Identifying Product-Market-Channel Fit (PMCF) problems
In the previous Skilleton, we covered channel-Ideal Customer Profile (ICP) alignment, engagement rates on the channel, conversion rates, and, ultimately, channel-level profitability as measures of PMCF.

Isolating problem dimension:
If it is clear that product-market fit is not in question (high customer satisfaction scores & high product engagement and retention), and it is the product-market-channel fit that is yet to established (i.e. lack of channel profitability), the next step is to isolate the correct dimension of the problem.

The 3 major dimensions here are channel-ICP alignment, communication alignment, and channel economics, in that order.

Channel-ICP alignment:
First, we will test channel-ICP alignment. We will measure what % of prospective customers coming from a channel belong to the ICP. This can be done through sampling & surveys if profile data is not known for all prospective customers.

Communication alignment:
If channel-ICP alignment is not the cause, we will then move to communication alignment. This can be checked qualitatively to see if the visual communication, the copy, and most importantly, the USP of the product/service being communicated on the channel, is in line with the stated needs of the ICP.

Quantitatively, this can be measured through the engagement rates on the specific channel. For example, for a content marketing channel, such as YouTube, it would be the video completion rate. For a paid market channel, it would be the click-through rate.

Channel Economics:
If we have checked the first two dimensions, we then check if the channel economics might not be working due to either high cost of impressions (CPM) or low conversion rates (ECR or CVR), or low Average Order Value (AOV).

For example, a channel might be bringing a high % of ICP, and the messaging might be on point, as evidenced by high engagement rates on the channel, but still channel economics might not be working due to:
- high CPM (e.g. Instagram Ads), or
- low CVR inherent to the category (e.g. some categories are best bought offline, so online CVR will be low), or
- low AOV (e.g. personal care, fast fashion), etc.

Common solutions:
Following the same sequence as before, if the issue is with % of ICP in prospective customers coming through the channel, a common solution would be to change the audience targeting.

If audience targeting is not available for the channel, change in communication itself can act as an ICP targeting mechanism.

Communication is also the right lever to solve PMCF problem if the problem is not with channel-ICP fit, but with low engagement rates.

Beyond these two solutions, PMCF will depend on the channel economics. In which, there might be variables that are in your control (e.g. Average Selling Price) and some that are out of your control e.g. channel's cost of impression, category-specific conversion rates, category-specific retention rates. In such cases, you might have to move on to experimenting with a different channel.

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