Defining Your Brand
Now that you’ve gotten some feedback from potential customers on your business idea using the market research techniques you learned in the last lesson, you’re ready to really start thinking about the specifics of your product or service.
This lesson will help you think about the features and benefits of your product or service and your unique selling point. The combination of these three items will help you understand if your business really has what it takes!
It’s important to remember that your product or service is your money-maker!
You can be a great salesperson or have a beautiful website; but, if your product or service isn’t unique or what the customers want, it’s likely that you won’t be making money long enough to keep your business alive.
Features vs Benefits
Customers tend to make purchases based on what a product or service promises to provide them.
Whether the product promise is help you save money (appliances), provide an in-theater experience in your living room (hi-def televisions) or make you appear younger (beauty products), people make their buying decisions based on the product or service benefits first, not the features.
Successful entrepreneurs understand the basic rule of selling: sell on benefits that customers will gain from using the product rather than the list of features that it has.
Right now, you might be thinking to yourself “What’s the difference between features and benefits?” The difference might be small, but you’ll want to think about them as separate concepts.
The features are the physical characteristics of your product or how it works. Benefits are what the customer gets from using your product or having your service.
While it is sometimes difficult to distinguish between the two, consider this: customers will hopefully benefit from your product’s/service’s features.
The difference between features and benefits is more easily displayed with examples.
ACCESS TO WORKSHOPS, FIELD TRIPS, SOCIAL EVENTS
INCREASED EARNING POTENTIAL, PROFESSIONAL DEVELOPMENT, FRIENDSHIPS
HIGH-QUALITY CAMERA, WIRELESS HEADPHONES, SHATTERPROOF SCREEN
CONNECTIVITY, MOBILITY, IMMEDIATE ACCESS TO INFORMATION
LED DISPLAY, FAST CHARGING, 128GB STORAGE SPACE, FINGERPRINT READER
ENABLES PEOPLE TO WORK ON THE GO, LESS EXPENSIVE THAN A NEW LAPTOP
Your features and benefits are not always only specific to the actual product or service. You should also consider after-sale services, like delivery, warranty, technical support and refund policies. These benefits could serve as additional selling points!
When defining your features and benefits, don’t forget the results of your market research! Your decisions should be based on what your customers want and need, and on what will give you a competitive advantage. If you come up with a new feature or a benefit for your product or service, be sure to do the proper market research before you moving forward! This includes using the Internet to research the features and benefits offered by companies that sell a product or service which is similar to your business idea.
Your features and benefits are probably going to be related, but that doesn’t mean the customer cares about them equally! Whether you’re saying your high-definition television will give you an at-home in-theater experience or your beauty products will make customers look younger, people are likely to make decisions to buy based on the benefits, not the features.
Continue to Refine Your Product or Service
Now that you’ve decided on your features and benefits, you’ll want to find out how your customers respond to them. You may have found out how they felt about some of your features or benefits in general, but now you can be more specific with your questions to figure out how they specifically feel about your product or service. Remember, you learned how to do this earlier in the chapter (it’s called market research!).
With the results, you can refine your ideas further to closer meet the customers’ needs.
You don’t want to be stuck in the research phase forever, though. You can spend all day doing research and doing surveys and interviews, but you won’t know what customers truly think until you’re actually out there!
Exercise: Define Your Features & Benefits
Identifying Your Target Market
The next key piece to the success of your business is identifying your potential customers. If you can’t get people to buy your product or service, you won’t be bringing in any money to your business. Your target market is the group of people to which you are going to market your product or service. You’ll want to be very strategic about picking your target market to make sure you’re getting to the right people.
A mismatch between the people you are targeting and the people willing to buy your product or service can lead to wasted effort and missed opportunities to make money. For example, if your business provides lawn mowing services, it may not be the best idea to focus all of your promotional efforts on middle school students. Why? Because students are probably not looking for someone to mow their lawn.
How do you fix this problem? Target their parents instead! They’re more likely to be the ones willing to pay you for your service.
When defining your target market, you’ll need to use online search engines to build a demographic profile as part of your business plan. A demographic profile will tell you who your target customers are and will usually answer the following questions:
Age: How old are your target customers?
