Customers Say They're Interested, but Will They Actually Pay: Testing an Idea Before a Large Investment

People who spend money making a product before finding customers often meet the same thing. When they ask friends and acquaintances, everyone says "sounds interesting" and "let me know when you open". But when the product is actually released, almost nobody orders. The problem is not that friends are lying. It is that saying you are interested costs nothing, while paying costs money, time and risk.

This guide follows on from choosing your first customer segment. Once you have a target group, the next job is to find evidence that this group will really pay, before a large investment. It covers how to interview, an evidence ladder, small sales experiments, setting decision criteria in advance, and the law relevant at each step. For using web pages, prototypes and pre-orders within the Canvas as a whole, see the related sections of the Lean Canvas guide; this guide goes into more detail without repeating it. And if the business is already running and you want to trial a change of model, see testing a business model change with a pilot.

The core answer

Do not treat an idea as passed just because someone says they are interested. Collect evidence in steps: a conversation about past behaviour, an agreed follow-up meeting, a letter of intent, a deposit or pre-order, a paid pilot, and finally repeat purchase. Before you start, write down the criteria for when you will go on, when you will adjust, and when you will stop, as countable numbers of occasions and behaviours.

The rule (Thai law). A test touches several areas of law. Interviews and recordings involve collecting personal data under the Personal Data Protection Act B.E. 2562 (2019), which requires notice under section 23 and, where necessary, consent to record. Taking a deposit falls under sections 377 and 378 of the Civil and Commercial Code, which set the effect of a deposit and when it must be returned. Advertising to consumers must not be false or exaggerated under section 22 of the Consumer Protection Act B.E. 2522 (1979). Online sales or direct marketing may fall within the Direct Sales and Direct Marketing Act B.E. 2545 (2002). The idea itself is not protected by copyright under section 6, paragraph 2 of the Copyright Act B.E. 2537 (1994).

Our practical view. Make the test as small as it can be while still producing real evidence, and write the conditions clearly the very first time you take money, because money taken without conditions is the most common source of disputes in the early stage of a business.

1. Why "interested" is not evidence

A customer's answer in conversation can be distorted in several ways.

• Politeness. Most people do not want to discourage the person asking, so they answer positively to be kind.
• Leading questions. Asked "if this service existed, would you use it?", almost everyone says yes, because they carry no responsibility for the answer.
• Self-prediction. People are poor at predicting what they will do, but better at reporting what they have already done.
• No cost. Words do not cost the speaker time, money or reputation.

A simple rule: the more the speaker has to give up, the more the statement counts as evidence. Agreeing to another meeting during working hours costs time. Showing a real document costs openness. Paying a deposit costs money. Paying in full and buying again costs the most. Use this principle to order your evidence by the ladder in section 3.

2. Interviewing customers to get real information

The key is to ask about things that have happened, not hypotheticals, and not to sell during the interview.

Practices for the interview:

1. Say briefly that you are trying to understand a problem, not selling anything.
2. Let the other person talk more than you. If you speak for more than half the time, you are selling.
3. When you hear broad words such as "hassle" or "slow", ask what they mean and when it last happened.
4. Do not explain the product. If they ask about it, answer briefly and return to asking about the problem.
5. Close by asking for a next step, such as another meeting, a look at real documents, or an introduction to someone else. How they respond to that request shows how serious they are.
6. Write notes immediately afterwards, recording real quotes and real events, separate from your own opinions.

A hypothetical: Mr. B wants to offer a contract-document management service for small restaurants. He interviews several restaurant owners. One says "Great, tell me when you open." Another says that last month there was a dispute with an employee over wages agreed orally, so she asked an acquaintance to write a contract, but it was unusable, and she still has that form. Mr. B asks to see the form, and the owner sends it to him. The second answer carries far more weight, because it describes a real event, a real attempt at a fix, and a real document shared. This example is hypothetical, to show how to weigh answers differently.

Personal data and recording

An interviewee's answers, name, contact details and recorded voice are all the interviewee's personal data. Whoever holds them is a data controller under the Personal Data Protection Act B.E. 2562 (2019), which in practice means:

• Before you start, say what data you collect, why, how long you keep it, and who may have access (section 23). A short message sent in chat, or read out before you begin, is enough.
• Have a legal basis for collecting and using it under section 24, or ask for consent under section 19.
• If you will record audio or video, ask permission before recording and let the person refuse without losing anything. If they do not agree, take notes instead.
• Collect only what is necessary; do not collect data unrelated to the test, such as an ID card number.
• If you use it in reports or slides, mask names and any details that identify a person.
• Set a deletion date for when the test ends.

Full PDPA compliance is covered in the PDPA compliance checklist for businesses, and our related service is PDPA compliance.

3. The evidence ladder: from words to repeat purchase

Order your evidence from weak to strong, and note how many people reach each rung.

