From the December 2000 issue of Startups

There isn't a business owner in the world who hasn't wrestled with the features vs. benefits dilemma tossed at them by well-intentioned marketing gurus. The funny thing is, as critical as the concept may be, I've found that not one in 10 businesses really understands the difference. And that's one of the main reasons most small-business marketing efforts don't work!

Most SOHO owners decide what business to start based on two factors: 1) what they're good at and like to do, and 2) what they assume possible customers will buy. Often those latter assumptions are correct, but small-business marketers also assume that prospects will understand why they should buy the product or service just because they've been told about it. Thus, business owners only communicate the features of their product or service to prospective customers and neglect to mention the benefits.

What Are Features?

Take a look at the list of features below, taken directly from current advertising and marketing materials.

Self-setting clock

50-number speed dial

One-click financial reports

Custom programs

Open 24 hours

Batteries included

Each is a feature-a factual statement about the product or service being promoted. But features aren't what entice customers to buy. That's where benefits come in. A benefit answers the question "What's in it for me?," meaning the feature provides the customer with something of value to them. So-and this is where most businesses go wrong-that must mean:

The benefit of a self-setting clock is convenience.

The benefit of 50-number speed dial is fewer keystrokes.

The benefits of one-click financial reports are immediate information and prepared statements for your accountant.

The benefit of custom programs is that they're designed just for you.

The benefit of a store open 24 hours is you can buy when you want.

The benefit of batteries included is the product is ready to use out of the box.

While these may seem like true benefits, they're really just elaborations on the features. So what is truly a benefit?

Benefits Are Results

The best way to understand the true benefit of your product or service-or to answer the "What's in it for me?" question-is to focus instead on results. A customer's perception of each feature's results is what attracts him or her to a particular product or service. When someone chooses a VCR with a self-setting clock, the assumption is that the benefit is convenience, but the actual results are that they don't have to read the instructions, watch a blinking 12:00, and, most important, feel stupid. Those results are the true benefits.

When you try to sell the features of your product or service, you're making the customer do all the work to figure out why they want the feature. It's in a seller's best interest to draw the connection for them. But to do that, you have to know the results yourself. Let's take another look at that features list to see the possible benefits from the customer's point of view:

Self-setting clock: I won't feel dumb!

50-number speed dial: I can keep in touch with my best customers without effort, and I won't get frustrated misdialing.

One-click financial reports: I can see exactly where my business is financially at any time. I can spend more time with my family instead of trying to figure out whether I'm making enough money or not. I can see business what-ifs instantly.

Custom programs: It will accomplish exactly what I need, and I won't have to worry paying for services I don't want.

Open 24 hours: When my pregnant wife craves pickles and ice cream at 4 a.m., I won't have to disappoint her.

Batteries included: I'll never have to see the crushed look on my child's face when his toy won't work because I forgot to buy batteries.

By this time, you should be mentally going over every sales pitch or marketing message you've been using with great trepidation and rightly so. If you look carefully and honestly, you'll most likely find that your benefits are really just more features.

Applying This Knowledge To Your Business

So now that you understand the difference between features and benefits, how do you apply this to your own business so you can start marketing your benefits? The three-step solution is one you probably already know. As a matter of fact, you'll probably slap your forehead and groan.

1. Know your customer. To know your customer, you must gather as much information as humanly possible on each market segment. You have to gather demographic data (age, sex, household income, family size, number of credit cards, media preferences and so on) and psychographic data (value system, primary hot button, behavioral style, response mechanisms, fears, passions and so on).

You can get much of the demographic data from studying your present customers. (If you haven't had any customers yet, this emphasizes the importance of selecting a narrow target market to explore.) You can probably guess their age and health from their appearance, their family and marital situation from their conversations, their economic level from the way they dress and their behavior, and so on.

Psychographic data is a little more difficult. Small businesses rarely have the resources to collect or purchase comprehensive data of this sort, but you can gather some from observation and extrapolate more. For example, finding out what kind of car a person drives and what kind they wish they had will tell you much about what they value. If they drive a station wagon and long for a red convertible, then you could presume that they fantasize about freedom and lack of responsibility. If you know they prefer classical and jazz to pop or country, they may consider themselves apart from the crowd or they have a broad background. These aren't surefire assumptions, but when you put together a number of such facts, it's possible to derive a reasonably accurate picture of what motivates an individual.

2. Change your point-of-view. Whenever you function from your own point of view, you automatically fill in the blanks with assumptions. Unfortunately, prospects can't do that. No matter what type of business you have, you're bound to think it's great because you fully understand what you're offering. But a prospect knows little or nothing about your offerings. That's why they can't make the same connections about it that you can.

Your demographic and psychographic information will allow you to discover what patterns exist among your customers. Using that information, you must learn to put yourself in their shoes as the buyer. Approach your own product or service as if you'd never seen it. Then ask yourself-and anyone else who will answer-"What results will that feature bring me?" and "Why would I want to consider buying or switching change?

3. Think in terms of results. There's nothing wrong with the term "benefits," but if you refocus the problem to think in terms of "results," the situation becomes clearer. Your dilemma isn't features vs. benefits, but rather features vs. results. Start with your current features, and then take each one into the results phase. When you ask yourself "What results to I get from the speed dial feature?" the answer isn't "I only have to push one or two buttons," but rather "I don't have to scramble for my Rolodex or Palm, look up a number, punch it in, and risk misdialing." Then, just to be sure, take the results one more step: "And I don't have to waste time on these tasks while I'm trying to meet a deadline!" Try out what you get on a few current customers to see which ones spark their interest.

When you use this "results" approach to discovering your business' benefits, you can be sure the marketing messages you use to reach your prospects will be right on target. And that's the surest way to get business!


Laura Clampitt Douglas, CEO of MAX International Converters Inc. and president of Small Business Marketing Analysis, has been providing valuable advice to small and homebased businesses for more than 15 years. She is co-author of the bestselling book Getting Business to Come to Youand gives speeches and seminars on marketing at conferences nationwide.