Ideas and Validation March 24, 2020

You need to understand the 3 reasons people buy

Kevin Conti @Kevcon80

Warning: Long read ahead! Grab some popcorn

What makes people buy?

We treat this like it’s an easy question. How would you answer it?

People buy based on value, and pay based on how MUCH value... right?

But, if we dig deeper, this isn’t always the case.

1: Support

One reason people buy is to support others that we care about. This is why building an audience is so insanely powerful. It truly is an unfair advantage, and can be the difference between mass adoption and falling flat on your face, as I’ll talk about more later.

(By the way - too many people forget this. When you’re taking advice from founders online, keep in mind if they have this unfair advantage. If they do, you need to realize that they had a very different path to success than you do, and you shouldn’t take their advice as absolute fact.)

2: Push

The second reason people buy is because you make them aware that they have a problem, and that there is a solution to that problem. There’s a lot of hidden risk in building a product in this area, and it’s why a lot of products silently fail.

Risk 1: Building something that no one wants

For one, you run the risk of building something that no one wants. If it’s such a painful problem, how in the world do they not know about it? Why haven’t they tried to solve it on their own?

Very rarely will an idea in this category have a satisfactory answer to this question. But when it does, we get to the next issue...

Risk 2: Requires a behavior change that people won’t (or can’t) make

The second is more pernicious. If your users are stuck in their ways, they won’t be willing to pay for your product. To them, the relative increase in value isn’t worth the perceived effort and confusion in adoption.

When this is the case, it takes a massive marketing effort to get people to change. Think Apple and wireless headphones, or the iPhone itself. Both of these required massive investment in order to get people to rethink the way the lived.

Risk 3: Users don’t expect to pay

The third risk - the least obvious of the bunch - is that users don’t expect to pay for this type of product. In every industry, there are the parts that we consider ‘paid’, and the parts that are considered ‘free’.

When you’re in the free side, you have to claw your way out to get a user to justify spending even a bit of money.

When you’re in the category of having a product that people aren’t aware is a problem, you need to spend a lot more time justifying your product. You need to:

  • Show the customer their problem, explaining why it hurts more than it feels like it does
  • Follow up with what your product is, and why it solves that pain
  • Sell why it’s better to spend money on this product instead of just keeping the status quo
  • And finally, assuming they buy the product, you need to create an app so good that it changes their behavior for them! Otherwise, you’ll see people try it once and not show up again.
  • It takes a lot to make a product like that successful. It’s where I’m at now with codernotes.io.

A bootstrapper / Indie Hacker is going to have an incredibly challenging time succeeding in this category - that is, unless they have a large enough audience to drive adoption in that niche. Again, this is why you should be careful taking advice from people with a following if you do not.

The worst part about these risks is that they aren’t obvious. The idea might be good - an actual improvement over the current behavior that the user experiences. This is the worst of both worlds, since you’ll spend the time to build the app, and just never get the adoption you feel it deserves.

”So, how do I avoid this?”

3: Pull

The third and final reason people buy is because they are looking for a solution to a problem. I call this ‘pull’.

The process for selling a product that has pull is entirely different from one that doesn’t. Users search or seek word-of-mouth referrals for your product. They already know the problem is painful enough to warrant fixing it. You position towards a specific value proposition or niche in that market, making you the authority for the group that cares about that position.

Then, they buy.

Let’s take LessAnnoyingCRM as an example. As a company, LessAnnoyingCRM doesn’t have a great idea of what actions they can take to get business.

What they do know is that a large amount of their business comes through word-of-mouth and referrals. Lots, if not most, of their business looks like this:

  • Users know that they need a CRM to manage clients
  • The search or ask around for a CRM.
  • They care about ‘simple’ positioning, which matches LessAnnoyingCRM.
  • They buy.
    Of course, there’s more to the picture, and a post is going to simplify things. I’m sure that there will be some great discussion in the comments. But keep in mind the concept of ‘pull’, and figure out how you can make your product have pull.

Do you agree or disagree with the above? What thoughts do you have?

PS, I’ll be talking a lot about this on the First Time Founder podcast this week, if you’d like to hear more of my thoughts on the subject. You can find it wherever you listen to podcasts.

  1. 2

    Interesting, the issue with explaining people "their" need is what I've faced with whichlogin.com - people know the issue maybe but don't really see it as something worth to fix or aren't really fully aware of the problem...

