The following is adapted from Demand-Side Sales 101.

In your economics class, you probably heard different definitions of supply and demand that centered on fluctuating prices, and the relationship between the two depended on each other. Supply goes up, the price decreases. Demand goes up, the price increases.

But when it comes to buying and selling products and services, supply and demand are two completely different perspectives. Buying is very different from selling. Selling is clearly a supply-side perspective — you have a product and need to get rid of it by selling it to people — while buying sits on the demand-side. People need a product or service to make progress in their lives, and they search for it until they find it.

Let’s go a little deeper into these concepts so we can fully understand what a salesperson is supposed to be saying, and asking, when interacting with a customer. And we’ll find out why demand-side selling is a better strategy.

Supply Side vs. Demand Side

The supply-side perspective focuses on the product or service and its features and benefits. Your sales and marketing strategy centers on finding ways to sell the product and figuring out to whom you’re going to sell it.

Customers are usually a demographic — not a real person but an ideal group to buy your product, and you search everywhere for that demographic, hoping that they will see your product, get excited, and buy it. You change and add features based on whether you think customers will respond better to it.

However, with supply-side, you never look at how the product will fit in people’s lives and how they will make their lives better. You see only your product and how you can make as much money as possible. As a result, the pressure is on the sales group to push the product and turn a profit. Customers are fish in the water waiting to take the bait.

On the other hand, the demand-side perspective tries to understand how people buy things. You design your product and your sales and marketing strategy around trying to meet the buyer’s needs and looking at the situation through their eyes. We as salespeople are simply filling a demand issue because there’s a gap in what people need and what people are selling. Filling that gap is the roadmap to success.

It’s not an “If you build it, they will come” model. Most people don’t think about your product or service if it doesn’t address a problem they have. When people have a problem that needs solving, they search for a solution, which creates demand.

Once you understand this concept and develop your product or service to fill that solution, you can help people buy and make progress in their lives.

Case Study: Casper Fills a Need

Take, for instance, the mattress company Casper. Instead of thinking about their product’s features and benefits and asking, “What’s the demand for mattresses?” Casper asked, “How many people struggle to sleep at night?” They looked at how people experienced insomnia at night, tossing and turning and feeling uncomfortable on their traditional mattresses.

Their ads featured soft bunnies and kittens crawling across their mattresses, tugging at the sheets. “We asked these creatures of comfort what it’s like to sleep on a Casper,” the narrator says. “Some things just don’t need words.” The ad closes with the animals sleeping like angels. What’s not in the ad? Anything about the features and benefits of a Casper.

Casper looked at the relationship between businesses and customers from the customers’ viewpoint (demand-side selling). It understood why people buy mattresses and recognized the anxieties that got in the way. Their product features — better design, simple options, and buying from and delivering to the home — was the icing on the cake.

And it’s working. Casper now has 3.2 percent of the U.S. market share for mattresses — ranking seventh. They’ve sold to over one million customers, with $400 million in sales. The company is valued at $1 billion.

It’s Not All Economic Theory

Supply- vs. demand-side selling is really a simple concept. It’s not about inventory or about price fluctuations or learning graphs. It’s all a matter of how you listen to a customer and then try to fit a product or service to to meet their needs.

Demand-side selling puts salespeople on a personal, more detailed level and gives them a better chance of making the sell. Perhaps if we had all gone to the Harvard Business School, we could have heard Professor Theodore Levitt. say,, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole!”

That’s listening to a real problem, not selling a product. And that’s the way it should be.

For more advice on supply- and demand-selling, you can find Demand-Side Sales 101 on Amazon.

Bob Moesta is a teacher, builder, entrepreneur, and co-founder at The Re-Wired Group, a design firm in Detroit, Michigan. Bob has developed & launched over 3,500 products and sold everything from design services, software, and houses to consumer electronics, and investment services. He’s an adjunct lecturer at Kellogg School at Northwestern University, lectures on innovation at Harvard and MIT, and enjoys mentoring at incubators. Greg Engle is a co-founder at the Re-Wired Group. Since the beginning of his career, helping people make progress has been part of Greg’s DNA. He’s worked in everything from food services and retailing, to construction, software, and now consulting services. Greg’s a native Detroiter and enjoys volunteering in the community, especially in local ice hockey leagues.

Why Buying is Different from Selling was originally published in Demand Side Sales on Medium, where people are continuing the conversation by highlighting and responding to this story.

The following is adapted from Demand-Side Sales 101.

People have become confused about the roles that sales and marketing play in a business. Some think sales is in charge of cash flow, and some believe that marketing is in charge. Some even lump sales and marketing together, thinking they’re the same thing, and have the two departments as part of the same team. So who’s right?

