A question that many business owners and managers ask themselves: “Why aren’t people buying my product?” There are, of course, a number of reasons why this might be the case.
Of course realizing that you have this problem can be a huge hurdle. A lot of times we are unwilling to see the flaws in our product, sales or marketing, we are more prone to blame external factors for a drop in sales.
Perhaps you have a product that is already selling well in one market, but for whatever reason your product is not selling in a new market. This new market might be a new customer segment, a new location or perhaps a country you are trying to break through in.
We will discuss five common reasons why customers aren’t buying your products and what you can do to overcome these obstacles. So that you can focus on growing your profits.
1. The price is too high
One of the most common reasons people do not buy your products is because the price is too high. People simply cannot afford it.
In contrast, if you lower your price, you might not be able to afford it. But then you are here because you need to sell more of our product, so first you need to consider if your product is something people actually want. This might sound jarring, but you and your business will be better off when you determine this. Try and remove your biases and consider the fact that there might not be a market for your product.
Now that you have done that and you are sure people want to buy your product, the price may still be an obstacle.
2. The price is too low
Price too high is quite intuitive, but missing out on sales because your price is too low… this can baffle the mind. It is nonetheless true. If a product is too cheap we perceive the quality as lesser, and consequently the demand lower. A lot of times it is that midrange pricing that is the sweet spot.
Our pricing charts will give you exact price points and take into account both price walls and price plataus, but irrespective of that what you will get is your pricing in the form of revenue and demand on a Fat-tailed distribution curve.
3. Your marketing has failed
Marketing can be tricky, but you have to make noise to let people know you are there and that you are an option. There are countless ways to do marketing online and offline. But you first need to understand your customers, what they like, what socials they are on and where and how they shop.
For example, if you are an American company launching in the UK, you need to communicate in British English, that is spelling and words. But that is not as necessary if you are a fashion company with a strong brand.
Another great example is an Australian company selling swim trunks in the US, who called themselves budgie [Budgy] smugglers. Which in true Aussie spirit is a bit of a laugh. The same concept was a smashing hit in the UK, but fell flat in the US. The joke did not resonate with the American crowd (here is an explanation for the subtle cultural differences in this case study)
How should I approach my marketing?
If your marketing department or consultants are serious you should know what your expected ROA or ROI is. ROA is a concept guarded by PPC people. Google ads is generally a great way to turn a lead in flow on and off, but it’s more costly than SEO and generally a lower ROI and SEO. Then traditional media, social media marketing and branding have an even lower ROI than both PPC and SEO according to countless studies.
Of course ROI is a notion presumably most in business has come across, but ROA is even more granular. Calculating ROAS is easy. You divide the revenue attributed to your ad campaign by the cost of that campaign. For example, if you spend $4,000 on ads, and your revenue is $8,000, you calculate ROAS by dividing $8,000 by $4,000.
Approach your marketing with data driven decisions, unless you are a savant like Steve Jobs. But for the rest of us mortals, trust the facts.
4. You’re not targeting the correct audience
Often this might be because we tailor the audience after ourselves. But maybe that super fancy wine screw isn’t perfect for sommeliers but it’s a smashing hit with stay at home mums.
If you review the sales data you already have, you should try and find a pattern – look at the demographics, re-evaluate what you thought you knew. Is there a demographic trend that you missed?
Be critical of your current targeted audience, why do they not have the willingness to pay you thought they did? We would always suggest looking at this in contrast to pricing, is it too low or too high? This would help you better evaluate your audience.
Sometimes signalling is a huge influence, we say that we love organic coffee – but we have studies showing that those who do are willing to pay less than those who just prefer that the coffee is better than what they themselves can make.
How should I approach my marketing?
Targeting a specific business or a particular role at a company is way trickier to find accurate data on, than if you are selling to a private person. This is of course because there might be a limitation in numbers and you may lack statistical significance.
Say for example that you are an analytics tool, and you have focused all your sales at a smaller finance company. But you are not getting the results you anticipated, so you go through your data and you try and reevaluate perhaps you are looking at the roles you contacted and sold too. (side note: If it is a SME business you targeted you might not want to talk to an owner, as they might be more interested in holding on to the money). Yet, in the middle of all the data you have one sale to a marketing agency, that sort of happened, now do you investigate this further or what do you do?
The answer is ‘it depends’. How bad are your other sales, does your cash flow allow you to go down this new avenue or can you afford not to? Perhaps a compromise, test it for a day or two, see if you gain any new traction.
5. Your selling in the wrong channels or locations
The final point iterates on point 3 and 4. But it still deserves its own chapter.
Firstly, are you selling online? Is it a simple e-commerce store, maybe your marketing has failed or maybe your targeted customers aren’t shopping online? Or maybe the product is that kind of product you want to feel. Typically more expensive items can be more tricky selling online, as we as customers want to touch it. (But this is also a generation thing, where those who are kids now might very well be happy to buy a car fully online when they are older).
Social media is something you need to consider, are you selling or marketing in those medias where your customers are. Facebook is not for everyone, you can do B2C marketing on Snapchat too. If you are B2B heavy, maybe linkedin is your only option, or is it? Know your audience and where they spend their online time.
Lastly, of course where your customers physically shop is of the essence. Is it at Macy’s or is it at a small boutique kind of place?
As we have discussed, there are a number of reasons why someone wouldn’t buy your product (or service). The first reason is of course that your product might not be as good as you think it is, so perhaps you need to kill your darling. But if you are confident there is nothing wrong with your product, these are 5 crucial steps you need to be on top of.
Good luck with selling your product!