Why People Buy Things, and How to Make Consumers Fall in Love with Your Products
Growing up with entrepreneurial parents, family time always felt like a market research study: “How does this taste? Would you wear that? Ask five of your friends what they think of X brand, then compare their responses.”
When I was in middle school, my mother created a frozen food line with the promise of a healthy, home-cooked style meal. On the weekends we demo’d her food products together at Whole Foods to meet potential and current customers. Sometimes I would sneak away to the frozen aisle to see her products on display and to check out the competition. I thought a lot about how her brand could stand out among the others options on the freezer shelf––from photos, to ingredients, to branding. Then on the drive home, we discussed consumer feedback and ideas worth implementing. In addition to her food line, my mother also led R&D projects for organic CPG food brands, and co-created a healthy, fast-casual concept that piloted in a few airports.
My mother’s creativity and entrepreneurial spirit was, and still is, contagious. She now owns two restaurants with my stepfather, who previously led business development and manufacturing for sustainable apparel brands. They’re both committed to using sustainable materials and ingredients whenever possible, from the decor in their restaurants to the food on the table. More than a decade before it was cool to eat quinoa and wear organic cotton, my parents and their friends were building businesses to make the world a little bit healthier, greener, and energy efficient.
Being a fly on the wall during my parents’ meetings with investors, brand consultants, magazines, food and apparel factories, and retail buyers inspired a lot of my work today. Through CMYK Ventures, I love working with early stage startups, helping founders craft a brand and go-to-market strategy to give consumers a chance to fall in love with a new product.
In today’s economy, consumers have multiple choices for pretty much everything: coconut water, sneakers, airlines, and cell phones. This post looks at why people buy things, what triggers purchasing decisions, and how to create a brand people love that leads to long-term customer relationships.
Say hello if you’d like to share notes on emerging CPG brands, business models, and purchasing behavior. My email is email@example.com
So, why do people buy things?
- Celebrating––A milestone related to personal health, work, or finance.
- Moving––To a new home, apartment, or city.
- Gifting––For a friend, family member, colleague, or significant other.
- Eating––Consumers eat 3x a day, 7 days a week. That’s about 80-90 chances a month for food brands to integrate into someone’s diet.
- Major Life Event––Such as graduating college, marriage, or having kids.
- Vanity & Confidence––Because the product will increase self esteem.
- Behavioral Change––To start a hobby, improve health, or quit a habit.
- To Replace Something––Because our current X is broken, outdated, or the customer experience is atrocious, so any alternative is appealing.
- To Enhance One of Our Senses––Sight, Hearing, Smell, Taste, Touch
- To Enjoy an Experience––Camping, traveling, cooking, etc.
- To Fill a Void––On the wall above a couch, as a distraction from something else in life, or to make yourself feel better.
- To Save Time––Such as a smart coffee maker for easier mornings.
- Just Because—Sometimes we just want to treat ourselves.
What influences a purchasing decision?
Consumers are increasingly curious and conscious of your ingredients, labor practices, and competitors. Here are some key influences and questions we ask ourselves before making a purchase.
- Cost — How much am I willing to spend on a fitness tracker?
- Color — To match my personality, other gadgets, outfit, or home decor. Certain colors can have calming or alarming effects on consumers.
- Quality — And durability. Is this device going to last more than a year? Is it expensive to repair? Will the company sell or send me spare parts?
- Convenience — Is spending a little extra money going to save me time?
- Time — Is it worth it to wait longer for something if it costs me less?
- Savings — Is this device going to reduce my monthly _________ bill?
- Usage — How often will I use this product? Is it multi-purpose?
- Luxury — Is this the highest quality, most prestigious option?
Fashion & Hardware
- Texture & Feel — Which option is the most comfortable to wear?
- Free Shipping & Returns — A smart consumer knows this is baked into the price, but the convenience is worth it. Free S&R also reduces risk when buying an expensive or large item online, such as a new mattress.
- A five star review — On your website, Amazon, or third-party seller.
- A blog feature — Gadget and lifestyle blogs continue to influence purchasing decisions, and can help people discover your product. In addition to well-respected national and global media outlets, look for blogs that focus on your niche (such as health and wellness) with dense communities of readers who are more likely to buy things.
- Product Safety — Does the product have sharp edges? Is the device going to overheat? Is it safe for a house with kids and pets?
- Personal Safety––Does this product make my life or hobby safer?
- Battery — Which option has the strongest battery, especially for traveling?
- Cross Platform / Data / IoT — Which option syncs with my laptop? Which option plays well with my other gadgets, such as home speakers?
- Trust & Security — Which company do I trust most with my data? Parents who put a live streaming camera in their kid’s nursery want to know the live feed is secure and only accessible to their family.
Food & Ethics
- Labor Practices — Which company treats/pays their employees fairly?
