True or false? customers buy benefits, not components or features. true false

The distinction between the terms benefits and features is an important concept in developing and marketing a product or service. Features are characteristics that your product or service does or has. For example, some ovens include features such as self-cleaning, smooth stovetops, warming bins, or convection capabilities.

Benefits are the reasons customers buy the product or service. For example, the benefits of some ovens to buyers include safety, ease of use, affordability, or—in the case of many ovens that feature stainless steel casings—prestige.

Just like products, services differ from one another in having distinctive features and benefits, though these differences may not always be so obvious to potential customers. One building contractor may use master painters while a second uses laborers to paint. Both will tell you they do painting, but one has master painters (a feature) and produces a better-looking paint job (a definite benefit).

Every product or service has a purpose. For example, the purpose of an oven is to bake raw food, but not all ovens have the same features and benefits.

The uniqueness of a product or service can set it apart from the competition. Features can communicate the capability of a product or service. But features are only valuable if customers see those particular features as valuable. You want products or services with features which customers perceive as valuable benefits. By highlighting benefits in marketing and sales efforts, you’ll increase your sales and profits.

It’s important to remember that customers buy products and services because they want to solve a problem or meet a need. Consciously or unconsciously, your customers will always be asking the question, “What’s in it for me?” Your product and service offerings have to deliver solutions and satisfy needs, or they won’t be successful.

Given that benefits are ultimately more important to your customers than features, it is imperative that you understand the benefits your products and services provide, emphasize these benefits in your sales efforts, and update your products and services when new or additional benefits are desired by your customers.

Think about how automotive manufacturers advertise. To sell minivans, they don’t emphasize the layout of the vehicle or its carrying capacity. They show images of happy families loading their kids, sports equipment, and toys into the vehicle. They emphasize the benefits above and beyond the features.

Here are some other examples emphasizing benefits beyond the features:

• A Web site shopping cart vendor who offers hosted solutions to medium-sized businesses can emphasize the convenience and time-savings of not having to maintain a Web site. It’s selling convenience, not software.
• A carpet company might be more successful if it illustrated how its carpets could help create attractively decorated interiors. Pictures of beautiful rooms could be more beneficial than a stack of carpet samples or a list of fabric features. It’s selling beauty, not carpets.
• A consulting company might focus its marketing efforts by highlighting its end product—improved performance and increased profits—not its consulting methods. It’s selling profitability, not consulting.
• A manufacturer of computer printers might emphasize less hassle or less wasted time rather than emphasizing reliability or quality. It’s selling ease-of-use, not printers, and not quality.
• A salmon fishery might emphasize the health benefits of eating salmon. It’s selling health, not fish.

When Do Features Matter the Most?

Features always matter because they provide your customers with hints about how well your product or service will deliver its benefits. Although benefits are generally more important than features, there are some times when features make all the difference:

It’s true that products and services will satisfy a customer’s need when they’re acquired, used, or consumed, but we argue that customers buy benefits, not products. Indeed, when a customer purchases a product or service to meet their needs, they’re really buying the benefits that are provided rather than the actual product.

When a customer has a headache, they are in-market to purchase pain relief, not Tylenol. This fact is critical when it comes to understanding your customer’s wants and needs.

Benefits are different between customers, depending on the specific needs each customer is looking to satisfy and the situation where the product or service will be used. Being that different customers want different types of benefits, they make different purchasing choices by associating importance to different product features when choosing brands within a certain category.

Think about someone you know who wanted to buy a car and they made their decision based on a subconscious need for social acceptance or self-esteem. In this case, the benefit is the feeling they receive from the product. They might feel this way when buying a Mercedes because it comes with a prestigious brand image. They might associate importance with engineering sophistication, European styling, or state-of-the-art features. Or maybe you know a friend who has to haul around 4 kids and needs a vehicle that is practical for a parental lifestyle. They’d likely go with a Minivan or full-size SUV because of the need for passenger capacity, safety ratings, and reliability.

