Develop products on needs and benefits
Then, wants and features will drop out. Don’t confuse the two. A need can be identified because it is always associated with a benefit the customer receives when it is fulfilled. In the case of marketing to business, this benefit must come in the form of solving a problem and it is best when it makes the customer noticeably more competitive. A want can be identified when there is no clear benefit to the customer. Wants are almost always tied to a feature with no significant benefit. Note that customers will always tell you what they want and seldom what they need. No one wants to look needy. They hide needs, so you must dig really deep to get at them.
Ask, is your organization oriented towards feature marketing or benefit marketing (some call the latter solution marketing, but I try to avoid it because it is too easy to confuse with feature marketing). The difference can be easily seen in an organization’s advertising and sales materials. Now, feature marketing is not always bad and it tends to dominate consumer marketing, where customers buy more on wants than needs. But in business – and especially when in the development process of high ticket items like semiconductor equipment, where you get only one shot at the market – it is most critical to focus on needs and benefits.
The failure of Iridium, the Motorola driven satellite phone company, is a good example of the perils of ignoring this maxim. Iridium was supposed to be the next phone system to replace cellular. It was designed to let you call from anywhere: even the jungles of the Amazon or the heights of Mount Everest. But this is a want, not a need - - except in the rarest of circumstances. It was targeted at globe-trotting executives whose cell phones often don’t work due to technical differences such as standards or allotted frequency as well as due to a lack of licensing agreements to permit roaming. The idea was that a ring of satellites around the planet would be an elegant, if expensive, way to get around all the local government and technical issues. Executives certainly wanted this and they need it to some extent. Except there was one huge overriding need that marketing and engineering missed. Business is conducted indoors. There are significant benefits to having a phone that works indoors. If the phones could not be used indoors, satellite phones would be useless in their most lucrative market. As it turns out, Iridium phones could only be used outside, because buildings interfere with transmission of signals vertically with the satellite overhead.
Another example is the development of CVD tools for multi-level interconnect in the mid-eighties. In 1984, furnace companies dominated CVD: Thermco and BTU were the Applied Materials and Novelluses of their day. It became clear that new tools were needed. The furnace companies used feature marketing. They went to customers and asked them what they wanted. The result was vertical furnaces. Bob Graham, who led marketing at Applied was famous for using benefit marketing. He wanted to know what the customer was trying to build and what their problems were. They were trying to build the first multilevel metal interconnect structures. Uniformity, step coverage, and void formation were the top issues. Bob then handed this information over to engineering. Dan Maydan and David Wang took it to develop Applied’s P5000. Brad Mattson left Applied, and through a circuitous route, founded Novellus and developed the Concept One. Both products were wildly successful. The P5000 put Applied into CVD’s top spot one year after its introduction. Now here is the amazing thing: most of the marketing execs at the furnace companies never got it. They simply didn’t see these new architectures as competitive. The customers had asked for a vertical furnace and they had built it. They hadn’t asked for single wafer platform based systems. Moreover, Applied’s P5000 cost 3X and had 1/3rd the throughput of a furnace. The furnace had a 9X cost-per-wafer advantage. But it had one fatal disadvantage: it couldn’t do the job - - it couldn’t build what the customer needed to build. The P5000 and the Concept One were enabling technologies because they enabled multi-level metallization. So, when in search of an enabling technology, search for the needs and benefits.
