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  • Daniel Kraft

The Fundamentals of Positioning. Understand Who Buys, What They Buy, and Why They Buy?

Imagine you are selling an app that allows an employer to reach all their employees. Who is buying this? About a decade ago, three founders each started a company, and they came to three fundamentally different answers.


Markus founded Sitrion, focussing on HR, Martin started Staffbase, concentrating on Internal Communications, and Cristian started BeeKeeper, focussing on the frontline workforce. Who was right?


Fast forward, Sitrion merged with another company and did an IPO. Staffbase became a Unicorn worth more than €1.1 billion, and BeeKeeper is in the Swiss Soonicorn Club, indicating that a billion $ valuation is just a matter of time. Three founders, three different but successful paths.


As early founders, we often believe that everyone needs our product or service. That is rarely the case. Success comes with a clear understanding of who is buying, what they are buying, and why.


Who, What, and Why? Defining Your Positioning


Not everyone can and will be your customer. And that is a good thing - because it gives you the possibility to be the best in your specific market. And you need to be the best to survive long enough to scale your business.


As we learned from Amos Schwartzfarb’s book Levers, the answers to those three simple questions are the essence of your business, the driver behind your startup. Before you design your logo or even think about your pitch deck, you should answer them:

  • Who is your customer?

  • What are they buying?

  • Why are they buying it?

Almost every founder we talk to can articulate the 3W in the abstract, but once we dig deeper, you’ll be surprised how many founders don't have a clear answer - even at a larger scale. Try it yourself; take a minute and write down your answers in a table like the one below.


Source: Moinland illustration based on the book Levers.


Who Is Buying Your Product?


The Who seems the easiest. Yet, three smart founders came to different conclusions. The key to a great Who is to narrow it down as much as possible. All three founders sell to companies with many employees. But so does almost any B2B Software vendor. When you’re digging deeper you'll find the important nuances:


  • Markus and Sitrion focused on the HR buyer in large organizations.

  • Martin and Staffbase aim for Internal Communications in large companies.

  • Cristian and BeeKeeper on companies with many non-desk workers.


Each of these buyers are fundamentally different people. Yes, when you sell B2B you still sell to a person with their needs, feelings, biases, and challenges. To define your Who, you need both the ICP (ideal customer profile) and the buyer persona. In essence, the ideal company and the ideal person within the company.


Before you get your PhD in persona-building I’d recommend reading the book and taking a lesson from Rand at Sparktoro. Both are great investments of your time.




What Are Your Customers Buying?


Now you might think: “That’s an easy one - they buy my product!” Let’s think back to the example of the three founders. They all offer the same general product, an app that reaches all employees. The What is not what you sell, but what they buy. It helps to ask, how would your customers express that?


  • Sitrion: We provide our HR Self-services to all our employees.

  • Staffbase: We reach all our employees with our communication.

  • BeeKeeper: We connect with our unconnected field workers.


All customers purchased the same type of product but all of them had a different way to express this. Only if you immerse yourself in the language of your customers, you’ll be able to articulate the What.


This change of perspective is key to understanding what your customers are actually buying. Stop thinking from the inside out and communicating why your product is so great. Instead, we're looking from the outside in: What do they need your product to do for them, how does it fit into their lives, and what problem does it solve?


Why Are Your Customers Buying Your Product?


The last question is all about Why your customers are buying something. This is probably the most difficult question to answer, but the most important one that can convince your target audience.


As we can see in the examples above, purchase decisions depend on who you are and what you are trying to achieve - and are often not rational but emotional. Let’s go back to our three founders and see how their customers expressed their Why:


  • Sitrion: We made a big investment in HR Self-services but many of our employees don’t use them. We need to increase the adoption to justify the investment and reduce expenses in HR administration.

  • Staffbase: Our company goes through a lot of change and we need to be able to support the change across the organization. We need to take control of the employee communication or they’ll find external sources.

  • BeeKeeper: Most of our value is generated by employees in the field but they are disconnected from the company. They are the core of our business and we need to take care of them.



Want to Know More About Positioning Your Startup?


Hopefully, this gives you a good 101 of finding your Who, What, and Why. In our founder coachings we deal with many strategic and emotional challenges of scale. Having your 3W in order clears the path and provides a good framework to set goals, empower your people and make sure you always have enough cash in the bank.


Want to learn more about our coaching? Get in touch with us!


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