Startup founders in love with their own product: why would a customer *actually* buy it?
Why do customers buy certain products?
Why did you choose to subscribe to Netflix over Amazon Prime? Why are you a Basecamp user rather than a Notion user?
…And why do you steer clear from certain products?
I’ve worked with the founder who’s product-led and truly believes the product alone will generate paying customers. I’ve also worked with the team that literally throws away cash by adding fancy new features because they like them, not a customer.
If you’re looking to create and validate a customer base, neither approach cuts it. You have to talk to customers or potential customers, because you can’t build a commercial business on guesswork.
A lot of the customer development work I do for startups is rooted in the customer development work from The Startup Owner’s Manual. It’s all about getting out from your desk, talking to customers and getting one step closer to why people buy. It’s a process I’ve genuinely seen results from.
When I was running customer development work at Careercake, I was up against the clock. I’d read the books telling me to talk to customers and create buyer personas. But there was nothing telling me how to get from A-B. There was nothing teaching me how to start this entire process from scratch.
We’d hit the point where the growth had stalled, the market we thought we lived in didn’t quite make sense, and there was a real inconsistency with the data. Something had to change.
Over a period of six months, we embarked on this project which results in a change to business model, a change in market direction and luckily for us, insights into why our customers bought.
This post is a combination of the steps we took and ways you can apply it to your startup if you’re at a crossroads with learning why your startup customers may buy.
Grab the guide that I created off the back of this article, How to talk to people and land your first customer. Or, learn how edtech platform, MiFuture validated its startup’s audience.
The four areas that’ll help you to unlock why a customer may subscribe to your startup’s product:
Investing in the customer buying process - saying goodbye to buyer personas.
What is your customer hiring your product to do?
Removing bias when conducting interviews.
Understanding that your competition isn’t who you think it is.
Why talk to customers to learn about their buying habits? The case for customer development.
I’m currently part of the customer-led growth programme, run by SaaS growth consultants, Forget the Funnel. And boy am I learning some insights. Take these stats from the Aberdeen Group they shared on the importance of customer-led growth.
Those businesses who invest in customer-led growth and talk to customers report:
18x faster sales cycle
56% more opportunities to cross-sell / up-sell revenue
54% greater return on marketing investment (which, let’s face it is ALWAYS under scrutiny)
Yet, despite the benefits, we’re still not talking to customers. We’re not investing in the time and research. We’re still making excuses. (Don’t worry, I won’t rant for too long on this, as I’ve already written about Stop Making Excuses and Talk to Customers).
Before looking at the four steps to consider I promised you a minute ago, here’s some helpful thinking before you go into it. They form part of the customer development manifesto by Blank and Dorf.
> Customer insight is only useful if you can actually change the product you’re developing with speed.
If you can’t, your customer will go somewhere else.
> Failure is part of it, embrace it.Some customer interviews will go well, others will go horribly wrong. Accept it.
> You can’t expect to ‘get the sale immediately’.
Startup metrics are totally different from that of an established business.
If you keep all of these points in mind when looking to unlock why a customer may buy your product, it’ll help you long term. I promise.
The customer buying process - say goodbye to buyer personas.
Buyer personas are great, but how do you use them to get from A to B? Just knowing who you customers are doesn’t cut it.
“Lucy is 36 years old and lives in Cardiff with her partner.
She likes going to the pub, cycling and watching RuPaul’s Drag Race.
She has a liberal voting record.
She’s been to Japan”.
Based on the above then, what insights could the team at Apple use to learn why I have a Mac?
What, from this information, could the marketing team at Deliveroo use to truly understand why I order pudding on Thursdays?
Buyer personas are great for target audience segmentation - “Lucy identifies as female, gives her location, interests, political leaning”. But they don’t tell me WHY I subscribe to the things I do.
In the words of Michelle Visage… “Stop relying on that [buyer persona]”.
You need to dig deep into the customer buying process.
Say hello to the actual customer buying process
Customer Camp’s version of the buying process is one that really resonates with me.
They suggest the buying process starts with a trigger event, and the process to the eventual / potential sale is moved along by passive and active searching as well as catalysts.
Here’s what happened when I bought a Shark hoover using their framework.
For me, the trigger that set me off on my journey to buying this new hoover - which, at £200 was quite the investment - was getting Huck, our new dog. Like many people, we took advantage of working from home and thought we’d get a COVID puppy because we would be around to ‘train’ him.
Now, the thing is, with two dogs comes two loads of mess. Two lots of mud, two lots of fur, two lots of plastic bits wedged into the carper.
We’d needed to replace the hoover for a while, but never got around to it. Because that’s what grown ups do. So we kept using the old hoover that did a mediocre job of cleaning up after two dogs.
Then, catalyst 1strikes! The existing hoover gives up. We need to get a replacement, and quickly. At this point, as we start looking into what’s available to us (Dyson? Nah, too expensive) we come across the Shark brand.
A brand, I’ll add, that totally gets it is marketing to pet owners. In the attributes they put forward, they talk about the suction part that’s great at picking up dog hair, they talk about the quiet setting. This process also involves me searching for product reviews, checking out articles on this brand. I ask my friends.
We’re price sensitive, however, and wait for some kind of sale. Then Prime sale pops up. (Catalyst 2). We buy the hoover, it turns up and we spend our days taking turns cleaning each room. Genuine fun for all the family.
By asking about my buying journey, Shark’s marketing team could learn:
The steps I took throughout the customer journey.