    1. 2

      Yep, I have the same struggle with codernotes.io. It's a hard path but I think the solution, if you are going down a 'push' route, is to be very mindful of your positioning, and work to position yourself around something people are already familiar with paying for.

      Although, I'm not sure how things change for a product like yours that has a 1-time purchase, versus a SaaS company with recurring subscriptions. You may have an easier time getting sales? Curious to hear your experience.

      1. 1

        I think it's pretty tricky to market WL - at least I don't know how for now. Kinda parked it as sales leveled off after the initial launch...

        1. 2

          Super interesting, thanks for the response. I imagine it has re-launch potential as features get added, if the original sales were high enough to warrant that

          1. 1

            Yeah, other projects are easier and had more revenue at the end... So I'll stick with them plus general content marketing to reach more... started to send my own newsletter to reach a few people more too. Looks pretty "patchy" but I don't care for now: https://peterthaleikis.com/newsletter/ its a try if it works...

  2. 2

    What do you think are some popular/upcoming examples you see for the support/push category?

    1. 1

      I won't try to predict 'push'-based trends. Like I mentioned, they require you to convince a potential customer that they have a problem worth solving.

      Optimistically, it means that you made something so amazing that customers didn't even think it was possible. For example, if you invent teleportation, you'll get lots of paying customers.

      More realistically, you need a huge marketing budget to convince people that your product is worth paying for. This is what Apple did with the airpods

  3. 2

    Another thing is people pay based on perceived value. There have been many a product that offered tremendous value but the target audience simply didn't perceive it as such and the product tanked.

    1. 1

      True, this is a more accurate version of the statement I mention in the beginning of the post.

      My recent thoughts are that thinking in terms of perceived value isn't going deep enough, hence this post.

      It's not enough to say that a product has perceived and real value, and therefore it is going to be successful. We need to say that our products have pull (ideally) or that we have a strategy for being successful despite not having pull.

  4. 1

    Since push/pull are all very competitive, is it possible to bootstrap an entire business to ramen profitability and beyond just by honing on "Support?"

    Keep being human, keep playing the underdog to root for, keep putting your story out there and be as likable as possible, grow your audience, and survive and thrive based on people liking you, not your product.

    Do you think that's a legitimate workable startup strategy?

    1. 2

      I think that support helps either push or pull, but at the end of the day your business will fall into one of those two categories.

      Your product (zlappo) is definitely an example of pull. I’m sure you find a lot of people who are looking for twitter automation. They know that they need a way to schedule tweets. It’s a great market!

      I think your next step is to dive deeper into positioning. Why do people choose you over a competitor? What segment of people who need twitter automation aren’t getting exactly what they want from the big players? Everyone has one or two things that they care about the most when choosing between products. You need to become THE place for people who want a certain one or two of those things. It may be:

      • simplicity of ux
      • able to track certain keywords and respond to other’s threads
      • amazing mobile experience
      • opinionated framework for guaranteed results

      Who knows which would work best for you? Your free trial sign-ups do. This part is an art rather than a science, so you need to start talking to your users and get an idea of what would be a good way to position.

      Good luck!

      1. 1

        Ah, thanks a lot for your input.

        Speaking of free trial signups, my trial-to-paid numbers aren't looking very good, no matter how I fill up the funnel.

        I think I have a pretty good traffic-to-sign up rate (6%), but the trial-to-paid is lower than that, which is frustrating to say the least.

        Any ideas how to diagnose the problem? You say talk to my trial signups, but every time I send an email, I barely get opens, let alone responses. At the end of the day, I can guess intelligently and iterate based on observation and instinct, but until now honestly I still don't know how best to position my app in a sea of competitors. 🤷‍♀️

        1. 2

          By the way, your original question inspired me to write another post. I’m curious to hear your thoughts!

          Funny enough, I happen to be a free trial customer that didn’t sign up for pro, so I’d be happy to chat :)

          You have their twitter profile, right? I would see if you can reach the, their, since that’s where they are trying to be anyway.

          If you feel like this is the biggest blocker to zlappo’s success, you need to get serious with it. Offer a free month for people who respond. Follow up with people who didn’t stick with the free trial. What didn’t live up to expectations?

          Happy to chat more, shoot me an email at [email protected]