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Whatever you sell you only "sell benefits"

You should already be doing this. Forgetting about this is easy to do but it is also one of the cardinal sins for sales and marketing staff in any sector.

This is really lesson one in Marketing theory and there are some great ways to illustrate this point. You may think you are selling a product but your customers are buying a benefit.

Here is how it works.

You may think you are selling "hand-held or car-kitted, wap-enabled, satellite locating, route finding, pay as you go / come / want, super secure, multi-function mobile phones" but your customer is buying the benefit of communication.

Why is it important to understand this?
Well it defines how you think about your customers and competitors, and how you go about improving your offering and any USP (unique selling proposition) that you may try to build into it.

In the example above I mentioned mobile phones, these have taken off well in most westernised industrial countries and in many operators are selling as many as they can get.

What do they compete with? Well.. loads of other offerings in fact such as landline telephones, the fax, the post, email (well some phones are starting to build this in now and many have the option of sending text messages) but it remains to be seen if mobile phones as they are will solve all our the communication needs. They are no where near as easy to communicate with as using "your mouth and ears", see someone you want to speak to, get their attention and talk.... simple ... well with a mobile phone you are supposed to be able to communicate with people beyond shouting distance but at the moment it only works if you have their telephone number.

Substitution is a big word!

But in the marketing world it is an important one. When people are buying your goods and services because of the benefit they derive from them, anything else that they could substitute at better value for money, may put you out of business.

Does anyone remember telex machines?

Perhaps one of the casualties of technological substitution, not that many years ago no self respecting company would have been without a telex machine. Today they are history and probably some of the companies that made them are also.

What happened, well other techniques became available to provide the same or improved "benefit" and the Telex machine reached the end of its life-cycle as a viable product. If companies had been operating as "telex machine makers" they would also have died, if they were operating as "communications companies" they will still be here today, but no longer selling telex machines!

Example 1: the Car

You work in the sales and marketing department of a Car manufacturer or a distributor

What are you selling, Cars it is obvious dummy!

Well not so fast, your customers are using your products to solve their transport needs. Does the way you and or the industry make the offering mean it is easy to understand the benefits (relating to peoples requirement for transport remember) compared to trains, bicycles, underground trains (metro / tube), buses, motorcycles, walking.

Your offering solves our transport needs only as considered in relation to the cost of petrol, insurance, maintenance, repairs, driving licences, the ease of operation of your cars, the ability to carry more than the train or tube, the "point to point" ability of cars, the compatibility of your cars to car washes (yes a European carmaker once made a car whose windscreen broke in some car washes), bridges automatic parking garages (and some very expensive luxury cars will not fit into the automatic parking garages in some UK City centres!), the basic ability to park at the other end, comparison between the cost of buying or hiring only when you need it?

In fact considering the complexity of the transport market and the amount of government regulation and dependency (road provision etc) it is a wonder that car makers have done such a good job in selling new cars to provide for our transport needs.

In my humble opinion "the Car simply is public transport".
Now if only all the train and bus operators had also taken a decent, critical and in depth view of the transport benefits customers are actually buying, the western world might have viable alternatives to the car.

Example 2: The Drill Manufacturer

This part is unashamedly based on an explanation by Kotler a well known marketing writer who makes this excellent example one of his books.

Consider a company selling drills and drill bits. What are they selling?

Who cares!

What the customer is buying is a hole. That is why they buy the drill and a drill bit, to make a hole.

So if anyone else finds a better or more cost effective or easier way to make a hole, the business of making and supplying drills and drill bits will be affected.

Now how do you define what your company does again?

[Author mark@sticky-marketing.net date 20/02/01]