Why People Buy

With a provocative title like “Why People Buy” how could I not go to a breakfast session with Tom Schultz, Partner of Baker Street Solutions?  The short answer: People buy for emotional reasons that are as important, or maybe more important, as the features and benefits of your product or service.

Tom’s firm helps clients learn these emotional pegs by applying V2 of Consumer Hedonic Discovery (CHD), the consumer insight methodology developed at Proctor & Gamble.  Through the application of this approach he seeks to understand consumers’ needs and purchase intent.  Tom’s background is in classic consumer goods (P&G, Platex, etc.) where, as he puts it, “nothing else matters but first purchase, repeat purchases and tell-a-friend.”

At the core of CHD is research to learn the emotional reasons consumers buy in a product category and then to create a niche for the product based on those emotions.  Not surprisingly, the key is listening to the consumer.  Instead of starting with a formal quantitative study, the CHD approach starts with one-on-one interviews (aka ethnography) to listen to consumers talk about what they want the product to do.  This process reveals the emotions behind the product purchase, not just the rational reasons for the purchase.

But these insights might be voiced by just a few of the 100 – 150 people interviewed.  So the next step is quantitative research with a larger sample (2500 or so people) to determine how many people feel this way and the size of the niche compared to the whole market category.  With the results from the quantitative research, Tom and his group focus on what he calls a “verbal nail”, a position to which the brand can lay claim.  The last piece is volumetrics which measures how much consumers in the niche will buy.

Tom presented a case study on a skin cream product for woman as an example.  One-on-one interviews revealed a subset of consumers who were realistic about what a product could do in terms of aging skin.  They did not believe claims that a product could reverse the aging process, but they did want a product that could decelerate the damage.   Based on the interviews, Tom’s team surveyed to learn the percentage of women in the market that held the same belief.  They learned that these “balanced consumers” made up 16% (or one-sixth) of the market space and developed the verbal nail of “slow down the damage” for the product.

As you might imagine, this research does not come cheap.  The CHD approach may be out of reach for small companies with limited budgets.  But I think many of the ideas Tom presented can be applied in other ways.

One-on-one research – Like Tom, I prefer initial one-on-one research as opposed to focus groups.  Even with the most skilled focus group facilitator, an individual can impose his biases on the group or someone with a great insight might be afraid to speak up because they feel their ideas are “dumb”.  The one-on-one approach avoids this pitfall and makes the individual feel his/her opinions are the most important because you are dedicating all your attention to him/her.  Even a handful of discussions with current and prospective customers can reveal insights you have not considered.  In past positions with companies, I liked to work the trade show booth at conferences to hear buyers talk about the company and their needs in their own words.

Test how widely held the beliefs are –  I think it is important to do quantitative research to learn the importance of the attributes uncovered in one-on-one interviews.  This can help you size the niche you will be serving.

Find the emotional side of the buy – Even in business-to-business sales, the buyer has emotional needs (wants to look like a hero, does not want to make a mistake, etc.) that are as important as the features and benefits of the product or service.  Learn what they are and you will be on your way to answering the question: “Why do people buy?”.

 

 

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