You just finished totaling up your expenses from 2022.

You broke it down into categories so you could see exactly how you spent your money.

To your surprise, you spent almost $2,000 on… lattes? 😅

Realistically, you know that you should be brewing coffee at home.

But as you glance over at your crappy coffeemaker sitting on the kitchen counter, you know that it pales in comparison to those specialty coffees you love.

You don’t want to sacrifice taste or convenience, but you also don’t want to keep bleeding your bank account dry on $10 daily lattes.

You decide to invest in a new gadget that promises coffeeshop quality lattes at home.

Which brand of coffeemaker immediately comes to mind?

In today’s special edition of Why We Buy, we’re analyzing a well-known company to see how they use buyer psychology principles in their business.

So treat yourself to a coffee break because this week we’re diving into Nespresso.

Let’s get into it.
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🤑 A Look Inside Nespresso

Coffee pods aren’t special anymore.

They’re expected. We’re not surprised to see a Keurig in our hotel room. We’re used to seeing stacks of pods while we wait in line at Starbucks.

But have you ever wondered where the idea for coffee pods came from?

​A Nestlé engineer named Eric Favre asked himself a question that will go down in coffee brewing history.

What if it was easy to make the perfect espresso?

Ten years later in 1985, Nespresso (and its idea for coffee “capsules”) came to market. At first, it flopped. Nespresso targeted business offices who, unsurprisingly in hindsight, didn’t care about improving the quality of their coffee if it meant paying more.

Nespresso gained traction when they repositioned the product as a luxury coffeemaker for the home.

In 2021, Nespresso had net sales of over $100 million. They sell 14 billion coffee capsules per year.

Nespressos leveraged many psychological principles to fuel their growth.​
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🧠 How Nespresso Uses Buyer Psychology

Don’t buy into the hype—inventing a new product category is really freaking hard.

Getting buy-in from consumers can take time. Yet Nespresso introduced coffee capsules to the market and forced its competition to follow suit.

Here’s how Nespresso created a new category of product, got it to take off, and has continued to stay relevant for decades.​
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​The Framing Effect​

Nespresso sticks to its positioning as a luxury brand. This means they can’t say they’re the cheapest espresso maker or coffee capsule on the market. That defeats their entire brand ethos.

Instead, they understand their buyers and speak to their specific pain points. In today’s work-from-home world, people can’t just grab a coffee on the way to the office. Their home is their office.

Nespresso cleverly frames their product as even faster than instant coffee (one of their arch-enemies).

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But before working from home became the norm, Nespresso framed itself as less expensive than buying a coffee at Starbucks instead of as the cheapest option for at-home brewing.

They clearly know how to meet buyers where they are and pivot their message when needed.

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​The Halo Effect​

The perfect spokesperson for a luxury espresso machine like Nespresso are people deemed sophisticated and classy, like actors Penelope Cruz, George Clooney, and Jean Dujardin.

Nespresso partnered with well-known celebrities to heighten the perception of their brand.

Even though people logically know that George Clooney is getting paid to endorse Nespresso, they still unconsciously attribute Clooney’s good taste and sophistication with the coffeemaker.

This is the Halo Effect in action.

The IKEA Effect
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Strange as it may seem, buyers love to make their products. They’ll even pay more for them when they’re in charge of assembly.

Nespresso is the IKEA of coffee. And they lean into it. Their website highlights how relaxing it is to make your own coffee at home.

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​Foot-In-The-Door Technique​

It may surprise you to learn that Nespresso doesn’t actually make money when you buy their coffee machine—they barely break even.

They sell their espresso machines at cost because they know that once you’ve purchased their coffeemaker… you’ll keep buying capsules.

Razor blade makers often do the same thing.

By getting a foot-in-the-door with a low-cost offer, Nespresso knows they’ll earn additional when customers buy capsules for years to come.

​🤔 Thinking About Your ​Business

Nespresso created a product that forced the entire coffee industry to up their game.

They positioned themselves as “the new cool kid in town” and they’ve maintained that position for decades.

Here’s how you can get yourself a mug of the cool kid’s brew. Ask yourself…

Q: How can you reframe your product so buyers better understand your value?

Think long and hard about who to target and what alternate solutions you compete with in your customers’ eyes. As Nespresso learned, when you change the frame you change the game.

Q: Which influencers align perfectly with your brand?

Working with influencers, celebrities, and even just “regular” people can help buyers see who your brand is for. There’s a big difference between a brand working with Snooki from Jersey Shore and George Clooney. Use strategically aligned spokespeople that emulate your brand.

Q: How can you get a foot-in-the-door with buyers?

Sometimes offering a low profit product—or even a no profit product—can help you get the right people to test your brand. You can afford to lose money on one product if you have a plan to make it back on other purchases.
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💥 The Short of It

Nespresso changed the coffee industry just by asking a simple question:

What if it was easy to make the perfect espresso?

Asking the right question in your business, and then backing it with proven buyer psychology, can create monumental and long-term growth.

​Until next time, happy selling.