It’s a difficult question because both help produce sales, and they both interact with the customer. But there’s no doubt that salespeople are the ones who close the deal.

Marketing is a high-level job that reaches a larger audience than sales, which tends to deal with a one-on-one relationship with the customer. But they are a team, and they must work closely together to make sure the transition from potential buyer to buyer is seamless — and complete.

Marketing — Sales at a High Level

Marketing is like advertising in that it helps the sales team sell the product or service. Marketers tend to focus on features so they can attract the widest audience. They work at a very high level, creating personas, or imaginary customers, based on demographics such as age, ZIP code, and income level. Sometimes they may conduct interviews with real people, but they tend to turn those interviews into two or three personas that represent what they heard in the interviews — and ultimately, they represent the entire market for the product.

Then it’s execution time. They then use marketing strategies to capture customers’ attention and get them interested in the product. Marketing is not just about brochures anymore. It now encompasses many different forms of media, including websites, email campaigns, social media, and online advertising. It casts a wide net, but there’s little personalization to it.

Sales — Real People, Real Situations

Sales, on the other hand, is more complicated. It’s more detailed, and salespeople deal with real customers, sometimes face-to-face. Because of this, they have to know the actual person and their likes, dislikes, desires, and fears. They ask questions. They listen. The more information they know, the better they understand the customer and the easier it will be to help them find a product or service that meets the customer’s needs.

Salespeople are usually the highest paid people in a company. They should know marketing as well as sales, but they must know how to connect with people and show how the product or service meets their needs. They also ensure product delivery and manage the cash flow side of the business. Many times in a small company, the CEO is a salesperson because they know more about the company than anyone.

It’s Not All About Differences

Despite their differences, the two disciplines do overlap at times. While marketing tends to focus on the product, its strategies can appeal to a customer’s emotions and thinking. Salespeople do the same thing when trying to close the deal. All customers want is to solve the problems in their lives and make progress. Marketing and sales are locked in step with this idea.

Sometimes it’s the job of marketing to create interest, or brand awareness. For example, a marketing campaign might center on a new car and the features it has. It may appeal to a customer’s sense of social status, and they might look up the car on Google or even travel to a dealership to test drive a car. It’s then up to the salesperson to make the sale, talking to them about their needs and desires, and fitting them with the car that fits those needs.

People Convince Themselves to Buy

When I entered the world of sales and marketing at a countertop company, it was challenging, The focus was always on the product’s features and benefits, and the customer was a set of demographics: age, ZIP code, and income.

But no one was asking real customers why they were buying. Their age and income have nothing to do with what’s really going on in their lives. That’s how customer interviews became so important to sales: to find out the smaller picture about what was affecting consumer behavior.

I soon found out that we as salespeople and marketers don’t convince people to buy anything. They convince themselves. After I discovered that, sales became much easier. It was my job to help them come to a decision and help them with the problem they were trying to solve.

That’s really what a company does. Marketers just talk to customers at a high level, and salespeople talk to them at the ground level. It’s up to the customer what decision they make.

For more advice on the difference between sales and marketing, you can find Demand-Side Sales 101 on Amazon.

Bob Moesta is a teacher, builder, entrepreneur, and co-founder at The Re-Wired Group, a design firm in Detroit, Michigan. Bob has developed & launched over 3,500 products and sold everything from design services, software, and houses to consumer electronics, and investment services. He’s an adjunct lecturer at Kellogg School at Northwestern University, lectures on innovation at Harvard and MIT, and enjoys mentoring at incubators. Greg Engle is a co-founder at the Re-Wired Group. Since the beginning of his career, helping people make progress has been part of Greg’s DNA. He’s worked in everything from food services and retailing, to construction, software, and now consulting services. Greg’s a native Detroiter and enjoys volunteering in the community, especially in local ice hockey leagues.

What’s the Difference Between Sales and Marketing? was originally published in Demand Side Sales on Medium, where people are continuing the conversation by highlighting and responding to this story.

The following is adapted from Demand-Side Sales 101.

Salespeople are used to asking yes and no questions:

“Do you like this product?”

“Can you see yourself with this?”

“Do you want to buy my product?”

In a way, it’s all about the business, and the mantra from Field of Dreams — “If you build it, he will come” — applies. It’s up to the product team to build a product full of features, and it’s up to the marketing and sales teams to sell that product and push the numbers up. But there’s one question companies don’t usually ask customers when selling or when developing their offering.

That question is, “Why?”

It may seem like a fuzzy question, sounding more like psychology than business. But here’s the issue: businesses always want to add new features and benefits in the belief that it will push them ahead of the competition. If their battery offers a 3% longer charge, we have to do 5%.

