We’ve all heard this before: 90% of startups fail. We’ve broken down the numbers, but we’re not here to scare you by saying “startups fail for a million reasons.” On the contrary, we know what makes many startups fail: poor market demand and product-market fit (PMF). We’re here to help.

Before launching a new company, it’s essential to do market research in order to confirm that there is indeed market demand for your product.

Today, we’ll walk you through how to identify signs of a lack of market demand and, more importantly, how to address it effectively.

How market demand and product-market fit go together

Market fit refers to the degree to which a product satisfies a strong market demand. Achieving product-market fit is a critical milestone for startups, as it indicates that the product is not only something that customers want, but also that it fulfills their needs effectively. When startups achieve market fit, they can expect significant growth in user acquisition and satisfaction, making it essential for long-term success.

Product-market fit is the holy grail for businesses looking to grow. It means you’ve got a product people actually want, and the market is willing to pay for it. But what happens when you feel like your product is great, your marketing efforts are solid, but you're still not seeing the traction you hoped for? The problem might be a lack of market demand. Without a clear demand, even the best products can struggle to succeed. But don’t worry—this is a challenge you can overcome.

What is market demand, and why is market demand crucial?

Before we dive into how to solve a lack of demand, let’s first define what we mean by “market demand.” At its core, market demand is the level of consumer desire for your product. If people want what you're selling—whether it's a software tool, a physical product, or a service—you’ve got the foundation for success.

Understanding market demand isn’t just about having a great idea—it’s about knowing whether there are enough people who see enough value in it to make it worth their while. Assessing market demand means understanding both the size of your target market and the depth of their interest. If you haven’t validated this yet, now’s the time to get crystal clear on who your customers are and what problems you’re solving for them.

Quantifying market demand

Market demand is quantified in different ways depending on your industry sector. In B2B SaaS, it can be defined as the amount of customers willing and able to purchase or subscribe to your software product.

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Does your product meet a demonstrated need? Is it affordable, user-friendly, and enjoyable to use? Does it play well with other commonly-used platforms? Do you offer stand-out customer service? These are just some of the questions you may ask as you delve into market demand research.

What are common signs of lack of market demand?

It’s not always easy to pinpoint when your product isn’t meeting demand, but there are a few key signs that can signal a problem:

1: Low or stagnant sales

Despite high-quality marketing, your sales numbers are flat or shrinking. This could indicate that you’ve tapped the market for your product completely, or that your current customers aren’t recommending your product to others. It could also mean that your pricing strategy isn’t delivering on value or working for your target customer base.

Consider doing market research to identify features that could add value to your product. What other pain points are your current customers facing? What’s not working with your current product? Identify what it will take for the customers you have to start recommending your platform to others and invest in product development, SaaS billing best practices and marketing efforts surrounding those factors.

2. Poor customer feedback

Customers aren't excited or engaged with your product. You may hear crickets when you ask for reviews or feedback.

Consider building regular feedback sessions into your Customer Success cadence, and actually act on the feedback you receive. Show your customers that you’re listening and care about what they have to say.

3. High churn and low renewal rates

If customers don’t stick around or keep using your product, that’s a red flag that there isn’t enough demand.

It could be indicative of low market demand, lack of key features, or poor integrations between platforms. The key to deciphering the message that high churn is sending is to solicit detailed customer feedback.

These are some of the more obvious signs, but remember: the problem might not always be your product—sometimes it’s just that it hasn’t hit the right audience yet. Investing time and resources into market demand can give you confidence that you’ve done your due diligence, and if your product isn’t taking off, it can provide a strong starting point from which to troubleshoot.

How to Address a Lack of Market Demand

Now that you’ve identified the issue, let’s get to work fixing it. Here’s how you can start addressing a lack of market demand:

Step 1: Conduct market research

The first step is to understand your market. Don’t just assume that your target audience knows they need your product—ask them! Use tools like surveys, interviews, and competitive analysis to get clear feedback. According to Enterprise Nation, some of the best ways to gather data include: focus groups, online surveys, and even talking directly to customers through your sales channels.

If you can’t get enough feedback, think about whether your messaging or product features are clear enough.

Questions that can guide these conversations include:

What pain points appear in your daily workflow?
How would you like to see the workflow improved?
What solutions have you tried?

Step 2: Validate demand before you scale

Testing your assumptions before investing in big marketing pushes or scaling your product is crucial. Instead of pouring resources into an untested idea, try creating a minimum viable product (MVP) or run small-scale tests to gauge interest. The goal is to find out if people will pay for your product—before you make major investments. This helps you make informed decisions on whether to proceed or pivot.

Step 3: Adjust product features and/or messaging

Sometimes the issue isn't that the market doesn't want your product—it's that potential customers don’t quite see its value or understand it. Consider tweaking your product or refining your messaging. Does your product solve a critical problem, or are you just adding another feature to an already crowded market?

Your customers and industry peers are busy – help them understand how your product can help them, and get their thoughts. If your product is too complex to describe in a quick conversation, it may be too complex to effectively market. Consider simplifying or streamlining your options to make a denser, more efficient and value-packed product

The Role of Marketing in Driving Demand

Marketing isn’t just about broadcasting your message—it’s about creating demand. According to Harvard Business Review, many marketers are shifting their budgets away from social media, which has seen diminishing returns, and focusing more on personalized content and experiences.

Align your marketing with your demand research—use data to guide your ad spend, content strategy, and channel selection. The more you can personalize your outreach and meet your customers where they are, the better.

We live in an algorithm-driven world and we’re accustomed to having online experiences tailored to our preferences. Take advantage of that, and ensure that your ideal customer profile is detailed and robust. With that as a foundation, your marketing strategy can build upon it and create something that appeals to your ideal customer.

How to fund market demand research

Conducting market demand research is the foundation of informed product development, but it takes time, money, and expertise. For companies already selling an existing product, present-day sales can be a great source of funding for research. That said, sales cycles are longer than ever, and buyers are more budget-conscious, which often requires vendors to rely on discounts in order to close.

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For SaaS companies looking to accelerate sales cycles and improve cash flow, Capchase Pay offers a solution. Capchase Pay allows you to offer flexible payment terms to buyers. Then Capchase pays you full ACV upfront, giving you the cash you need to fund essential research without the delays associated with traditional financing methods. This ensures that your development efforts are market-driven and aligned with your long-term goals.

Capchase Pay can:

Accelerate sales cycles
Reduce reliance on discounts
Help you close at higher ACV
Meet your customer’s budget needs with monthly payment options

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And we pay you 100% of the ACV upfront so you have the cash you need to power market demand research.

Market demand research funding that boosts revenue

Ready to offer a new feature, expansion, or integration with your product? As we’ve shared today, step one is to ensure that there’s a market for it. Having a strong market fit ensures that your development team isn’t wasting time, and that you and your stakeholders will experience a return on your investment.

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Capchase Pay shortens sales cycles and allows your Sales team to close at higher ACV. While your customers can choose to pay on a schedule that works for them, we give you the full contract value amount on day one, allowing you to invest where it counts. Funding is available almost immediately, and can go straight into developing a robust, effective market demand research protocol.

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For companies looking to borrow a lump sum with quick turnaround, Capchase Grow is an option. Scaling alongside your predicted ARR, Capchase Grow funding can provide quick financing without pitch decks, business plans, or slow underwriting processes.

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Product development without market demand research is a waste of time at best, and a company-ender at worst.

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Reach out today to learn how to get started with Capchase.

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