The 10 Reasons People Buy New Products

Dave Farber
Mar 26, 2019 · 8 min read

I write frequently about Jobs to be Done — a theory that describes how consumers buy products to solve various jobs they’re trying to get done in their lives. I advocate for developing a rich understanding of consumers that allows companies to build successful products and market them in the right way. Yet entrepreneurs, marketers, product managers, and other innovators often get lost in the complexity of their businesses and their new ideas. Meanwhile, a study of my past research projects would suggest that consumers tend to buy products for a relatively small number of primary reasons — at least in a B2C context.

For that reason, I’ve attempted to highlight ten fundamental reasons that people buy new products. Purchasing decisions are certainly nuanced, and a detailed understanding of customers is key. But at the same time, there’s real value in simplicity. Being able to quickly explain the value of your new product will help you convince customers or investors of its promise, and it will also help streamline the development of your product so that you’re focused on what really matters. So as you think about your next product, stop and consider whether you’re meeting one of the ten reasons why people actually buy things.

Why do people buy new products?

People don’t buy things by chance. Even so-called impulse purchases are still adding value for the consumer. The question companies need to contemplate is what form of value they’re offering. I’ve categorized the 10 most common types of value that new products and services can offer into three broad groups: functional, emotional, and social.


1. Reduce hassle — One of the most common reasons people buy something new is that it makes it faster, easier, cheaper, or less frustrating to get something done. Consider P&G’s Tide Pods, which were introduced in 2012. On the one hand, they’re basically just detergent in another form. On the other hand, they make laundry less messy because there’s no cup with leftover detergent that either needs to be rinsed out or remains really sticky. They’re pre-measured, so you’re less likely to use too much and be wasteful. They handle multiple tasks — washing, stain removal, and color protection — in a single product. And for those who need to bring detergent to a laundromat or apartment building basement, they’re much easier to carry. By helping consumers reduce the annoyances associated with doing laundry, Tide Pods have turned into a $2B a year business for P&G, accounting for 90% of laundry detergent sales growth. Even though Tide Pods may cost more than liquid detergent, people are happily paying a premium to avoid the hassle.

2. Provide information — In a world where even incredibly obscure questions can often be answered with a few minutes of internet research, it seems hard to believe that consumers would be craving more information. Yet, information that’s particularly specialized or reliable is still highly valued. Look at newspapers. U.S. daily weekday newspaper circulation has declined every year since 1987. And that’s not just people trading in their print subscriptions for digital ones; digital circulation is falling as well. With so many free ways to get the news, people just aren’t willing to pay for newspaper subscriptions. Except when they are. In 2017, while digital circulation for weekday newspapers was down 9% industry-wide, The New York Times and The Wall Street Journal saw digital circulation gains of 42% and 26% respectively. In 2018, The New York Times reached over 3M paid digital-only subscribers (and more than 4M overall). Even amidst all the free news available, reliable news still commands a premium.

But it’s not just companies in the news industry that can provide information. In a project I did with a major retailer, we found that consumers highly valued a company’s ability to curate a selection of the best products. It wasn’t having the largest selection that was key; it was reassuring customers that they were making the right decisions about what to buy. In fact, in our survey of nearly 3,000 consumers, being able to educate themselves about specialty products was one of consumers’ 10 largest needs gaps.

3. Lower risk or increase access — Consumers often want to do something different, but either they can’t or they’re afraid to try. There can be big value for companies that help lower that hurdle. In 2018, financial technology startups (fintechs) raised $12.4B in funding — 43% more than in 2017. And if you look at the 10 most valuable venture-backed fintechs in the U.S., you’ll see that most (if not all) of them succeeded by creating access where it was previously lacking. Looking at the top 3, Stripe gave small online sellers a way to process payments; Coinbase allowed ordinary people to buy and sell cryptocurrencies; and Robinhood allowed people to engage in the kinds of sophisticated investment strategies that were previously reserved for professional investors. Each of those organizations is now valued at over $5B.


4. Offer entertainment — The fact that you can offer value by entertaining consumers seems so obvious that it’s hardly worth mentioning. Just look at the money spent annually on movies, music, or sports. U.S. consumers are now spending $2B per month on video streaming services — a category that didn’t even exist until recently. In 2009, just 10% of U.S. households subscribed to a paid video streaming service; by 2017, that number had grown 450% to include 55% of U.S. households. While I won’t belabor the point, it’s worth considering how your product can provide entertainment or another form of pleasure. According to one survey, 78% of millennials would rather spend money on a desirable experience than a physical product. So think broadly about what it is you’re offering.