Businesses get so focused on the little things that they don’t really get what people are trying to do. People have real problems in their lives, both large and small, and they need to overcome those problems. To succeed, you need to get to the root of the progress that people are trying to make by asking: “Why?” But there’s a specific way to do it right — let’s dive into it.

The Five Whys

When I say you need to ask why, I’m talking about a specific strategy called the Five Whys, which is a long-tested method of getting the right answers from a person.

I learned the technique when I was eighteen years old and interning at Ford in Japan. It was developed in the 1970s by Sakichi Toyoda, founder of Toyota, and is still used today.

Here’s how it works: When a problem — any problem — occurs, you should take a step back and ask “why?” up to five times to find the source of the problem you’re trying to solve. Each answer gives you more and more detail and gets you closer to the root of the problem.

Let’s observe the following Q&A with a customer to see how it works:

• Customer: “I need a drill because I need to make a hole.”
• You: “Why do you need to make a hole?”
• Customer: “I need a hole because I want a plug.”
• You: “Why do you want a plug?”
• Customer: “I need a plug because I want a lamp.”
• You: “Why do you want a lamp?”
• Customer: “Because it’s hard to see, and I want to be able to read better.”

Technically that was only three whys, but it was enough to arrive at the root of the problem. The customer doesn’t really need a drill. He needs an iPad or a Kindle to read in low light.

Asking ‘Why’ Points You in the Right Direction

Here’s the problem: most companies, when asked for a drill, will sell a drill. They never get to the Kindle because they don’t ask why enough times. They sit in boardrooms thinking of their product’s features and benefits and don’t see how it fits in their customers’ lives.

You can’t design your product into a customer’s life and the progress they are trying to make. You have to understand their definition of progress and design your product or service around it. People don’t buy products; they “hire” them every time they use it to solve a problem or issue that they’re having. If the product doesn’t live up to their expectations, the customer will fire it and search for something else.

This is called demand-side sales, as opposed to supply-side sales. With supply-side sales, businesses focus on the product or service and its features and benefits. Demand-side sales, on the other hand, starts with taking a hard look at how your products and services fit into people’s lives and the outcomes they are seeking.

Supply-side and demand-side are totally separate from each other, but you need them both to make a business work, and both approaches start with understanding demand. When you talk to customers, seek to understand them at a very deep level. You do this by asking customers detailed questions; when the answers aren’t detailed enough, you pull out the Five Whys.

The Five Whys may seem awkward, but they’re time-tested for getting real, substantive answers out of people. Use it often, and you’ll start selling drills and Kindles.

For more advice on asking why to achieve better sales, you can find Demand-Side Sales 101 on Amazon. https://amzn.to/32sjAMI

Bob Moesta is a teacher, builder, entrepreneur, and co-founder at The Re-Wired Group, a design firm in Detroit, Michigan. Bob has developed & launched over 3,500 products and sold everything from design services, software, and houses to consumer electronics and investment services. He’s an adjunct lecturer at Kellogg School at Northwestern University, lectures on innovation at Harvard and MIT, and enjoys mentoring at incubators. Greg Engle is a co-founder at the Re-Wired Group. Since the beginning of his career, helping people make progress has been part of Greg’s DNA. He’s worked in everything from food services and retailing, to construction, software, and now consulting services. Greg’s a native Detroiter and enjoys volunteering in the community, especially in local ice hockey leagues.

Better Sales Start with Asking ‘Why?’ was originally published in Demand Side Sales on Medium, where people are continuing the conversation by highlighting and responding to this story.

(Royalty-free image: https://unsplash.com/photos/OnoQLphax3Q, Credit: Unsplash / Szabo Viktor)

The following is adapted from Demand-Side Sales 101.

You’re in a store looking around, and something catches your attention. Do you buy it or not? You’re lured by displays from businesses focusing on their product, with flashy advertising touting its features. You see the product and bam! You realize you want that product right then, and, on an impulse, you buy it.

This happens, but not often. More often, a buyer goes through several steps before making a decision. Sometimes it’s right there in the store and takes a matter of minutes, but sometimes with a major purchase, such as a car, it may take several weeks to go through the process. There’s always a timeline.

The buyer must also be at the right time and place in their life to buy that product. If a person sees a display of umbrellas and it’s hot and sunny outside, they aren’t likely to buy one. But if it’s pouring down rain, something will trigger a need in their minds.

What is that process? Through the years, we’ve uncovered the six stages a buyer must go through before making a purchase. These stages all occur whether someone is deciding on a coffee maker or a car, and salespeople can help them along at each stage to ease the anxieties and frustrations, improving the odds that someone will buy their product or service.