Services also create benefits by reducing costs, offering simplification or convenience, and creating the ability to accomplish tasks faster and more effectively. This can be seen in business-to-business (B2B) service providers like a marketing agency or a payroll-processing company, as well as with consumer services such as mobile apps for banking, shopping, or even refilling your prescriptions.

The line between products and services blur together with technology companies pushing the boundaries of their marketing mix. Although they do sell products, Amazon.com thrives because they’re an industry-leading service provider that offers customers convenience through 2-day shipping, video and audio streaming, and more via . This is a perfect example of why customers buy benefits, not products.

Benefits and Price Determine Value

A customer’s estimation of the benefits and the capacity to satisfy specific wants or needs ultimately determines the value that is attached to a given product or service. When a customer compares different products/services and brands, they will select what they think will provide the most need-satisfying benefits. Therefore, value is the conscious and subconscious determination of the capabilities, features, and price of a product or service, and this means different things to different people.

It’s important to note, though, that a customer’s value estimation of a product or service is not always accurate. This could be as simple as getting a bad haircut. Or for instance, a warehouse manager in Texas decides to install an air-conditioning system on the premise that it’ll provide more comfort for employees during the summer, leading to happier employees (emotional benefit) and increased productivity (financial benefit). After the installation is complete, the manager may learn that the cost of operation is higher than expected, has a slow response time to changes in outdoor temperatures, and the blower isn’t strong enough to cool distant locations in the building.

This is why the perceived value and satisfaction the customer gains also depends on whether the product or service actually lives up to the expectations and delivers on the promised benefits. This is why the activities that occur after the purchase (i.e. delivery, installation, operating instruction, repair, follow-up, etc.) are critical for ensuring that customers stay satisfied. This also makes it essential for businesses to manage customer complaints effectively. On average, businesses don’t hear from 96% of customers who are dissatisfied with their product or service. Of those who do complain, 50% will do business again if their complaints were handled compared to 95% if the issue is resolved quickly. (1)

The Value of Long-Term Customer Relationships

In the past, organizations considered the individual transaction with a customer as the actualization of their marketing strategy. Over time, however, markets have become increasingly competitive, forcing businesses to shift their strategy toward building long-term relationships between the customer and business. Over the last 15 years, we’ve seen this become increasingly prevalent with the use of social media marketing as an effective tactic in any marketer’s toolbox.

Focusing on long-term customer relationships can be quantified using a customer’s lifetime value (LTV), which is the expected value of revenue that a customer will produce over time. For an auto manufacturer, the LTV of a first-time car buyer that stays satisfied and loyal to a specific brand, purchasing multiple vehicles over their lifetime could reach well over $1M.

It’s important to remember that although activities focusing on improving LTV may increase marketing expenses, the initiatives overtime pay off with improved market share and profitability. This is for one simple reason – the cost of obtaining a new customer is far bigger than the cost to keep an existing one. (2) Persuading a customer to leave a competitor can be costly, because it often requires a financial incentive (lower price or special promotional offer) or an extensive and compelling communications strategy (using advertising or sales force effort). In comparison, the increased loyalty that comes from focusing on long-term customer relationships has a lower upfront cost impact and generally yields higher profits.

(1) Patricia Sellers, “How to Handle Customers’ Gripes,” Fortune, October 24, 1988 p. 88

(2) Patricia Sellers, “Keeping the Customer You Already Have,” Fortune, Special Issue, Autumn-Winter, 1993 p. 57

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What is a feature and benefit?

The difference between features and benefits: A feature is a part of your product or service, while a benefit is the positive impact it has on your customer.

What are features and benefits in sales?

Features are aspects of your product, which could be technical or descriptive. Benefits are why that feature matters for your customers. In other words, how that feature makes their life better. Features tell customers what, and benefits tell customers why.

Is a benefit the value of a product feature to a customer?

Benefits are the direct result of a feature. They are things a customer can accomplish because of the features of your product. Your people determine what the benefits are whether they are sales people presenting to a potential client or marketing people creating some collateral.

Why is it better to sell benefits than features?

Selling benefits rather than features makes it a lot easier to charge higher prices. You are able to differentiate your product by creating a story that emphasises intangibles. This helps you justify a higher price than a generic product.