5. Promote wellness — The global wellness market is large and growing. It grew 12.8% in the last two years to reach $4.2T. With healthcare costs rising, the population aging, and consumers generally having greater access to information about their health, that’s not surprising. What is interesting is that companies far outside the traditional wellness realm — healthcare, athletic wear, food and beverage — are capitalizing on the wellness trend. Hilton ranked number three on Fast Company’s list of the most innovative wellness companies for 2018, having recently introduced its Five Feet to Fitness room options. To set itself apart from other hotels and disruptors, Hilton is making it as easy as possible to get in a workout on the road by allowing guests to opt for rooms that have stationary bikes and other pieces of exercise equipment directly in their room.

6. Create nostalgia — It’s hard to argue with the success of Sony’s PlayStation and Microsoft’s Xbox consoles. Yet the best-selling console of 2018 was Nintendo’s Switch. As its competitors battled over graphics and processing power, Nintendo took a different approach, focusing on something much less costly. For sure, it added a portability component that its competitors lacked. But more importantly, Nintendo banked on the same strategy that made the reboot of its NES Classic console so successful: selling nostalgia. Nintendo used nostalgia to generate massive publicity for its Switch launch, but that also meant Nintendo could rely on existing characters and IP to keep its costs lower even as it launched with a good volume of playable content.

7. Offer reward or recognition — Rewards motivate people to make purchases in different ways. People might buy a small dessert as a reward for a week of sticking to a diet. Companies can also more directly provide rewards to customers. OpenTable, which has 46% market share among restaurant reservation platforms, gives patrons restaurant or Amazon gift certificates once they hit a certain number of reservations. By comparison, Yelp, which offers customers an easy way to make reservations straight from the site they’re already using to check out restaurant reviews, has less than 5% market share.


8. Project social image or status — There are endless opportunities to buy exclusivity or items that project a certain status. Nest thermostats let you show off that you’re tech-savvy. A Bentley lets you show off wealth. While it can be hard to predict exactly how your product will be received, conspicuous consumption is often a real goal for consumers. More importantly, many consumers assume a close correlation between price and quality. When P&G rebranded its Olay line of skincare products, it found that increasing the price actually increased likelihood of purchase (to a point) because consumers found it more plausible that an expensive product would have an impact. As you think about your next product, think about what that product is really doing for the customer, and what that customer wants that product to say about them.

9. Provide opportunity to give back — Consumers are increasingly basing their purchase decisions — at least in part — on the social good practices of the companies they’re doing business with. According to one survey, 87% of consumers would purchase a product from a brand that advocated for an issue they felt strongly about. And it’s not just talk — other studies have shown strong correlations between companies’ social responsibility efforts and their financial performance. In the financial services realm, companies like Wealthsimple and Swell offer numerous options so that customers can invest in socially responsible ways. Even as studies show that socially responsible funds tend to under-perform, many customers still choose to invest in them. Impact investing has become a $12T industry.

10. Create belonging or affiliation — The final way that new products can offer value is in creating a sense of belonging or affiliation. Beyond giving customers a sense of community, this approach also builds a more stable and loyal customer base. Those customers are often less inclined to switch away from your brand, willing to pay a price premium, and likely to spontaneously recommend your brand. Vail Resorts — the largest ski operator in North America — doesn’t focus on things like cheap lift tickets. Its EpicMix program offers a social network for skiers who want to share photos and performance data. And in doing so, it creates a community of people who are passionate about Vail Resorts.

So if there are ten main reasons that people are buying products, what does that mean? What can you actually do with that information tomorrow? For people on product or innovation teams, this is an opportunity to broaden your thinking and consider what other ways you can deliver value to customers. For insights teams, this list should provide areas to probe deeply such that you have an understanding of the relative importance your customers place on different forms of value. And for marketing teams, this list should prompt you to think about the extent to which your messaging focuses on features versus value; it may well be time to simplify. Regardless of your role, it’s important to remember that no matter what you think your company sells, you had better pay attention to what your customers are trying to buy.

Dave Farber is a strategy and innovation consultant at New Markets Advisors. He helps companies understand customer needs, build innovation capabilities, and develop plans for growth. He is a co-author of the award-winning book Jobs to be Done: A Roadmap for Customer-Centered Innovation.

Dave Farber

Written by

Author of Jobs to be Done: A Roadmap for Customer-Centered Innovation. Growth strategy / innovation expert

New Markets Insights

We are: Innovation strategy experts • Seasoned market researchers who put Jobs to be Done theory into practice • Award-winning authors of action-oriented books. This is what we’re thinking about.

Dave Farber

Written by

Author of Jobs to be Done: A Roadmap for Customer-Centered Innovation. Growth strategy / innovation expert

New Markets Insights

We are: Innovation strategy experts • Seasoned market researchers who put Jobs to be Done theory into practice • Award-winning authors of action-oriented books. This is what we’re thinking about.

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