Why should I buy from you? Why should you sell to me?

So if you’re selling the same thing everyone else is, why should I buy it from you?

 This is not a sales session, actually it cannot be considering I’ve never been in direct sales, but here’s what it can be. A shopper’s perspective on choosing a seller.

A buyer looking at a seller and asking a simple question which is “Why you?”

If you are a marketplace, a retailer or an aggregator – what really is your differentiator? Is it convenience? Is it price? Is it service? Is it choice? Or is it experience?

Whatever it is, it is sustainable and scalable? I’m assuming you are looking at profitable.

If your answer to either one of the two questions above was a no, then why are you competing in a space that you will not be able to hold on to? Let me correct that – hold on to for a long time.

The basics of business teach us that businesses that have thrived have thrived because of repeat customers, because of loyalty and these businesses weren’t what we call fly by night operators. They focused on getting our business and keeping it. It was a ground rule. So acquisition of a large base was important, however repeat business more so. This would bring me back to the basics of cost of acquisition. Acquiring new customers/consumers is a tough job, keeping them coming back is even tougher, however to my mind the latter is more lucrative in the long run.

So why are so many businesses busting up so much money on the first time buyer. Is it because they acknowledge that that’s the only way to remedy the wound of a lack of repeat business from the existing pool which isn’t a loyal one or is it because they’ve seen the value of the pareto principle from the existing base and want to expand the size of the base per se by adding more customers to it? Either way the logic of repeat business wins.

The next logical step usually is to try and up the basket value of the loyal base. So the profits get raked in by the 20% loyal footfall and the absolute size of the base for that 20% keeps increasing through acquisition of the new.

The new trends however of a lot of new business models seem to be reflecting a move away from this basket value. Which earlier was a performance metric, known in some circles as GMV (Gross Merchandise Volume). GMV to me seems more like a projection for potential investors and justifying sales at losses than true realization of value in any basket, at least not any basket at the sellers end. So let me call it out as being very different from real ATV (average transaction value) or basket value. 

So why is getting repeat purchase so hard? Is it because your differentiator is just price? If that’s the case not everyone can be a Walmart and esp. not in niche categories. So then are you really the cheapest across your assortment or have you floated some loss leaders to create a perception like so many of the offline and online Indian retailers have done?

If you’re attracting the price sensitive deal seekers – will you be able to keep them away from a competitor who undercuts price further and if so for how long? Have you succeeded in launching your own private label and making that work for you by encashing on the footfall through the perception of being the cheapest destination? If not, then how is your differentiator a competitive advantage? Do you even have one?

Is your unique selling proposition - choice or assortment and how do you plan to beat the virtual world where that is unlimited and that too with little or no investment in real estate and warehouses which would cost you. Is your USP therefore your network/reach which caters to fast fulfillment of orders?

Also as a consumer yourself, do you always look for lots of options when you buy or do you look at relevant options and is that more important than a seller just housing everything under the sun. Are you therefore as a seller, clubbing relevance with options available?

Is your value proposition centered around service? Is it around experience or around convenience – what aspects of convenience have you zeroed in on? Are those aspects based on any market research or insight or are they just invented as a whim?

Do you know who your customers are (those who purchase)? Are they the same as your consumers (those who use)? What about your communication audience (those you appeal to from a brand personality stand point)? What is the demographic/psycho graphic profile of the largest chunk of your footfall/visitors?

If you don’t know the profile of the base that matters to you most, how will you know what aspects of convenience/experience matter to them, leave alone plug the need gap. In fact have you evaluated if your current customer base is even the right one? Is that profile the right fit for the products/services that you’re selling or is it a default customer base and not the one you set out to attract/acquire? Alternatively if the default customer base is working well – have you plugged every need gap and catered to every opportunity for this cross-section of target audience?

So whom did you set out to attract? Is your externalized brand reflection in sync with that? What about your internal brand personality? Would you buy from yourself if someone offered whatever you were looking at, cheaper elsewhere? If not, then maybe there lies your answer, if yes, then there lies the gap.

So while some may ask you the question about why you? Are you as a seller clear about why them?

So if you’re selling the same thing everyone else is, are you really clear about whom you want to sell it to? If not, how will you ever have a proposition for them, whom you haven't identified?

 Sanchita Johri

(The views expressed by the author are solely those of the author in personal capacity)