Many founders stop at rungs 1 to 2 and conclude "there is a market" when nobody has paid. If you have been testing for several weeks and still cannot get past rungs 3 to 4, that is important information.

4. Small tests before building the real thing

A web page to test interest (smoke test)

Make one page that describes the problem, the offer, and one button for one action, such as joining a waiting list or requesting a quotation. Then measure how many people take the action out of how many visitors. Points to watch:

• If the product does not yet exist, say clearly that this is a test or reservation phase, and do not write as though stock is ready to ship (see advertising in section 7).
• If you collect emails or phone numbers, the page must carry a notice about the data collection.
• An "Order now" button that does not actually sell risks misleading users. Use wording such as "Join the waiting list" instead.
• Check the brand name before you print or advertise; see section 9.

Do it by hand first (concierge) before building a system

Deliver the service with human effort at first, for example preparing documents by hand instead of automating them, or delivering yourself instead of building a delivery system. This lets you see customers' real problems without investing in a system. But tell customers plainly that this is a trial service, and set the scope in writing.

Paid pilot

Offer a small customer a time-limited trial in which they really pay, even if the amount is small. Paying makes the customer take it seriously and gives you more accurate information than a free trial. The pilot contract should contain only what is necessary: scope of work, duration, what the customer must provide, refunds, data retention, and what happens at the end. For drafting, see contracts and business documents.

Pre-orders and deposits

A pre-order is very strong evidence, but also carries the heaviest legal burden among the small tests. See section 5.

5. Deposits, pre-orders and refunds

When you take money from a customer before you have the product, be clear about what that money is.

• Deposit. Section 377 of the Civil and Commercial Code provides that when a contract is entered into, anything given as a deposit is deemed evidence that the contract has been made and security for its performance.
• Return or forfeiture. Section 378 sets the rule that a deposit is returned, or applied as part payment, when the obligation is performed, and is forfeited when the party who paid it is in breach. Conversely, if the party who received the deposit is in breach, or performance becomes impossible through its own fault, the deposit must be returned. The recipient therefore cannot claim the right to keep the money if it cannot deliver.
• Booking money, advance payment or part payment. These are business terms whose legal effect depends on the agreement and the facts. Do not use the word "deposit" without meaning it to have the effect of sections 377 and 378.

Practical conclusions for a person starting a business:

1. State in the booking form what kind of money is being taken.
2. State when you will deliver, and, if you cannot deliver by the deadline, how the money will be refunded and within how many days.
3. State in which cases the customer may cancel and what happens to the money on cancellation.
4. Do not spend customers' deposits on other things so that you can no longer refund them. If there are many customers, keep a separate account or a record that lets you trace the money.
5. If the customer is a consumer, terms in a standard-form booking form may be reviewed for fairness under the Unfair Contract Terms Act B.E. 2540 (1997). An example of a risky term is forfeiting all the money with no refund even where the recipient is the party in breach.
6. If you take payment through your own system, also check the rules on payment services, which the Lean Canvas guide already mentions; if you are not using a licensed provider, take advice first.
7. Tax and documents to issue when receiving money are a matter for an accountant or auditor, because this guide does not give accounting advice.

Sample wording for a booking form (adapt it to your business before real use):

(Sample wording, not a ready-made form)
1. The payment made now is a booking payment for [product name] as described above.
2. The seller will deliver by [date]. If the seller cannot deliver by that date,
   the seller will refund all money received to the buyer within [number of days] days
   of the date of notice.
3. The buyer may cancel before [date], and the seller will refund [on the agreed terms].
4. The seller states clearly that this product is in a market-testing phase,
   and its details may be slightly improved before delivery.

6. Letters of intent and MOUs

Customers who are not ready to pay but are willing to sign something often give an LOI (Letter of Intent) or MOU (Memorandum of Understanding). These documents are useful in business, for example to show co-investors or a bank that there is demand, but their legal effect is uncertain.

• If the document says only that the party is interested and will negotiate further, without agreeing the important points such as goods, quantity, price and delivery date, it is usually not treated as a sale contract that can force a purchase.
• If the agreement is complete enough, a court may treat the document as a contract even though it is called an LOI or MOU.
• Some clauses in the document may bind even when others do not, for example a confidentiality clause.

So read the wording to see what each party is bound to, and in business terms count an LOI as rung 3 evidence, not a purchase order. If you want it to bind, convert it into a contract or purchase order that states all the essential terms.

7. Advertising and online selling during a test

Advertising to consumers

Section 22 of the Consumer Protection Act B.E. 2522 (1979) prohibits advertising with statements that are unfair to consumers, including statements that are false or exaggerated, and statements that may harm society as a whole. For a market test, the practical rules are:

• Do not boast of benefits or results that have never been proven.
• Do not use reviews or testimonials that are not genuine.
• Do not say stock is ready to ship if it is not.
• State the important conditions, such as the estimated delivery date and that this is a testing phase.
• Beware of images that suggest a real product. If it is only a mock-up, say so.

