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Sinek investigated why some managers and companies are extremely successful and built a model based on this. This model has 3 levels: what you do (what, the outer ring), how you do it (how, the middle one) and why you do it (why, the core).
Most companies start with the 'what', some take the 'how' along, but the 'why' is often completely forgotten. We therefore act without properly understanding the underlying motives and motivation (of the company and the customer). According to Sinek, the result is a grey, uninspired and indiscriminate middle class.
Extraordinary achievements come from first focusing on the 'why': a powerful mission and vision from which the 'how' and 'what' naturally follow.
Understanding the “why” is the key to success.
Why do customers buy?
Let's apply the Golden Circle to the e-commerce landscape in 2022.
E-commerce is often about shoving boxes. More boxes. And faster. Amazon pioneered this “quantity first” e-commerce model 25 years ago and it is still the blueprint followed by (almost) every webshop: as many products as possible at the lowest possible price.
That's what there will be sold.
But why is there purchased?
Let's say you have a webshop selling padel rackets. Or office chairs. Or lounge sets. At the end of the day, week or month, you know what products were sold.
386 of racket A were sold at €149, -
104 of racket B were sold at €169, -
Because of the price? The brand? The number of reviews? The position on the category page? Because of the weight of the racket? The color? The shape? The playing properties? Google search volume? The ad spend?
As a webshop, of course, you have your own “why”. your raison d'être. Most likely, that's not offering most products (in a category) at the lowest price. It's more likely that you want to make money by helping your customers. Get the ultimate night's sleep. To an unforgettable camping vacation like you used to have with your own parents. Or because you want to make padel a top-5 ball sport in the Netherlands.
Your customers also have a “why”. And that, at first, has nothing to do with your products. Your customer is looking for a solution for back pain after sleeping, or is looking for a tent for a family in a warm area where they move regularly, or is looking for a padel racket for an advanced player in the offensive position where their strengths (strength and spin) are used optimally to impress their friends.
However, most web shops have no idea why their customers buy the products they buy. They know what they sell. The how a wide range of products at an attractive price is often delivered quickly. But the why is omitted.
And that is a huge missed opportunity. Because a focus on what and how only works for the biggest players. And the meanest. As a result, the other 99.99% of the web shops end up in a gray mass where it is difficult to distinguish themselves.
Win with why
By understanding the needs - the “why” - of your customers, you are building an e-commerce organization that breaks with the current, unhealthy e-commerce dynamic (lowest price, most products). You change the rules and play to win.
But how do you start asking, understanding and applying the why in your webshop? Start with these articles about guided selling:
Helping customers much better — customers aren't interested in your products with insignificant specifications, they want the solution for their problem.
Much better to understand customers — you understand why customers buy, not just what you sell.
The result? More sales and less customer service burden, because customers are better served if you put their “why” at the center of your webshop. More distinctive character and a right to exist because you actually create value in addition to offering the right products. And cutting costs because you understand your customers better, so you can purchase and develop products better and conduct your marketing more efficiently.