- Ingredients — If food, which product is the healthiest option? Am I allergic to any of the ingredients?
- Taste — Which option appeals most to my taste buds?
- Happiness — Is buying this going to make me happier?
- Health — Will this fitness tracker or these new sneakers encourage me to going to the gym more often? Is this going to help me kick a bad habit?
- The way it makes you feel — Depending on someone’s lifestyle, they may be looking for products that give them peace of mind, or a product that gets the party started.
Lifestyle & Cool Factor
- Hobby — Does this product make one of my favorite activities more fun?
- The brand your friends or favorite ‘influencers’ use — From shoes to phones, we tend to buy the products our friends have or recommend.
- Does this make me look cool? — Kids buy the next big thing to fit in.
Retail & Visual Merchandising
- Store Set Up — The placement of your products in-store will impact sales. Some food companies pay for top shelf or eye level placement at markets.
- Selection — If you’re buying food or personal items at a bodega, you’re stuck with the small selection of brands they offer and the higher prices.
- Packaging & Product Design — The color, look, and feel of your brand matters alongside other options at the supermarket, mall, or retail shop.
- What’s in Stock? — Consumers might try your product because their favorite option isn’t available. You might even convert them!
- What’s on Sale? — Some consumers will seek the lowest price items or those that are on sale, regardless of taste, ingredients, or quality.
What do people Need vs. Want to buy?
Think about your target customer and what they commit to spending money on every month. Is your product a monthly need, a want, or a less frequent, expensive purchase? If your product doesn’t fit into an existing purchasing category, how will you convince customers to buy what you’re selling?
Needs (Based on Typical Monthly Expenses)
- Water & Beverages
- Heat & Hot Water
- Telecom Plan
- Home Wi-fi
- Maybe: Caffeine, Pet Food, Child Expenses, Education, Student Loans
- Personal care items (beauty, hair care, nutrition)
- Cleaning and laundry supplies (and other misc small household items)
Larger Lifestyle & Household Purchases (every 1–10 years)
- A new Mobile Device
- A new Personal Computer
- Travel Luggage
- Home Decor & Renovations
- Kitchen Tools & Gadgets
- Sheets & Towels
- Washing Machine
- Entertainment — Books, Movies, Music, Cable, Games, Virtual Reality
- Outside Entertainment — Travel, Restaurants, Movie Theater, Concerts
- Clothing, Shoes & Accessories — Beyond what you already own.
- Gym Membership or Fitness Devices — Health and wellness is necessary, but a gym membership isn’t accessible or affordable to all.
- Smart Home — Gadgets that connect to the internet and mobile phones, giving consumers control over their home’s electricity and temperature.
- A Personal AI — To automate your life and keep your pantry stocked.
- Wearable Devices — Such as smart watches and fitness trackers.
Top Household Purchasing Categories in 2015
1010 Data compiled a study of top CPG categories for online sales in the U.S. in 2015. Pet Food was the clear winner with almost $700M in online sales.
Make People Fall in Love With Your Product
Differentiators to help your product stand out and ways to build a long-term relationship with customers. You don’t have to do all of these things at once!
Create a Quality Product
- Design––Create visually appealing prints, packaging, and hardware.
- User Experience––Make your product easy and joyful to use, and share. If your product requires assembly, offer phone, video or offline support.
- Make it Magical––Wow us with AI, VR, and devices that easily sync.
- Make it Multi-purpose — But focused around an activity. Such as as a gadget for the kitchen, or a camping light that also charges a phone.
- Make it Affordable — Consumers are willing to try new ‘vertically integrated’ brands to benefit from you cutting out the middle man.
- Make it Customizable — Either through a special color combination, ability to add your own digital artwork to the device display, or custom phone cases to match a customer’s personality and style.
- Make it Travel Friendly — Is your gadget or beauty product TSA approved? Is it lightweight or practical enough to travel with?
- Multiple Colors — Some people like variety and mix-match options.
- Cater to a Niche Diet or Lifestyle — Consumers are very loyal to brands that produce thoughtful allergy and diet friendly products.
- Create Products for Underserved Markets — Develop a modern solution and brand for a demographic who doesn’t currently have a brand they’re loyal to that understands and respects their needs.
- Create with Quality in Mind — Would you rather have a customer make one purchase from you a year for $200, or ten $20 purchases?
- Reliable Batteries — Can’t say this enough. Build an enduring battery.
Make the Experience Memorable, and Worth Sharing
- Buying Experience — Creating a product that changes behavior is easier than creating a buying experience that changes behavior. Make your product convenient to purchase across web, mobile, and/or retail.
- Shipping & Returns––Remove the pain of returning/exchanging items.
