What is Product-Market Fit?

Product-Market fit describes your product finding the best target market, fulfilling your target customers’ needs, and bringing your product’s growth and business success. Why is Product-Market Fit so important? PMF(Product-Market fit) is highly associated with the goal of product development to generate revenue. Products which unable to achieve the product-market fit eventually disappear from the market. If you don’t understand your customers’ pain points, your product will never satisfy them. 

How to Measure Product-Market Fit 

There are various ways to measure Product-Market Fit. The most common PMF metrics are through a customer satisfaction survey,  the level of engagement, user retention rate, and churn rate. 


Basic customer satisfaction can be measured by NPS(Net Promoter Score). Usually, the NPS score is calculated following:

It helps you understand how your users are happy or satisfied with your product, and you will know if they are willing to share it. The most common question for this NPS survey is: “How would you likely recommend your product to others?” If 40% of users answer that they are willing to recommend to others, it indicates that you achieved Product-Market fit.

In addition to a simple survey, executing a complementary survey is another way to see customer satisfaction.

 “How would you feel if you could no longer use [your product]?”  

  • Very disappointed
  • Somewhat disappointed
  • Not disappointed
  • I no longer use [product]

When you find more than 40% of users say that they would be “very disappointed,” then it might have a good chance that your product can be scalable and sustainable.

Cohort Analysis 

You can use cohort analysis for user behaviors and see how many users actively use your product over time. There are two common types of cohort analysis: Acquisition cohort and Behavioral cohort. Acquisition cohorts can be tracked daily, weekly, and monthly. For this cohort, you divide users based on their acquisition or sign-up date. A behavioral cohort is that you divide user groups based on activities in a certain period. 

With cohorts analysis, you can determine user lifecycle when users drop off, and you will explore where your user drop-off rate increases. Did they drop off when asked to sync their accounts to your product? Did they drop off after onboarding? You will also define certain behaviors that trigger users’ dissatisfaction and the point that they reached the ‘Aha’ moment and made them stick to your product.

Retention Curve/ Churn rate 

It is also essential to see the user retention curve and churn rate. The most common retention curve is about the percentage of new users returning in a certain period.

The most common retention curve is about the percentage of new users returning in a certain period. The successful product would have a retention curve plateau (blue line graph below)where a retention rate flattened after a certain period. The retention rate decreases if your product doesn't achieve Product-Market Fit (red line graph below).

Churn rate is also an important metric to see product-market fit. If your churn rate never slows down, your product is not satisfying your target customers, or there is no stickiness.

How to Achieve Product-Market Fit?

There is no solid Product-Market Fit solution. It depends on your product, but it is essential to see the actual problem in your target market. Product-Market Fit should start with the question, “Do customers in the market recognize that they have the problem you are trying to solve?” Once you find a significant problem in your target market, you build and design the product and need a plan for a go-to-market strategy.

Dan Olsen, Lean Product Process, has a famous six-step framework for achieving product-market fit. 

Target Market and Customer 

First, you start with a hypothesis about your target market and target customers. In this step, you will need a user persona. Define your ideal customers, and segment the target market.

Identify Customer Needs.

Once you create a user persona, you need to understand your customer’s pain point and find the specific needs that products in the market have not solved their problem yet. You might avoid the markets where the customers are already happy with the existing solutions.

Characterize Your Unique Value Proposition.  

We all know the tech market is already competitive. In this stage, you need to address your product’s unique features. Defining a unique value proposition for your product can help you have a strategic plan for how to stand out from your competitor.

Specify your MVP feature set. 

Based on previous steps, it’s time to list things you want to have in your MVP. Keep in mind that MVP shouldn’t have too many features. Includes features that your target customers can validate your product value.  

Create an MVP prototype.

Start creating an MVP prototype with the feature that you specify. In this stage, you don’t need to code your MVP, but you will need to apply UX design that conveys your product feature. Use a prototype tool and simulate your MVP with the prototype. You should decide your product prototype fidelity (level of detail) and interactivity. Low fidelity would be a hand sketch, and high fidelity would be a clickable or tappable prototype. Medium-fidelity wireframes and high-fidelity mockups are commonly used for web and mobile products.

Test your MVP and Iterate to improve product-market fit.

Test your MVP prototype with your target customers. You will need to interview the target customer one-on-on and ask for feedback. And your interview question should request detailed feedback such as “what do you think about this feature?” and avoid the closed question such as “Do you like it?”.

Also, you should pay attention to user behavior. After analyzing customer feedback and user behavior, you need to revise your hypothesis, improve UX design, and return to test steps. If your target customers do not match your theory, you must go back to step 1 and redesign the product. 


Product-Market Fit is crucial for the scalability and sustainability of your product. There is no reliable way to achieve Product-Market Fit, but understanding target market needs and customers is the most critical step for your successful outcome. Product-Market Fit is not a single task for product development, but it is a long process to make your product successful. You can observe Product-Market Fit with NPS, Cohort analysis, and Retention curve and see if your target customers would like to use your product to solve their problems. And iterate the product development process by asking for feedback, revising your hypothesis, and updating features and UX design to achieve Product-Market Fit.

From startups to large enterprise product development, Tacpoint Digital Product Design can help your product deliver the best value to your customers. 

/ Get the FREE ebook


A Playbook for Achieving Product-Market Fit

* Required | By submitting this contact form, I agree to receive email messages about Tacpoint’s products and services. I understand I can opt-out any time.

Product Market-Fit: How to Measure and Achieve it?

Create product demos with us. Hassle-free.

See how we can help
UI example, mobileUI example, desktop

Ready to build better product experiences?

See how we can help
UI example, mobileUI example, desktop

Clearing digital roadblocks

Custom solutions to keep teams moving

Get your solution