Why People Buy | Toms Shoes And Zappos

08 August 2010 Entrepreneurship Thoughts

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A while back, I posted a video about Why People Buya TED talk in which the speaker presented that people don’t buy what you do but why you do it. I came across two stories today and wanted to share with everyone which supports that. We don’t buy Apple products because they’re functional (they are actually), or that they’re technologically advanced (actually, there are phones that are functionally more advanced than the iPhone4), but we do it because it connects with us. The brand that Apple stands for connects with a certain emotion with each of us consumers and that’s why we buy. That was one example we can all relate to. It was actually the example used in the TED talk. If you haven’t seen it yet, I highly recommend it.

Story Of Toms Shoes

The first story comes from Inc magazine. It’s about Toms Shoes. The story behind it is that for every shoe brought, Toms Shoes gives away one pair to a child without shoes. Practically speaking, it does not make sense because if you could pay for a pair of Toms Shoes, you’re actually buying two. Wouldn’t a normal consumer spend that amount of money somewhere else, say a Nike, Rockport, Kenneth Cole, or even Ralph Laren (from what I read, he will be designing a line of shoes for Toms). But remember, people are much more willing to buy WHY you do something, instead of what you do. Tom’s Shoes is a perfect example. The history of how it started is a great story by the way. It’s a wonderful picture of how business and giving can come together. Check out the videos.

There are some really good lessons. One is to incorporate some type of giving in your startup. People love giving.

Zappos Wins On Culture

The other example is Zappos, the company that sells shoes which was recently brought out by Amazon for 1+ billion. They definitely did not compete on price. However, they have the best customer service, at least that’s what I heard. I never brought shoes from them. I tried. I looked up shoes there and compared it with prices on EastBay which has always been known to have the best prices for sneakers. And yes, EastBay won and that’s where I brought from. Zappos competes on culture and customer service. Zappos does such a great job with taking care of their customers, whenever they called, that they wanted to buy from them because they liked them. It’s like this. Let’s say you had two people offering to sell you pens. Both dealers are selling the exact pen. One is the clear winner by price. You don’t know that person though. Once you buy the pen, you will likely never see them again unless you wanted to buy another one. The other however, is a friend of yours. He or she has even offered to draw you a random picture of something. If you asked me, I rather buy from my friend for two reasons- 1) because I just want to support that person and 2) hey I’m getting something cool in return. That was the model Zappos used. There was a story of how a customer received flowers from the company after a death of a family member.

“When I came home this last time, I had an email from Zappos asking about the shoes, since they hadn’t received them. I was just back and not ready to deal with that, so I replied that my mom had died but that I’d send the shoes as soon as I could. They emailed back that they had arranged with UPS to pick up the shoes, so I wouldn’t have to take the time to do it myself. I was so touched. That’s going against corporate policy.

Yesterday, when I came home from town, a florist delivery man was just leaving. It was a beautiful arrangement in a basket with white lilies and roses and carnations. Big and lush and fragrant. I opened the card, and it was from Zappos. I burst into tears. I’m a sucker for kindness, and if that isn’t one of the nicest things I’ve ever had happen to me, I don’t know what is.”

The next time she wants to buy a pair of shoes, who do you think she’ll go with? One who’s practically a friend or some random stranger. People don’t buy what you do buy why you do it.

So the next time you’re thinking of starting a business, start with the question why. It helps to develop an emotional connection with your customers, build brand loyalty and eventually will lead to a sale.

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Chief Community Officer at TeenBusinessForum. I believe that successful and ethical entrepreneurs make the world a better place. To make that a reality, I help empower teen entrepreneurs that will be the next generation of business leaders.


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