- Customer Service––Make it easy to return your products if a customer isn’t 100% satisfied. Be patient with angry customers and answer their questions as soon as possible. Turn their frustrations into opportunities to re-gain their trust and improve your product suite. When your team is small, create a FAQ and templates for typical questions from customers.
- Live Chat––Try FB Messenger and Intercom to chat with your customers.
- Immersive Retail — Help consumers visualize what life would be like if they were to purchase your product. Help customers try hardware in your store, test drive a car, or playing musical chairs until a customer finds the perfect dining set. Create fun and welcoming retail experiences that can be enjoyed with friends and are share-worthy on social media.
Keep Education, Community & Empathy in Mind
- Educate Your Customers––Teach people how to use your products through photos, videos, and user generated content from the community. Use UGC to share customer stories and celebrate their use cases/ideas!
- Offer a Membership — To encourage and reward loyal customers.
- Engage Your Community––Connect your customers to each other in forums, comments, and offline at events and meetups.
- Create New Products Inspired by Your Community––Involve your customers in product development, such as a survey asking, “Of these three colors, which one should we produce for our next batch?” By controlling the survey options, you’ll be happy to produce the results!
- Make People Feel Good––About the purchase they just made. If you’re selling a wellness or sleep related product, say something via email like, “Welcome to a good night’s sleep with your new mattress. We’re here if you have any questions, comments or ideas for improving our products.”
Develop Trustworthy Products, Relationships & Partnerships
- Play Well with Other Products––Consumers buying ‘Smart Home’ devices want to know your product connects to their laptop and apps.
- Partner with Other Brands — On original content, giveaways/contests, to create limited editions (colors, styles, flavors, new products), and free gift with purchase promotions to highlight each other’s products.
- Reward Purchases––Repeat customers, group buying, two for one, give cash back or credit back towards your products. People love a discount!
- Anticipate Needs and the Next Purchase — If your product is a monthly, quarterly or annual purchase, (such as personal care items, or a water filter system), politely nudge your customers with a targeted email, and perhaps a special offer/discount to influence their next purchase.
- Surprise & Delight––Include something extra in the box, like how Apple includes two branded stickers with every hardware purchase.
- Birthdays––If you have the data, send customers a gift or discount on their birthdays. Sephora does this through a free gift (with or without purchase) that is redeemable on any day during your birthday month.
Build a Brand Worth Following
- Create Content to Share Your Brand Story––Create visual stories that attract your target customers and speak to their current or dream lifestyle. It’s important for these stories to live across multiple channels: Your site, advertising, social media and retail.
- Engage on Social Media––Your customers are already on Instagram, Twitter, Facebook, Pinterest, Snapchat, Vine. Use these channels to keep in touch, host contests, and discover product trends in your industry.
- Advertise with Empathy––Ads should make people feel better about themselves, not inadequate and empty without your product.
- Brand Loyalty — If you’re lucky, consumers will trust your brand over time and buy whatever you put in front of them. Don’t abuse this trust.
Don’t Be Evil, Be Human
- Transparency — Share stories, photos, and videos of your supply chain and where you source your materials or ingredients.
- Be Ethical — It’s increasingly difficult to hide harmful ingredients and unfair labor practices. You can differentiate from legacy CPG brands by being good to your customers, employees, and the planet.
- Give Back — Integrate a philanthropy component into your business model, such as one-for-one donation. Examples: Warby Parker, TOMS.
CPG trends, biz models, and buying channels
Creating a product that changes behavior is easier than creating a buying experience that changes behavior. Make your product easy to buy!
- AI & Voice––Next level of smart gadgets that automate search, ordering, tasks, and integrations with other apps like on-demand transportation.
- Internet of Things — Devices that connect to wi-fi and other gadgets.
- Cross Platform — Devices with software that is easily accessible across the web, mobile and tablets–and sometimes, other devices.
- Sustainably Sourced––Materials or ingredients that protect the planet.
- Home Try On––Examples include Warby Parker and True & Co.
- Discovery––Birchbox launched a trend of curated subscription boxes.
- Mass Customization––Examples include Nike and Function of Beauty.
- Showrooms––b8ta, based in Palo Alto, is a showroom for trying the latest consumer hardware. Visitors can try and buy at the store.
- eCommerce Only — Examples include Brilliant and Bonobos.
- On Demand Transportation––Ride-shares, car rentals, and test drives.
- Buy, Sell & Swap––Examples include Tradesy and Poshmark.
- Curated/Assisted Buying––Examples include Trunk Club and Bombfell.
- Group Buying / Bulk––Examples include Boxed and Costso.
- Sell Direct to Customers at Wholesale Prices––See Thrive Market.
- Paid Memberships––Offer discounts to consumers via your annual club.
- Rent, Don’t Buy / Access vs. Ownership––Going to a wedding? Rent the Runway and The Black Tux will rent you the perfect outfit.
