Customers and Investors Don't Want Products. They Want Solutions. Product features are great, but you really need to sell buyers on how your product or service will benefit their lives.
This is part 8 / 8 of Write Your Business Plan: Section 3: Selling Your Product and Team series.
To convert buyers and investors, sharing product knowledge is important, but you need more. Sure, you have to know the products and services you sell in detail. But product knowledge alone is useless, and that is where many marketing plans run afoul of the first law of marketing: Put the Customer First. Customers don't buy products or services. They buy solutions to problems, relief from an itch, satisfaction of a felt need. In short, they buy benefits.
Benefits Are Not Features
Features are characteristics of products or services that are independent of the buyer's perceptions. A tractor lawn mower may have a 3 hp gas motor, be green with a natty yellow design, have a warranty good for two years, and cost $1,695, payable in twelve easy monthly installments. Those are all features.
The benefits to the buyer include confidence (3 hp is plenty powerful for a suburban lawn and will carry its owner in comfort up and down gentle slopes), prestige (John Deere knows how to make its buyers feel good), and convenience and economy (price and terms). Benefits perceived will differ from one customer to the next—another buyer might buy the same lawn mower because his son-in-law is the dealer, or because his neighbor says it's a great machine, or just because it caught his eye.
The key point is that benefits are dependent on the perceptions of the market, whereas features are dependent on the product or service.
The perceptions of the market are determined only by research. Armchair research does not count. If you know your market and study your demographics, you will know what your customers perceive to be of value. Then and only then can you safely match your products or services to their demands. You get to know what your markets want by asking them, by knowing them, by researching their buying behaviors. Some of this is almost subliminal—but what sets the big winners apart is that they take the extra time to do this research.
Cover Your Behind
To a typical consumer who's purchased her share of shoddy products from uncooperative manufacturers, it's encouraging to hear about a multimillion-dollar settlement of a consumer's claim against some manufacturer. It provides proof that the high and mighty can be humbled and that some poor schmuck can be struck by lightning and receive a big fat check.
To manufacturers and distributors of products, however, the picture looks entirely different. Liability lawsuits have changed the landscape of a number of industries, from toy manufacturers to children's furniture retailers. If you visit public swimming pools these days, for instance, you don't see the diving boards that used to grace the deep ends of almost all such recreational facilities. The reason is that fear of lawsuits from injured divers, along with the allied increase in liability insurance premiums, have made these boards no longer financially feasible.
If you're going to come out with a diving board or offer diving board maintenance services, you need to be prepared for this legal issue. Dealing with it may be as simple as merely including a statement to the effect that you foresee no significant liability issues arising from your sale of this product or service. If there is a liability issue, real or apparent, acknowledge it and describe how you will deal with it in your plan. For instance, you may want to take note of the fact that, like all marketers of children's bedroom furniture, you attach warning labels and disclaimers to all your products and also carry a liability insurance policy. In fact, warning labels may seem ridiculous, but in a litigation-crazed society, you will actually see labels such as the one on a portable stroller that read, "Please remove child before folding." Really? Funny as it may sound, let it be known that you will take all necessary steps to protect your business, your products, and yourself from litigation.
You must have an attorney's advice on almost anything you plan to market. A layman's opinion on whether a product is more or less likely to generate lawsuits is not worth including in a plan.
On the subject of liability, here is a good place to deal with the question of whether you are already being sued for a product's perceived failings and, if so, how you plan to deal with it. If you can't find an answer, you may wind up like private aircraft manufacturers, many of which were forced out of the business by increases in lawsuits following crashes.
It's often difficult to get an attorney to commit himself on paper about the prospects for winning or losing a lawsuit. Many times, plans handle this with a sentence saying something along the lines of, "Our legal counsel advises us the plaintiff's claims are without merit."