#1: First Thought

This is when the idea to buy something first gets planted in a customer’s head, and it’s an important step. If they’re not thinking about buying a new mattress, they’ll never buy a new one.

Something has to happen — a creak in the box springs, a hole in the mattress — for them to realize that there’s a need there. Without that first thought, there is no demand.

#2: Passive Looking

Passive looking is just what it sounds like — nothing serious. The customer is just window shopping. They notice the mattress store when they pass it now. They’re starting to fill their mind with information about the product or service. This isn’t comparison shopping or looking at features yet. It’s noticing that the product is there and letting it brew in their head.

Passive looking is about learning. Customers do a little research — noticing ads in the paper, talking to close friends about their intent. They’re not expending any effort, time, or money to make a decision.

#3: Active Looking

Active looking is what we think of when people go shopping or do research on a product. They’re actually spending time deciding whether to buy it. For our mattress buyer, it’s when they Google “best mattress” or actually go into a store to look at what’s available. For our impulse buyers, it may be looking at the product beside it and comparing the two, or looking at the features on the packaging and comparing it to their actual needs.

With active looking, people start to invest time, effort, and thought into their decision and see what is the right solution to their particular problem. What’s right for one person may not be right for another. Different people notice different features and attributes that may move them to the next step in the process. Active looking is about comparing and eliminating products that don’t help them move forward. Consumers are still learning about the process.

#4; Deciding

Here’s the big point in time: making the decision. The mattress shopper has thought about buying a mattress and the reasons they need a new one compared features and prices and eliminated the competition.

Sometimes the decision is difficult, and they must make tradeoffs. Mattress A may have better features — a pillow top, more springs — but it may cost more. People need to reject something before they can buy something else.

It’s a difficult process. The perfect product or service rarely shows itself without some kind of limitations. Deciding is where people realize they can’t have it all. That’s where the tradeoffs occur. Whatever is most important in the consumer’s mind — price, features, customer service — is what is going to sway their decision-making.

#5: Onboarding

Onboarding is the big moment. It’s where the consumer determines if you’ve met the expectations set when they decided to lock in and hand over their cash or credit card.

There’s no turning back now (unless you can return the product). This is always a crucial time because the consumer is going to be using the product for the first time and is measuring it against their expectations to see if they’re satisfied. If they’re unhappy, they may exchange it or return it, and may never do business with you again.

#6: Ongoing Use

Onboarding is just the beginning of the relationship between you and a product or service. After you buy it, you’ll be using it regularly to solve the problem you originally had. The new mattress shouldn’t creak, and there should be no defects after several months of use.

In ongoing use, the consumer is “hiring” the product every time they use it, and customer satisfaction relies on whether the product is doing the job. Are they pleased each time they use it, or are they still struggling with their problem? If they aren’t pleased, they may return it under warranty and start the process all over again. Ongoing use is where the jobs get done, and progress is achieved.

It’s All About the Steps

Businesses should think hard about each step of the buying process because it affects everything from product development to marketing and customer service. If the consumer is impressed with your product or service, you’ll make the sale and continue making sales throughout your relationship. And you won’t have to spend money on the flashy retail store displays to get their attention, either.

For more advice on the six stages of making a purchase, you can find Demand-Side Sales 101 on Amazon.

Bob Moesta is a teacher, builder, entrepreneur, and co-founder at The Re-Wired Group, a design firm in Detroit, Michigan. Bob has developed & launched over 3,500 products and sold everything from design services, software, and houses to consumer electronics and investment services. He’s an adjunct lecturer at Kellogg School at Northwestern University, lectures on innovation at Harvard and MIT, and enjoys mentoring at incubators. Greg Engle is a co-founder at the Re-Wired Group. Since the beginning of his career, helping people make progress has been part of Greg’s DNA. He’s worked in everything from food services and retailing, to construction, software, and now consulting services. Greg’s a native Detroiter and enjoys volunteering in the community, especially in local ice hockey leagues.

The 6 Stages of Making a Purchase was originally published in Demand Side Sales on Medium, where people are continuing the conversation by highlighting and responding to this story.

(Royalty-free image: https://unsplash.com/photos/WEDDt-u3q3o, Credit: Unsplash / Berkeley Communications)

The following is adapted from Demand-Side Sales 101.

For many businesses, it’s all about the sale.

That all-important deal that salespeople make can be critical, and businesses spend a lot of time, effort, and money on their sales divisions hoping that more sales will impact the bottom line. But at some of those same companies, customer service departments barely exist, and as a result, customers come in and out of their business like a revolving door.

