Why do users pay you?

When we are doing event planning and product sales, few people will seriously think about this question, that is, why should users buy our products and services.

I personally think this is the first lesson in the workplace for operations and sales personnel, and it is also the most important link in the cognitive level.

Because why users want to consume is the most important reason.

So today, let’s talk in detail about this topic.

Actually, this question needs to be answered in two parts:

The first is that transactions will only occur when users have demand.

The second is what factors behind the demand accelerate users to complete transactions.

1. Real needs are the core

Jack Ma once mentioned in a public speech that he went to attend an employee sales training.

The trainer asked a very common question, which is to ask the salesperson to sell a comb to a monk.

After listening for 5 minutes, Jack Ma became very angry and fired the trainer after the meeting. Why?

Because Jack Ma believes that monks don’t really need combs, and selling products to customers who don’t really need them is a scam.

In fact, similar cases are very common in our daily lives. When we are doing entrepreneurial projects and exploring customer needs, we will fall into the following two misunderstandings.

1. Create false demand

There are many entrepreneurial projects that are created out of thin air in the minds of the founders. The founders believe that users need certain requirements based on their personal experience and cognition.

But in fact, these demands are just superficial or temporary.

2. Obsession with weak needs

Secondly, it’s not that some demands don’t exist, but the frequency of these demands is extremely low and they are sporadic demands.

The most important point is that such demand is totally insufficient to support the operation of the business model.

For example, on our daily commute to and from get off work, we see many vending machines in the subway, selling cakes, flowers, books, drinks, and breakfast.

It seems that these demands are valid, but the user’s goal of going to the subway is quite clear, which is to hurry.

Few people would go shopping half an hour in advance to catch a subway, and no one would spend half an hour buying a book on the subway.

Therefore, real consumption should be that users have very clear and reasonable consumption needs.

2. Four types of consumption

Then, let’s talk about what categories our daily consumption behaviors can be divided into based on the premise that demand itself exists.

1. Temporary consumption

A friend came to my house today and suddenly wanted to drink some white wine, which was a need I had no idea about beforehand, so I needed to go to the small supermarket downstairs to buy some.

During the company's moving process, I accidentally scratched my hand, and I needed disinfectant and a Band-Aid.

First of all, drinking liquor and using Band-Aids are rigid demands for some people, especially drinking liquor is a high-frequency demand for some people.

However, a special situation occurred, which temporarily stimulated this demand.

2. Induced consumption

For girls, buying fruits is a relatively high-frequency consumption, but with so many fruits, they still have to choose.

For example, everyone used to hope to achieve cherry freedom, but this year in 2021, many people have the opportunity to achieve cherry freedom.

In the past, cheap cherries cost 40 to 50 yuan per pound, but this year, cheap cherries only cost more than 20 yuan per pound.

I've noticed that many fruit stores are having sales promotions recently with prices of 99 yuan per 3 jin or even 99 yuan per 4 jin, and they have to limit the quantity every day.

This is induced consumption. Although the consumption behavior exists, it is the price factor that accelerates users to consume.

In fact, every year’s Double 11 is also an induced consumption, and the most core inducing factor is the merchants’ profit concessions.

3. Planned consumption

If you have experienced getting married, decorating a house, celebrating a birthday, or entertaining during holidays, you should be able to understand planned consumption.

For example, when decorating a house, you need to add home appliances, cabinets, wardrobes, furniture and bedding, all of which you have planned before you spend money.

For example, when it’s your child’s birthday or a couple’s anniversary, you will plan in advance where to go, what to buy, what to eat, etc.

For planned consumption, the merchant’s strategy should be to promote in advance and lock in customers in advance.

4. Long-term consumption

Anything closely related to our daily life involves a lot of long-term consumption, which is both rigid and high-frequency.

For example, the purchase of firewood, rice, oil, salt, sauce, vinegar, tea, fresh vegetables at home, the annual education investment for children, and the paper towels used every day.

Therefore, if you really want to start a business, it is recommended that you look for projects in long-term consumption, the more vertical the project, and the smaller the granularity.

3. What factors influence consumption decisions?

We have analyzed true and false demands and classified different demands. Now let’s explore what factors will affect consumer decisions.

