Marketing Basics: People Pay for Benefits
Despite the fact that car companies talk about the 3.4 liter horizontally opposed 6-cylinder aluminum engine with a compression ratio of 12. 5: 1, that is not why people buy a Porsche 911.
They spend the $81,500 it takes to buy a base model because of the way the car makes them feel when they drive it and when they talk about owning it. While not every product has the same emotional appeal of a Porsche, every product fulfills a need. And it is the needs people buy, not the features you combine to create the result.
A common marketing mistake business owners make is focusing too much attention on the features of a product. We see this when we work with engineers who want to promote high tech products. They think including long descriptions of the technical specifications of the product in the advertising and marketing material will help them close the sale. We spend a lot of time helping them understand there may be a select segment of the population who will care about the specs, the vast majority of customers want to know what those features provide.
So if you want to make the sale, focus on how your customer will profit or gain from using your products or services. What does your product do and how does it make them feel? Why do they buy?
- To save: time, money, resources or effort
- To increase: profit, the value of investments, future business opportunities or personal relationships
- To reduce: taxes, expenses, risk or problems
- To improve: confidence, productivity, skills, knowledge, appearance or peace of mind
And people will pay for the benefits.
What is the value or your product or service? It has little or nothing to do with the cost of producing your product. The value of your product or service is based on how well you provide the benefits listed above. If you can put a value on the benefit it is easier to put a price on the price for goods or services. When you understand why they buy, you have the core of a message to power your marketing strategy.
You may not be selling a Porsche, but if you know why your customer wants to buy, you can drive away with a sale.
For more on this topic, check out the Entrepreneur’s Notebook by Lorraine Ball