A few weeks ago I was pitched for investment by two companies. Both had ideas that would measure industrial companies’ release of environmental contaminants into the air and water. One company said their product was necessary because we need to save the environment for future generations. The other said it was needed because industrial companies get fined if they release too many contaminants into the environment.
I passed on the first company. Discussions with the second company have advanced to talking investment terms.
Why did I pick Company two over Company one? Contrary to the opinion of some of my students, friends, colleagues and readers, I’m not a heartless soul. I’d like the environment preserved for my kids’ generation just as much as the next guy. But I also know how most industrial companies work. They don’t buy “vitamins,” they buy “pain killers.”
Vitamins or Painkillers?
The “sell-pain-killers-no-vitamins” phrase is an investor colloquialism for what motivates people to buy. Just like people are much more likely to take an aspirin for a headache than a vitamin to improve their health, customers are much more likely to buy something that solves a painful problem than something that’s a nice improvement.
Think about the analogy. You have to get rid of that awful throbbing in your head to get back to your normal routine. But you can go about your daily routine without ever taking a vitamin. Your health might not even be affected by your choice. Your love of meditation or your willingness to exercise might offset the ill effects of not taking vitamins. And besides, you aren’t going to know for a long time whether that vitamin helped.
The same is true for companies buying products. Customers are quick to buy products that solve their problems — the kind of awful throbbing pain that disrupts their routines. They tend not to buy things that are “nice-to-have.” Would-be customers can delay purchases of “nice-to-haves” to another day, or allocate their spending to other things. They can’t and won’t delay purchases of things that get rid of a true pain point.
Investors know this. They won’t invest in your business unless they believe you can attract customers. And it will be a whole lot easier to close sales if your product or service gets rid of a customer pain.
Whether you are selling a way to improve business sales, run an office more smoothly, shuttle kids to their after-school activities, order cleaning supplies, sell cat food over the Internet, find competent graphic designers or any of the myriad of things that entrepreneurs are trying to do, find the customer’s headache and sell them an aspirin. Let your competitors sell the vitamins.
Pills Photo via Shutterstock