In our experience, it is very easy to overlook important nuances in the relationships between features, benefits and value drivers. These relationships can either be one-to-one, one-to-many, or many-to-one. Take the example below. The product in question is a pick-up truck promising superior gas mileage versus others in its class.
The differential feature (fuel efficiency) is obvious enough: on one gallon of gas, this truck will move forward 35 miles. Next, let’s hypothesize some reasons why customers should care about this.
We see that the first benefit, “spend less money on gas” is also quite obvious. It leads directly to a very straight-forward value driver quantification: # of additional miles per gallon X cost per gallon X number of miles driven per year. It’s safe to say that this benefit/value driver would be relevant to virtually any potential customer. One might be tempted to conclude the exercise right here. But let’s push a little deeper and consider two additional, less tangible benefits from the perspective of specific customer segments.
Take, for example, a sales representative who uses the truck to haul product samples across a wide territory, driving hundreds of miles each week to visit prospects. For this type of customer, one compelling benefit is reducing the number of gas station trips. Searching for gas stations out of town is often inconvenient for a sales rep with busy schedules of customer appointments.
Reducing just a few gas station trips per month can result in significantly more customer face time over the course of the year. To a sales rep, additional face time means additional sales commissions (a revenue value driver). Although quantifying the value for these potential commissions might seem more speculative than estimating fuel savings, even a rough ballpark figure provides a compelling reason for this customer to consider our truck. Especially given the fact that the sales rep gets reimbursed for fuel expenditures anyway, and so wouldn’t be as motivated by the fuel savings benefit.
The third benefit, “lowers my carbon footprint” is perhaps the most intangible. Few can argue with the fact that this has a psychological appeal for customers seeking greener alternatives in their lives. Yet attempting to quantify this economically might seem a stretch, unless we consider this from the perspective of another customer segment. Take for example, a “green” delivery service that differentiates itself as having a 100% hybrid fleet. In this situation, intangible psychological appeal translates into greater market share (a powerful revenue value driver) that outweighs the simple fuel savings. Marketers can then attempt to estimate the incremental revenue from this potential market share gain.
Understanding, and quantifying, intangible value is a critically important strategic task for managers. Intangible value is usually a huge contributor to your offer’s overall value, especially for larger market-leading companies. A solid link that ties features and benefits to value drivers enables B2B enterprises to differentiate their products from competitive offerings.
To access the white paper Unravelling the Mystery of Intangible Value by Ed Arnold, click here.
About Ed Arnold
Ed Arnold is VP, Products at LeveragePoint. Previously, he held senior positions at Communispace, Diamond Management & Technology Consultants, and OmniTech Consulting Group. He directs product design and development and drives the go-to-market strategy for LeveragePoint. Mr. Arnold holds an MBA in Marketing from New York University and MA and BA degrees in Political Science from Boston University.