Why Should They Buy from Your Company?

Michael E. Gerber, author of Power Point Marketing and The E-Myth, relates this question to brand recognition versus product acceptance. If the customer hasn’t been sold on the idea of what you’re selling, you must first gain product acceptance. Asking why customers buy can help you answer that question.

You’ve probably noticed that it is usually easier to get people to make a decision if they are already sold on an idea. Selling books to people who don’t buy books or read much is a lot harder than selling books to someone who buys a lot of books. Even though at first you might want to sell to the people who haven’t bought yet, you will use less time selling if you don’t have to convince the prospect why the concept is good. So concentrating on people who are already sold on the product allows you to concentrate on selling the brand, yourself, or what you have to offer, and make sales faster.

I had the opportunity to work with PW Funding and interview their top producer, Dick Olrich, in getting ready for my program. (PW Funding was originally a part of Payne Webber. Since its inception in 1970, it has originated more than $3 billion of financing for multifamily housing. It is now a subsidiary of Related Capital.) Here’s what Dick told me he does to provide value to his clients: “I convey to clients that I am in the business of developing relationships, not one transaction. We give superior speed and service. We’re not the most aggressive. We put forth a reasonable deal that works for the borrower and lender. We tend to screen conservatively. We deliver as promised.”

When Dick joined the company ten years ago, it did very little repeat business. Now close to half of its business is repeat and a good deal of that is due to the process Dick developed to make sure he “takes away the headaches” of his customers, thus increasing the value of the services he provides to them.

“ We have to build a brand that you don’t have to keep explaining to your neighbors why your drive a Hyundai and not a Honda.”

—Finbarr O’Neill, head of Hyundai U.S. sales

Typically, the most likely customers at the early stage are the small number who must have the latest technology or design. The mass market waits until the technology is proven, the design is accepted, and the product or service becomes very easy to use or is distributed through more convenient channels. This distinction may be important to you if you are selling a product that has not yet gained wide acceptance. While the lack of acceptance can make the sale more difficult, the lack of competition can make it easier.

When customers have bought from you, what was most important to them in making their decision to purchase? Understanding this can help you better market to other customers. From time to time, you’ll want to ask your customers what was the most important reason they decided to do business with you.

To understand why new customers should buy from you, start by asking your current customers why they buy from you. Call or meet with three to five customers. A face-to-face meeting is best, but if you can’t accomplish that, phone and E-mail can also work. Begin with these five questions:

• What benefits and results have I achieved for you? (Quantify, if possible.) Have I met, exceeded, or not met your expectations?

• What do you like best about my products or services? About working with me?

• What one, two, or three things could I do to serve you better?

• If you had a magic wand, what else would you wish for in the solutions that have been available from me or others? (What’s missing?)

• What do you see as the most important trends affecting your purchase decisions in the future?

Note also that if you work at a medium-sized or large company, your company may conduct customer surveys. You might be able to gain some information from these surveys, or even piggyback onto them.

The relevance of these questions is that if you are selling to a strong market (a service tailored to those customers and with less competition), it is easier to sell. If there is not much difference between the next salesperson and you, it will be much more difficult to sell. (That’s called a commodity market.)

With hundreds of cable channels, channels are evolving to target more and more specific audiences. Jack Trout, coauthor of Positioning: The Battle for Your Mind, a timeless marketing text, defines this as positioning. Positioning, he writes, is “simply concentrating on an idea—even a word—that defines the company in the minds of consumers.”

Jack advises that when developing a position in the mind of the customer, it’s best to keep it simple: “Just focus on one powerful attribute and drive it into the mind.” The more involved and detailed the message is, the more confusing it will be and the less people will understand and remember it.

Wal-Mart chose to focus on low prices. When people think of Wal-Mart, they think of low prices. They advertise low or “falling” prices. This positioning became part of the Wal-Mart business model. Kmart, on the other hand, chose to advertise sale items in circulars that were costly to print and distribute and then incurred high costs to stock the sale items. The result was that these costs accounted for 10 percent of Kmart’s operating expenses, compared to less than 1 percent for Wal-Mart.

The concept of positioning can apply to a company, a brand, or an individual. How do you go about positioning yourself in the minds of customers?

• Have a field of specialization and be the expert in it.

• Describe what you do for customers in a way that is easy to remember.

• Look for opportunities where there is a growing need for your expertise.

• Have the credentials to demonstrate your expertise.

• Get the word out about how you help your customers.

Positioning yourself as the person to call when someone needs an expert allows you to shift the demand curve so that you’re sought after. This is a much better position to be in than having to convince people that they should give you a chance to speak with them. One caution: If you are sought after, don’t become arrogant about it.

“When something doesn’t sell well, I never say, ‘Well, people don’t understand it.’ If people don’t understand it, it doesn’t belong in the store.”

—Reed Krakoff, head designer, Coach, Inc.