The catalysts that moved me along the process (hoover packed up, waited for Prime sale).
Which marketing channels I used to check I was making the right decision.
The product’s attributes that resonated with me as a pet owner.
Applying it to your startup
When interviewing your customers, get them to talk about their buying process. Consider moving away from the traditional buying process (awareness, consideration, evaluation) and consider the external factors that can move a process along. People don’t buy products randomly.
In my case, Shark had no control over my old hoover packing up, but they had optimised for product reviews, highlighted features such as the quiet mode, to tell me I was making the right decision.
Need some inspiration? Here’s how to apply what you learned in the customer interviews to your marketing.
2. What is your customer hiring your product to do?
When I was buying the hoover, was I looking for a clean carpet or was I trying to achieve a much bigger goal?
This line of thinking leads me to introduce you to the Jobs to be Done (JTBD) framework.
In essence, it’s a development framework that assumes a customer has a goal they wish to achieve and to do so, they hire your product to help them on their way.
In other words:
It’s not what your product does, it’s what it helps your customer to become.
Conducting JTBD exercises are important because they provide a way of stopping you from talking about your product’s features. For more info on this, check out What is Jobs to Be Done.
Let’s look at Super Mario for an example.
Super Mario hires the fireflower - not to kill the baddies - but to become a different version of himself. One that goes on to save Princess Peach, wherever she is.
Image by SAMUEL HULICK
Applying it to your startup:
When talking to customers think about these points:
What is the job your customer is hiring your product to do?
Understand that your customer only wants to hire one product to get this job done.
Which customer will pay the most to get the job done the best?
In the real world:
Netflix. They use it to uncover who their competitors are. Spoiler: after conducting JTBD, they realised that Amazon Prime wasn’t their main competitor… there were a number of things, including podcasts, tv and sleep.
McDonald’s. Clay Christensen use of JTBD found out that the reason why 50% of milkshake sales occur before 8:30 because they were being purchased by customers looking for company for a long commute.
3. Removing bias when conducting interviews
When conducting customer interviews to understand why people bought Careercake’s products, I learned two important lessons.
You have to interview people that will actually buy your product.
Bias questioning can totally muck up your results and give you false positives/negatives.
Here’s a story to illustrate.
“So…? How do I look?” You say to your flat mate with a cheshire cat grin. You’re modelling your first lockdown haircut and you’ve decided to go crazy.
The thing is, your flatmate is super confused why you’ve gone for the pink mullet, but doesn’t want to hurt your feelings. Your questioning was biased; they don’t want to hurt your feelings. So of course they are going to say you look amazing.
This premise is the same idea as the thinking found in a book called the Mom Test, written by Fitzpatrick. He claims that if you’ve got a great idea for a business, you can’t ask your Mum’s opinion because she’ll lie and tell you it’s amazing, because she’s your Mum.
The same goes for customer interviews.
If you only ask people who are your mates, of course they are going to lie and tell you it’s a great idea. But the thing is, you can’t do anything with that insight.
One way to get around it is ensuring you ask the right questions.
Remember Careercake’s customer development project? We spoke to a range of b2b customers, prospects and target market audiences to learn more about why people would or wouldn’t buy our product.
Here are just a few of the questions (built on from the Mom Test) which helped us to unlock key information.
What are your goals/challenges?
What is your main problem? How serious is it?
How do you currently solve it?
Talk me through the last time it happened?
What should I have asked you, that I haven't done so already?
We tried a different line of questioning, one that avoid fluff, bias and was about the past events.
The result? We completely changed our business model.
I am not suggesting that you need to be this drastic, however, we unlocked a number of opportunities - new markets, new positioning, the introduction of a subscription model - that helped us to refocus and grow.
4) Your competition isn’t who you think it is.
“We’ve got no competition”
There’s a fine line between caring too much about the competition and neglecting it so much you miss out.
I have worked in the business where we are obsessed with the competition, stalking their every move. It was unhealthy. I have also worked with the business who genuinely thinks they’ve created a new category and doesn’t need to look at anyone else.
Big mistakes.
The thing is there are three main types of competition - direct, indirect and replacement - all of which are competing for your customer’s attention.
Direct - like for like
Indirect - same category, but perhaps different use case, lacking features
Replacement - totally different, never thought about them competing.
They are all competing for the same jobs to be done. Your customer is putting you all in the same bucket. So it doesn’t matter if you don’t think they’re on the same trajectory, there’s still a chance they can take .
Building on the example from earlier, take Netflix.
Competition target / JTBD: someone’s spare time.
Direct competitor: Prime
Indirect competitor: BBC iPlayer
Replacement: Sleep
Let’s use Careercake as an example.
Competition target / JTBD: getting a promotion/ pay rise.
Direct competitor: LinkedIn Learning
Indirect competitor: L&D manager delivering face to face sessions
Replacement: Get a new job somewhere else.
Applying it to your startup:
When conducting your competitor analysis, yes look at pricing, yes look at features, but above all else… look at it from your customer’s lens.
What else is out there that would give them the same outcome?
In summary…
Talk to your customers, don’t pay it lip service.
Understand the trigger and catalysts that can impact a buying decision.
Avoid asking your friends for their opinion.
Your competition isn’t who you think it is.
Oh, and read through How to talk to people and land your first customer. There’s heaps of advice that builds on from this guide and shows you how I applied it.
Or, perhaps you’re still working things out. Then check out The Startup Founder’s Guide to Validating an Idea.