Gender: What gender do your target customers mostly identify with?
Location: Geographically, where are your target customers located?
Income: How much money do your target customers make every year?
Occupation: What kinds of jobs do your target customers have?
Education: What level of education do your target customers have?
Race & Ethnicity: What is the racial and ethnic breakdown of your target customers?
Other: Are your target customers married or single? Do your target customers have children? Do your target customers have pets?
Examples of other questions to ask, which may help you get the above answers include:
Are they single or married?
Do they have children?
Do they have pets?
Do they go to your school?
In some cases, you may have more than one target market. This might be especially true if you’re trying to sell your product or service to people your age or younger because they may need to convince their parents to pay for it or give them money to pay for it, so it might be smarter for you to target their parents instead. If this is the case, you’ll want to build a demographic profile for your most important target market. The profiles for the other markets, while important, are not as necessary.
Exercise: Define Your Target Market
Identifying Your Competitors
Underestimating your competitors, or businesses that have similar products or services, can cause your business to fail. No matter how great you think your business is, if your competitor has a better product or is able to attract more customers, your business will struggle. So it’s important to know who your competitors are, what they do well (and not so well) and what makes you different from them. Gaining a competitive advantage over your competitors is the key to business success and even survival.
To help you figure out who your competitors are, ask yourself these questions:
What companies have similar products/services as me?
Will these companies be a competitor for every aspect of my business or only for a certain product, customer, location, etc.?
Your competitors aren’t just the businesses who have the same products or services as you! Use Netflix as an example. Its direct competitors might include products such as HBO GO, Hulu or Amazon Video. Its indirect competitors, though, could include movie theaters because, even though they don’t sell the exact same product, they sell a similar experience and compete for the many of the same customers.
Exercise: Understand Competitors
Exercise: Identify Your Competitors
Exercise: Conduct Competitive Analysis
MARKET RESEARCH WRAP-UP
Congratulations! You’ve conducted your first extensive market research! Now that you’ve gathered and provided all of the requested information, review the results of your hard work. The summary of this information will describe the business environment in which your business will exist and must succeed. Understanding this environment, which includes industry statistics, current products, customer demands, and competitors, should help you define and refine your business goals and better understand your business in comparison to your competitors.
This knowledge should help you strategically craft and develop your branding identity and marketing plan, which will be explored in more depth later in the curriculum.
Unique Selling Point
Your unique selling point (USP) is exactly what it sounds like: What makes you unique in the market. Your USP is a feature or benefit that’s meaningful to the customer and sets you apart from the businesses that are doing the same thing as you.
Here are a few examples of USP’s you might recognize:
M&M’s: The milk chocolate melts in your mouth, not in your hand.
Domino’s Pizza: Fresh, hot pizza delivered in 30 minutes or less, or it’s free!
FedEx Corporation: When it absolutely, positively has to be there overnight.
AVIS: We try harder.
Without a clear USP, customers might have a hard time deciding why your product or service is better than your competitor’s. To help you figure out what your USP is, ask yourself:
What do customers want?
What does my business do best?
What do my competitors do best?
Now that you’ve completed the Competitive Analysis exercise, you should have a better idea of how to answer these questions.
The trick here is to actually be unique and to actually benefit the customers, so be as honest with yourself as you can. Your product or service can truly have unique features or benefits; but, if the customer gets nothing from it, they might not care!
If your answer to question #2 doesn’t address the needs or wants you defined in question #1, then you may not be meeting the needs of your target customers! You might want to take some time to refine your product or service to be closer to what your customers want, or you may consider targeting different customers whose preferences are compatible with your benefits. You should rely heavily on the results of good market research when making such changes.
If your answers to questions #2 and #3 are the same, then you either aren’t unique enough or you just haven’t figured out what makes you unique yet. It’s likely that your competitors already meet customers’ needs or do something better than you, so it’s important for you to think hard and seriously consider your USP!
Think back to the example USP’s mentioned earlier. They’re short and memorable, and yours should be, too. Try to keep it to one quick sentence. This can take a long time and be frustrating, but don’t get discouraged! If you have a hard time figuring this out, so will your customers!