Online sales and direct marketing

Online selling is electronic commerce, which has rules on electronic commerce registration with the Department of Business Development. Reaching consumers directly, for example by phone or by sending sales messages, may fall within direct marketing under the Direct Sales and Direct Marketing Act B.E. 2545 (2002), which in some cases requires registration with the Office of the Consumer Protection Board, with exceptions under ministerial regulations in some cases. The requirement depends on the method of selling and on the seller, and new announcements may be issued, so check the latest rules before starting a test with real sales. For an overview of online channels, see selling on a marketplace or your own website, and for consumer rights when buying online, see consumer rights when shopping online.

8. Set go, adjust or stop criteria before you start

The most common problem is starting a test without criteria and then interpreting the results in your own favour afterwards. Write the criteria as countable numbers of occasions and behaviours, on paper, dated, and make sure at least one person who is not the owner of the idea knows them.

The reason to write them first is that when the result is borderline, the mind wants to read it as a pass. Criteria already written let you decide without arguing with yourself. The criteria need not be statistically rigorous; they need only be clear and written beforehand. The numbers A and B in the table are variables the founder chooses; this guide does not set them.

An important note: this guide does not give investment or accounting advice. Deciding how much to invest, and how, is for the business owner, and if you want to analyse figures, consult an accountant or auditor. Calculating cost per unit before starting a company is covered in calculating cost per sale before starting a company.

Recording test results

Make a simple table that answers: what happened, with whom, when, and what was learned.

Keeping records helps you see patterns, and is also internal evidence if you have to present to co-investors, a bank or partners.

9. Protect the idea and the name before you disclose

An idea is not protected by copyright

Section 6, paragraph 2 of the Copyright Act B.E. 2537 (1994) says copyright protection does not extend to ideas, procedures, processes, systems, methods of use or operation, concepts, principles, discoveries, or scientific or mathematical theories. What is protected is the expression, such as written text, images and written programs. A business plan or presentation that has been written is therefore protected as a written work, but others may still take the same concept and carry it out in their own words.

What you can realistically do

• Disclose only what is needed. In interviews, ask about the customer's problem; you do not need to describe the whole solution.
• Confidentiality agreement (NDA). Use it with people who really need to know, such as developers, manufacturers or co-investors, specifying the confidential information, the permitted purpose, the duration and the consequences of breach. Customers you interview in large numbers should not have to sign an NDA, because it makes informants uncomfortable and is not worth it.
• Keep a dated record of disclosures. Record what you disclosed to whom and when; this helps in a dispute.
• Start selling and building relationships early. In many businesses the advantage comes from customers, speed and quality more than from the idea.
• Software, design and documents. Check clearly who owns the copyright when you hire others to make them. See the sections on code, brand and ideas in the Lean Canvas guide.

Check names and trademarks before printing

Before printing flyers, making signs or buying advertising, check whether the name you will use duplicates or resembles a trademark already registered, because using a name that someone else has registered may lead to a demand to stop and the cost of replacing all your materials. The process is in the trademark registration process, and our related service is trademark registration.

10. Checklist before you start testing an idea

• Choose your first customer segment and write the customer description sentence
• Write interview questions that ask about things that have happened, not hypotheticals
• Prepare a notice about collecting personal data for interviewees, and ask permission before recording audio
• Decide how many people to interview and where you will find them
• Decide the evidence rung you want to reach and the number to count at each rung
• Write the go, adjust or stop criteria on paper and date them before you start
• If you have a web page, check that the wording is not exaggerated, that it states the test status, and that it carries a data collection notice
• If you take deposits or pre-orders, write the delivery, cancellation and refund conditions clearly
• Read every LOI or MOU to see which party is bound to what, and do not count it as a purchase order
• Check whether online selling or direct offers require registration
• Use an NDA only with people who need to know, and record what you disclosed to whom
• Check the name and trademark before printing or advertising
• Prepare the results log and set a date to review the results

Further reading

• You have a business idea but don't know who to sell to — choose your first customer segment before you start testing
• Cost per sale and unit economics — check whether enough is left after each sale
• Lean Canvas — write all your assumptions on one page before testing
• Testing a business model change with a pilot — for a business already running that wants to trial a change of model
• PDPA compliance checklist for businesses — for interviewees' data and lists of interested people
• The trademark registration process — check the name before printing and advertising

Interest is not evidence. Collect behaviour that costs the speaker something, set the go, adjust or stop criteria before you start, and write the conditions clearly the first time you take money.

We help people starting a business draft the documents used in testing, such as booking forms, pilot contracts, confidentiality agreements and personal data notices, and check names and trademarks before real use. For an initial consultation, call +66 92 254 2045 or send us the details. See also contracts and business documents and trademark registration.

This guide is published by Suwanvara Law Firm — a Khon Kaen law firm established in 1986. General information only, not legal advice on a specific matter.