1. Price

Because any tradable commodity has a price.

So I think price is a very important indicator that affects transactions.

However, we cannot simply understand the price factor as the lowest price, because every product and service has a different price system.

For example, the regular price of a pack of tissues ranges from 2 to 5 yuan, but a piece of clothing or a pair of shoes can cost hundreds or thousands of yuan.

I think the price factor is reflected in two aspects:

a. Reasonable price

For new products, it is actually very difficult to find a clear reference target, especially at the moment of delivery and reception of new products.

Including the economic consumption needs we mentioned earlier, users at that moment are more concerned about whether they can buy it and whether the price is within their affordable range.

For example, the prices of food and beverages in scenic spots and on trains are definitely significantly higher than those in everyday community stores, but in specific scenarios, their prices are reasonable.

b. Affordable price

Whether it is Double 11, the opening of a new store, the Fan Festival, or the year-end clearance, what attracts users most in these activities is the affordable prices.

You can buy 5 kilograms of apples for 9.9 yuan, get 10 yuan off for purchases over 100 yuan, 50% off for all items, etc. In short, when users compare with previous purchases or with other merchants, they feel that it is a good deal.

Many times, price is often an important incentive for many unplanned impulse purchases.

2. Function

In the past, people liked to bring instant noodles when traveling, but now people will prepare one or two boxes of Zihaiguo because it has the function of automatic heating.

When you go to buy a car now, people will pay attention to whether it has functions such as seat heating, memory, reversing radar/imaging, automatic parking, and automatic driving.

The functions are mainly manifested in three aspects:

First, are there any necessary functions?

The second is whether there are enough functions

The third is that there are some unique features

3. Quality

Why does the saying "there is no good product at a cheap price" come into being?

Isn’t it because after some people bought it, they found that the quality was really poor!

Quality varies according to different product attributes, such as expired food, lack of content in the course, frequent machine failures, etc.

Including Chery Automobile, the brand from my hometown that everyone joked about before, it did have some problems at the time due to production technology issues.

But this is not a problem of just one company, but a common problem in some industries in China in recent years.

This is why many people are willing to pay a high price for peace of mind.

Besides seeing and experiencing it in person, the most important factor in determining the quality of the product is word of mouth.

For example, when you go to some restaurants to eat, when you decide to try something new, you will choose to check the user ratings of this restaurant online.

This also tells us another point, that we must not only maintain users’ offline reputation, but also pay attention to online word-of-mouth communication.

4. Trust

In some scenarios, many users are not unwilling or unwilling to consume, but they dare not consume.

There are two reasons for this:

a. Worry about quality

Users are afraid that serious problems will arise after purchasing your products and services.

For example, whether the food you eat is healthy, whether the funds are safe when purchasing the financial products you recommend, and whether other lives are safe when undergoing a surgery.

b. Worry about after-sales service

The first and foremost problem the village chief encountered in his offline business this year was the issue of trust.

You suddenly appear in front of users, you don’t have a store yet, you are a small brand, and there is very little information online, which greatly affects users’ consumption decisions.

So we later had no choice but to rent a house and open a small store, and go to some towns to set up stalls every month.

Many times, customers don’t care how big or luxurious your store is, or whether you’ve been on CCTV. What matters most is that they can find you if there’s a problem with the product they purchased from you.

This is also one of the reasons why traditional home appliances, digital products and other products still need to be sold offline in many counties and towns.

Of course, some consumption is based on the premise of building trust first, for example, if you have a store and you have government endorsement.

For some, consumption comes first and trust is built later. For example, if you buy vegetables on the roadside and the quality is good the first time, you will buy them the second and third time, and only then will you buy two or three kilograms.

5. Services

Many people say that the taste of Haidilao is not that good, but many people choose to go to Haidilao.

One of the reasons is that Haidilao's service is very thoughtful and attentive. For example, there will be surprises on birthdays, some snacks while you are waiting at the door, and even when you ask for some fruits to be packed up, the portion will exceed your expectations.

There are also two vegetable stores near the community. One of them is indifferent when you go to buy vegetables, while the other one is not only very welcoming but also gives you one or two green onions no matter what you buy.

So sometimes good service will result in a premium, which is why many luxury online ride-hailing services have a market.