By getting potential customers to sign a contract, you learn whether they actually want your product (that doens’t yet exist) with much more skin in the game than merely asking them. Your objective is to force your experiment participants to conduct actual behavior rather than just expressing their preferences – to do rather than say.

Ask potential customers to sign a contract confirming that they will pay you for your service once it is made available and be very open about the fact that you don’t have it yet. If it turns out the product will not be available or if the customer has lost interested, it’s important that both you and your customer can take it all back without consequences. Still, the commitment and act of signing an actual contract is large proof of willingness to pay.

After the experiment

To make sure you move forward, it is a good idea to systematically record your the insights you learned and what actions or decisions follow. We created a sample Learning Sheet, that will help you capture insights in the process of turning your product ideas successful. Download the Learning Sheet.

Examples

Ordr.in

To validate whether companies wanted to embed a widget to their intranet letting employees order lunch, they made Ordr.in pitched the ideas to potential customers and made them sign a contract, letting them know that no product had been built. Having reached the goal of 500 signed businesses, they started developing the product.

Source: Validating Product Ideas Through Lean User Research

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Idea Validation playbooks