Demand-Side Sales

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Two Perspectives on the World: Supply and Demand

there are two dominant perspectives that drive the language and process for a business: the supply-side and demand-side.

What’s so special about their approach? It’s a worldview of selling from the customer’s vantage point, which we call demand-side selling.

Supply-side: The focus is on the product or service and its features and benefits. How will I sell it? Who needs my product? You define demand through the product. In this scenario, the consumer is usually nebulous—an imagined, personified version of the customer—an aggregated set of demographic and psychographic information. You aggregate and triangulate the consumer around the product through correlative data. When operating under this model you canvas the world for people who need your product, adding features and benefits along the way, to reach the widest audience. With supply-side thinking the focus is on the profit—the product must make money inside a specific cost structure. Everything you talk about goes through the lens of the product or service. You push your product. The supply-side does not see how the product fits into people’s lives. It’s the fishbowl analogy: you cannot see the whole picture swimming on the inside, only what surrounds you.

Demand-side: The focus is on understanding the buyer and the user. How do people buy and how do they make progress? What’s causing them to make a purchase? You design your go-to-market strategy around the buyer’s worldview, not the product. You are looking at the world through a real buyer’s eyes. It’s understanding value from the customer-side of the world, as opposed to the product-side of the world. Demand-side selling is understanding what progress people want to make, and what they are willing to pay to make that progress. Our product or services are merely part of their solution. You create pull for your product because you are focused on helping the customer. Demand-side selling starts with the struggling moment. It’s the theory that people buy when they have a struggling moment and think, “Maybe, I can do better.”

Traditional economics thinks supply and demand are connected. But we would say that demand is independent of supply. Demand is about a fundamental struggle. Supply and demand are two completely different perspectives in sales.

Most people don’t think about your product or service if it doesn’t address a problem they have.

When something’s not working the struggling moment occurs. It forces people to stop and ask themselves a question. It’s those questions that spur demand. When you study how people buy, you realize if there’s no struggle, there’s no demand—without demand people don’t buy. Once you see sales through this lens, you can help people buy and make progress in their lives.

Understanding the consumer at a very deep and empathetic level adds more value to the sales approach than focusing only on your product and its features and benefits. Because once you understand the customer, you see patterns and can now define the go-to-market approach based on causation, not correlation. What causes your customers to buy, not how many people are available because of their demographics?

It starts with listening to your customer and truly understanding their needs. It’s not only what they say, but how they say it, what they don’t say, and what they eliminate.

identify struggling moments and then reframe products or services from the customer’s vantage point—

Demand-side sales always starts with understanding the people who already bought and made progress with your product or service and then seeing the patterns to help others who have not made the progress yet.

The struggling moment is the seed for all new sales. By understanding this, you don't have to convince anybody to buy anything. The prospects convince themselves—demand-side selling. If you talk the way the customer thinks, selling becomes easy. You create pull for your product. How do you do this? By listening, understanding, and figuring out the contexts and outcomes that drive people to buy.

If you take the time to listen and truly understand, you will quickly realize it’s not about your product’s features and benefits; it’s about the customer’s struggling moment and the outcome they seek.

Understanding the context by which people value your product will make it easier for you to understand how to sell your product. Only your customer can determine your value!

The Frameworks for Demand-Side Selling

Sometimes people start with a struggling circumstance but have no idea what the other side looks like. Say your parents complain about their house being too big, they hate shoveling snow, and the taxes are too high. It’s not a real struggling moment until they figure out what they want to do about it. What progress do they want to make? Typically, this is where people will complain but not do anything about it. The best thing to do here is to take them to a condo and show them what progress looks like.

Value is relative to your circumstance and determined by where you start compared to where you end. Circumstance is a big part of understanding causation. Their circumstance is a reference point for their progress, without understanding their starting place you cannot design their progress.

Great sales begins with understanding the JTBD by your customer and the progress they are trying to make: What is the situation they are in? What’s the outcome they seek? What are the tradeoffs they are willing to make?

We do this by interviewing people who’ve purchased your product or services and understanding why. And why is relative to what’s going on in their life that caused them to say, “Today’s the day…”

To build a meaningful understanding of why people buy, we must create language, a story, and a model of their struggling moment.

We are going to introduce three key frameworks for how people buy: 
The three sources of energy or motivation (functional, emotional, and social) 
The four forces of progress (push, pull, anxiety, and habit forces) 
The JTBD timeline (sequence of events and actions to make progress)

The Three Sources of Energy—Types of Motivations for Progress

Functional Motivation. How cumbersome is the purchasing process for the buyer—time, effort, and speed? I think of mechanical things here: speed, effort, steps, etc. Remember the online students at SNHU? They were working full-time jobs and trying to go to school at night. They had little time to take the ACT/SAT and fill out a laborious application with an essay. They had no idea how to obtain a transcript. Wrapped up in the decision to go back to school were these functional barriers that stood in the way. We needed to reduce this functional barrier. It was a force pushing them away from our services.

Emotional Motivation. What positive or negative internal thoughts are driving my purchase—fears, frustrations, and desires? The online students were not focused on the university’s ranking. Remember it was the vision of a better life that drove them to suffer through the lost nights and weekends. They wanted to provide a better life for their family. So, our advertisement painted that picture. It showed the struggling moment that people face working a dead-end job. It showed the hard work and the better life ahead. The advertisement focused on the emotional satisfaction they would feel providing for their families.

Social Motivation. How do other people perceive, respect, trust, or acknowledge me? The online students wanted that feeling of pride the diploma would create. They envisioned just how proud their family and friends would be. And, as a result, how proud they would feel about themselves. Our advertisement painted that picture as well.

Overall, the goal in demand-side sales is to reduce the negative functional, emotional, and social motivations, which are causing anxiety and serving as a barrier. While at the same time, amplifying the positive motivations to create pull for the product or service.

The Four Forces of Progress

The push of the situation.
The magnetism of the new solution.
The anxiety of the new solution.
The habit of the present.

Any time we talk to consumers about a purchase or switch that they made, we’re constantly probing for the forces of progress.

The push of the situation and the magnetism of the new solution need to be stronger than their anxieties and habits before they will buy.

As product developers we think about the first two forces—the push and the magnetism of our product—a lot. We imagine the next big feature we’re going to bolt onto our product, which everyone will love. But we ignore everything else—the anxieties and the pull of habit. Our experience has taught us that the money is made on the anxiety side of the equation. If you can figure out what’s holding people back, you can shortcut the sales process and really increase profits. We’ve seen it time and time again.

People only make progress when force one and force two are bigger than force three and force four.

(F1 + F2) > (F3 + F4)

F1 = problem pushing us to change 
F2 = trust new solution will work  
F3 = distrust of new solution
F4 = Routine of current solution, situation

the six stages a buyer must walk through before making a purchase: 
First Thought—creating the space in the brain 
Passive Looking—learning framing, and prioritizing to know what to do next
Active Looking—seeing the possibilities, framing trade-offs, and ruling both in and out  
Deciding—making the trade-offs and establishing value, connecting the dots into alternatives for progress, getting buy in from the group. Setting expectations to measure progress
Onboarding—the act of doing the JTBD, meeting expectations and delivering satisfaction and value 
Ongoing Use—building the habit

We need to understand causality. What are the events which pushed and pulled them to move forward or backward? It is an important concept. The customer has a certain set of systems for how they buy, and our process needs to feed their world to help them make progress.

Four ways to create a first thought 
Ask a good question…and not give an answer 
Tell a story 
Give a new metric 
State the obvious

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Demand-Side Sales

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