Benefits produce internal and/or external value to customers. The focus of these benefits plays a major role in how much value customers place on them. Additionally, whether benefits are internal or external determines what departments and positions you contact first.
Internal benefits produce value only for the purchasers of your products. They appeal more to departments with low customer contact such as accounting, purchasing, engineering, or manufacturing. Often, these departments are more concerned about Column 1 issues than Column 2 issues.
Example
You sell paint wholesale to painting contractors. One of the features of your paint is two-hour drying time. Painters can apply a second coat sooner, thereby reducing the time it takes to complete a job. They receive the internal benefits of reduced labor costs.
External benefits occur only when you sell to businesses, not consumers. They produce value for your customers' customers. External benefits appeal more to departments with high customer contact such as customer service, marketing, and sales. Often, these departments are more concerned about Column 2 issues than Column 1 issues.
Example
Painters use the quicker drying time of your paint to give homeowners faster completion dates. The quicker drying time produces an external benefit—faster completion dates—to the painters' customers: the homeowners.
As the name subtly implies, both your customers and their customers receive benefits. This combination produces the most value because everyone benefits (including you).
Example
The painting contractors pass along some of their cost savings to homeowners as lower prices. Everyone wins because painters increase their competitiveness and profitability, homeowners receive better prices and quicker completion dates, and you sell more paint.
The last column on the right in the table in Exhibit 2-4 demonstrates this concept for the cellular phone and the bottle of barbecue sauce.
Cellular Phone Features (Adjective-Noun) | Benefits (Verb-Noun or Adverb-noun) | Value Type (Measurable or Perceived) | Focus: Internal, External, or Both |
---|---|---|---|
Digital Signal | Improves reception | Perceived value | Both: you can reach customers more easily and for longer periods (I) Customers can reach you more easily and for longer periods (E) |
Increases battery life | Measurable value | Both: same as above | |
Extends talk time between recharges | Measurable value | Both: same as above | |
Hands-Free Operation | Increases safety | Perceived value | Internal (external to other drivers) |
Sauce Features (Adjective-Noun) | Benefits (Verb-Noun or Adverb-Noun) | Value Type | Focus |
---|---|---|---|
Hickory Flavor | Improves taste | Perceived Value | Internal |
Eliminates the costs of wood chips | Measurable Value | Internal | |
Eliminates the time and expense of grilling | Measurable Value | Internal | |
Fat-Free Ingredients | Reduces the intake of fat grams | Measurable Value | Internal |