Customer benefits are the key to understanding how competition effects companies. When a company segments the market by means other than how its products or services benefit its customers, it is unable to truly understand the competitive marketplace.

In this article, we introduce benefits and why they should matter to your company. We end with a quick example of how competitors move into your industry.

Let's begin with why you need to define your market in terms of benefits. 

What Is a Market?

There is a tendency for people in marketing is to focus on a product or service they can see—and therefore to think of that product or service as "the market."

When viewed that way, however, the market exists at a narrow category or industry level. That, in turn, leads marketers to immediately focus on some vague notion of a "target market" and then go directly to personas, audience types, SIC codes, verticals, and so on, without ever stopping to think about what a market really is.

In addition, once marketers focus on products and services, they then focus on features, attributes, and characteristics.

It's perfectly natural to think that customers buy products and so they think about those products' features and characteristics.

People do think about those things, but is that why they buy something?

As the noted management and marketing legend Theodore Levitt has said, "People don't want to buy a quarter-inch drill. They want a quarter-inch hole!"

In other words, people ultimately want the benefits of a product or service.

I know you've heard of his quote, and probably thought it was cute. But Levitt was serious: He saw entire industries collapse because they didn't focus on benefits. (I'll discuss a recent example a bit later.)

If you're not sure whether Levitt is right, look around the room you are in and find something you own and like and ask yourself, "Why did I buy that?" Sure, it might have some appealing feature, but why did you want that feature?

By repeatedly asking yourself "why," and answering it, you will understand Theodore Levitt's central message.

Why Benefits

By focusing on benefits, marketers focus their attention on what customers are really buying.

In fact, you can think of a market as simply "a group of customers who want or need the benefits they derive from products/services that provide those benefits."

When marketers focus instead on features, attributes, characteristics, they focus their attention inward, toward the company and its products—and away from customers.

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Customer Benefits: A Brief Introduction to Why Customers Buy Your Products

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ABOUT THE AUTHOR

image of Allen Weiss

Allen Weiss is MarketingProfs founder and CEO, positioning consultant, and emeritus professor of marketing. Over the years he has worked with companies such as Texas Instruments, Informix, Vanafi, and EMI Music Distribution to help them position their products defensively in a competitive environment. He is also the founder of Insight4Peace and the former director of Mindful USC.