Describe the products and services your business will sell.View the Example: Products and Services
Assess Your Product or Service
Here are a number of questions to help assess a product and service:
Is it simple? Complexity repels customers. Even if something is complex, it must be presented to the customer in a simple form.
Is it a building block? Larger complex projects or products should be broken down into smaller building blocks.
Is it scalable? Can the project or product be mass-produced or delivered to large numbers of clients efficiently?
Is it profitable? Is the product or service profitable at lower and higher levels of production?
Can it be sold effectively through the Internet? Is the product digital or can distribution channels be arranged to efficiently provide to customers?
Is it free from glue? Is the product or service mired in government regulations, politics, or bureaucratic processes?
Is it a one-person purchase? Whenever a buying decision must go through one or more committees, the sales process is more cumbersome and therefore more expensive.
Is it within your timelines? Can you produce and provide the product or service to customers at critical times?
Is it controllable? There are many threats to project or product control. Understanding these threats entails industry savvy and market research. Examples of threats are existing or new government regulations, supplier power or changes, natural disasters, and Industry trends.
Can you afford it?
This information can be obtained only through a detailed financial plan.
Selling the Benefits
As a business owner, one of the greatest skills you can cultivate is to be able to understand how your customer thinks in order to see what he or she needs and wants. This skill will enable you to identify the benefits to your customers.
Sell the benefits, or to use a popular phrase, “Sell the sizzle, not the steak.” This works for a number of different business and personal situations, the most obvious being the selling of your products or services. Selling the benefits also works for negotiating, be it for writing employee contracts, serving customers, writing proposals, creating business plans, making arrangements with family, or mapping out your own life goals.
It is important to understand the difference between features and benefits. Features are about the product or service, whereas benefits are about what the product or service will do for the customer.
Turning Problems into Features and Benefits
Businesses solve problems for customers. The nature of the problem determines the features and therefore the benefits, to customers. For example, most of my work involves my computer. I travel a lot and need ready access to my computer files. I also need to be able to work while away from my office. The problem was that my old PC was not easily transportable. Other people had this problem as well. Along came the laptop computer, solving the problem for me and many other customers. My laptop computer is lightweight and easy to carry wherever I go, making it possible for me to have my office and personal information with me wherever I am. The features are translated to benefits.
How do you turn features into benefits? The key is to listen to your customers first, to ensure that you are solving real problems and meeting real needs. Once you clearly understand your customer’s needs, you can then design the features and communicate the benefits.
The manufacturer or service provider defines and creates features to serve what the customers want as benefits. The manufacturer did its homework before, during, and after making my laptop.
Here is what you are faced with at the beginning of the business process. You need to somehow get into the customer’s head and determine what the benefits are so you can ensure that your product or service meets the customer needs. How? Simply talk to your prospective customers. Describe what you wish to create for them; describe your product according to features. Ask your customers what they need and listen to their answers.
What’s the Fuss About Competitive Advantage?
Your competitive advantage is something that sets you apart from the competition and hopefully compels customers to buy from you. Here are some examples:
The following table shows an example of the Macrolink products and services, features, benefits, and the competitive advantage.
Action
The narrative from this step will be part of the “Business Concept” section of your final business plan. In your working copy of the Shell™ Business Plan template, enter the following information under section 2.2 “Products and Services.”
- List your products and services in the Products and Services Element (in the Shell™ under the heading Business Concept, Section 2.2 Products and Services) of your business plan.
- Download the Competitive Advantage Worksheet and develop a list of the main features, benefits and competitive advantage for each product and for each service.
- If you think it appropriate, copy the list of features and benefits into your business plan (in the Shell™ under the heading Business Concept, Section 2.2 Products and Services).