- Subscriptions––Rent the Runway recently introduced a monthly Unlimited membership. Rocksbox and Le Tote also offer subscriptions.
- Buy it Once––Create a durable product that is designed to only be purchased once, with a lifetime guarantee for fixes or upgrades.
- Curated Online Shops––Amazon has a store for crowdfunded products.
- Buy Now, Pay Later––Blispay and Bread are reinventing the lay-away model, offering consumers financing for medium to large size purchases.
- On-demand––Retailers such as American Apparel and Sephora are now available for local delivery in select Postmates cities.
- Meal Delivery Kits––That include everything you need to cook dinner.
- Home Setup — Enjoy, based in San Francisco, is a new way to buy and learn how to use hardware products like tablets, TVs, and drones.
- Same or Next Day Delivery—Free or unlimited shipping/delivery with purchase of a membership, like Amazon Prime, Instacart and Postmates.
- Pre-orders––Through your site, like Tesla recently did for the Model 3.
- Crowdfunding (rewards based)––Kickstarter and Indiegogo are the most popular and trusted platforms for crowdfunding at scale.
- Crowdfunding (equity based)––CircleUp, who recently announced a partnership with the Collaborative Fund to invest in consumer goods.
Additional Business Models & Marketing Tactics
- Retail––94% of total retail sales are generated in brick & mortar stores.
- Direct to Consumer — Sell your product only via your website or app.
- Free App with Purchase––Pair an app with your device to help your customer understand and share the data your device generates.
- Buy a Product, Order Refills––Keurig, Soma Water, LivBlends, Juicero
- Free Gift with Purchase–– A classic beauty counter marketing tactic.
- New Packaging, Same Great Taste––Redesign your packaging to give your brand a chance to reach a new, or wider demographic.
- Now With 30% More!––Have excess inventory, or maybe you reduced the cost of your materials? Give a a little bit more of a product value to compete with the ketchup brand next to yours on the grocery shelf.
Who invests in CPG and consumer hardware?
- Collaborative Fund––goTenna, Karma, Walker &Co, Soma Water, Simply Gum, Blue Bottle, Hampton Creek, Outdoor Voices, Sweetgreen, Exo
- Forerunner Ventures––Aloha, Away, Birchbox, Bonobos, Glossier
- BBG Ventures––Rocksbox, goTenna, Din, Kiwi Crate, Thesis, Guildery
- General Catalyst Partners––Honest, Warby Parker, NatureBox, Kuvée, M. Gemi, Outdoor Voices, Chloe & Isabel
- RRE Ventures––Electric Objects, The Black Tux, Jibo, Trumaker, Sols, One Drop
- Bolt––Kuvée, One Drop, PetNet, Meural, Pavlok, Qleek
- True Ventures––littleBits, FitBit, Blue Bottle, Peloton
- Andreessen Horowitz — Julep, Lytro, Walker & Co, FiftyThree, Jawbone, Oculus, Ringly, Shoedazzle, Soylent, Twice
- GV — Nest, Blue Bottle, Walker & Co, Juicero, Le Tote
- Obvious Ventures––Beyond Meat, Olly, Urban Remedy, Diamond Foundry, Miyoko’s Kitchen
- Brand Foundry Ventures––Brilliant Bicycles, LOLA, JewelBots, Caeden
- Brooklyn Bridge Ventures — Ample Hill Creamery, Hungryroot, Ringly, Canary, goTenna
- BoxGroup––SmartThings, Orange Chef, Karma, One Drop, Romotive, The Black Tux, BlueApron, Glossier, Harry’s, LOLA, Warby Parker, Aloha
- Red Swan Ventures––Bonobos, AYR, Birchbox, Warby Parker, Trumaker
- First Round Capital — Aloha, Birchbox, Chloe & Isabel, Warby Parker, True & Co, SmartThings, Poppin, Blue Apron, Boxed
- Metamorphic Ventures––Stowaway Cosmetics, Thrive Market, Away
- First Beverage Group––Purity Organic, Health-Aid, Project Juice, Q Drinks, Juicero
Want to be added to this post? Email firstname.lastname@example.org. Investor data sourced via mattermark.com, a database of 1.5M private companies and their investors.
Related Reading & Resources
- The Basics of a Brand Identity from CMYK Ventures
- Debbie Millman on Why Today’s Design Led Brands Thrive
- Why products should be more like Beyonce by Continuum
- Bolt analyzes the Keurig business model, who invests in hardware, and barriers to entry for hardware startups.
- Women buy 85% of consumer products and are responsible for 60% of business purchases.
- CB Insights looks at The Battle for Consumer Goods: Funding to Private CPG Companies Increases 8x Since 2011 and The Most Active VCs in the Internet of Things
- Ezra Galston from Chicago Ventures analyzes The Full Stack Attack on the Home Furnishings Market
- How to Become a B Corporation