We are in the middle of gearing up for the launch of a brand new product.
As I was working through the process, it took me back to basics and made me think, how do we promote this thing? How are we going to make sales?
One question kept popping up: why do people buy?
I wanted to find out the smallest building block for why people make purchases.
So I went down a bit of a rabbit hole and I want to share what I discovered with you. It’s not new, but it’s valuable.
It takes us back to first principles and asks, what is the simplest building block for business? And how can we create something successful out of that?
I think it’s easy to get lost in marketing books, courses, or advice from gurus and not truly understand why certain things work. I’ve been in business for 18 years, and even with all my experience, going back to basics was really enlightening. It was useful for understanding my situation and what I’m about to engage in for this promotion.
So, let’s dig into that fundamental question: why do people buy? What gets them to actually give you their credit card details and make a purchase?
As far as I can tell, it all comes down to the humble transaction. There’s nothing smaller that you can distill business down into other than that. A transaction is the core of business.
Let’s break down the word transaction…
It’s like two words in one: trans and action. Trans means to cross, and the root meaning of action means to drive through. So a transaction is a crossover of money and a drive-through of goods or services. It’s an action that goes across and gets driven through.
There’s no business unless there’s a transaction. Your business isn’t successful until you have goods and services to transfer and get paid for them. If you don’t have that, then there’s no business.
It’s as simple as that.
The transaction is the most basic building block for business.
Once you’ve established that, you need to maximize it if you want to increase the dollars in your bank account. There are only three ways to do that:
- Have more transactions
- Make transactions more frequent
- Make transactions bigger
Think about how to get more transactions, how to make them more frequent, and how to make them bigger. These three things are the key to optimizing transactions.
Going back to the original question, why do people buy? Or more precisely, why do people transact? This is where it gets interesting. Let’s dig into it in more detail.
What does it take to create a transaction? There are three key elements:
- The Individual Creating the Transaction (ICT)
- The Offer
- Trust
You need the right person (ICT), the right offer, and trust. Without any of these three elements, the transaction doesn’t take place.
For the ICT:
- Who are they?
- Are there enough of them?
- Can you reach them?
- Do they have money?
For the offer:
- Are you solving the right problem?
- Are you solving it at the right time?
- Are you solving it at the right price?
For trust:
- Reliability
- Consistency
- Integrity
All these elements must be aligned for the transaction to take place.
Let’s visualize something…
Imagine the ICT as a person with an unfulfilled desire. There’s an obstacle in the way, and your product or service helps them overcome that obstacle. Your offer is like a door with a lock that they need to unlock to access your product or service. The lock represents solving the right problem, at the right time, and at the right price.
Once they unlock the lock, they get access to your product or service, which helps them overcome the obstacles and fulfill their desire. After that, they’re likely to refer others to you.
This is the basics of business. Everything is built around the transaction, and understanding this can help you build a successful business.
We went through this process with our new product, and it was so revealing. We created a spreadsheet to map out the desires, obstacles, solutions, and offers. It helped us see what we were solving for and what we needed to improve.
Hope you found this useful!