There’s a link missing between sales and customer support, and most businesses don’t even realize it. But the job of both teams is the same: to listen to the customer and find a solution that fits their needs and helps them make progress in their life.

If you don’t recognize this and take the customer for granted, you could lose them, and that lost revenue is challenging to get on the books.

Servicing Cars Is As Important as Selling Cars

Let’s look at a car dealership as an example. Mary has bought a new car from a salesperson who listened to what she was looking for in a car, asked many questions, and then helped to put her behind the wheel of a vehicle she loves.

But when she goes to get it serviced, the customer service team is rude and treats her like a number. It takes hours to get her car serviced, and when she has a problem, the team spends hundreds of dollars on a solution that doesn’t fix the problem. Fed up with the bad attitudes and poor service, she goes elsewhere for her service. When a salesperson from the dealership contacts her a few years later asking if she’d like to trade up, she flatly says no.

Mary’s confidence in the entire dealership eroded because the customer service team didn’t treat her as well as the sales team did. Sadly, this happens quite often. We’ve all experienced terrible customer service. If the service department had treated her as well as the sales department did, they’d still have a customer. They both need to establish a relationship with the customer in order to secure new business.

Getting New Business is Difficult

Most companies think new business is more challenging to get than renewals. So they put their lower-level, inexperienced people on renewals and customer service. But a study by Marketing Metrics showed the success rate of selling to an existing customer is around sixty-five percent. Compare this with the success rate of selling to a new customer — only about twelve percent. Good customer service equals a better rate of renewals and repeat business.

Both sales and customer service teams should be treated equally within an organization because both do essentially the same thing: They act as coaches, mentors, and advisors for their customers and help them achieve their goals.

The problem of “What kind of car should I get?” or “I hear a rattle in my car.” are very different issues with different outcomes, but the two teams should help the customer similarly by building and maintaining a close relationship.

Given that their responsibilities are so alike, is there a way for sales and customer service to work together? Of course, there is.

The Handoff is Key

First, salespeople need to focus on helping the customer and solving their problems. All customers have needs and desires to be fulfilled. Salespeople work closely with them, finding out what those needs are and helping them along the buying process to make sure the product or service is right for them. They then hand it to customer service, who should learn as much about the customer as the salesperson did.

This handoff is crucial to keeping the customer for a long time. Sales must supply customer service with as much information as possible, but that’s not enough. Customer support needs to dig for information on their own and keep a relationship with the customer.

Face to Face Matters

Relationship managers should meet with the customer regularly and find out what the future holds for the customer. What do they have planned? Is there anything the business can do to help them with projects or new problems they might be facing?

Customer service reps or relationship managers should be ready with ways to help. For example, if you’re with a bank, and the customer is looking to start their own business, you may suggest a new loan to help them get on their feet. Stay engaged with them and know what their next moves are.

Honesty, Really Is the Best Policy

Both teams need to listen and be honest. Salespeople who close deals usually earn customers’ trust, but if customer service does a lousy job responding to questions or following up with the customer, the trust erodes. This “trust decay” can be lethal to a business.

You can’t ask customers point-blank if they trust you. Dig deeper, and ask specific questions about the product and whether it’s meeting their needs. If the customer asks a question, always answer it honestly. If the answer is no, say it. Don’t string them along.

Completing the Circle

The process also works the other way. Customer service can help sales by telling them about problems the customer is still having. It will help salespeople understand the problems the product or service may have, and they can be better prepared to handle questions and issues that the customer has even before they buy the product. That could result in more sales.

Remember, the most vulnerable people in your portfolio are your current customers because your business has probably ignored them up to this point. Treat them with respect, and assume you’re trying to gain their business every day.

For more advice on sales and customer support, you can find Demand-Side Sales 101 on Amazon.

Bob Moesta is a teacher, builder, entrepreneur, and co-founder at The Re-Wired Group, a design firm in Detroit, Michigan. Bob has developed & launched over 3,500 products and sold everything from design services, software, and houses to consumer electronics, and investment services. He’s an adjunct lecturer at Kellogg School at Northwestern University, lectures on innovation at Harvard and MIT, and enjoys mentoring at incubators. Greg Engle is a co-founder at the Re-Wired Group. Since the beginning of his career, helping people make progress has been part of Greg’s DNA. He’s worked in everything from food services and retailing, to construction, software, and now consulting services. Greg’s a native Detroiter and enjoys volunteering in the community, especially in local ice hockey leagues.

The Link Between Sales and Customer Support was originally published in Demand Side Sales on Medium, where people are continuing the conversation by highlighting and responding to this story.