Whether you’re just starting or you run a fully established organization, the success of your business is highly dependent on the success of the product or service you’re offering.
If you’re starting to grow your business, you may think you know what your company does. But even more critical is articulating your product vision to others clearly. Our sales strategy consultants can help you work out a winning sales strategy and thus propel your business.
This post expands on a few exercises that explore and answer, “What is your product or service?” It sounds trite, but defining your product or service forms the foundation of your sales strategy.
Defining any product or service is a multi-step, in-depth process, so be prepared for detailed note-making and reflection.
Why Should You Define Your Offerings?
When it comes to your product or service offerings, clarity is essential. Defining the products or services you sell differentiates your offering in the marketplace, which is key to revenue growth.
It brings numerous benefits vital for the success of your business, such as:
- Effective communication of value proposition: When you articulate your unique selling point to customers, they understand why they should choose your offering over competitors.
- Creating a clear business roadmap: A roadmap guides decision-making processes, helping you allocate time and resources effectively.
- Enhancing marketing and sales efforts: Gain a deeper understanding of your user base and their needs, which empowers your marketing and sales teams to tailor their strategies for maximum impact.
- Optimizing product development: Identify key features and benefits that align with your customer’s needs so you develop products and services that better meet their expectations.
- Improving customer support: Grant your team a comprehensive understanding of how your offerings work and how customers should use them. This knowledge translates into more effective and efficient customer support, enhancing overall customer satisfaction.
By defining your products and services, you position your business for growth, customer loyalty, and improved competitiveness in the market.
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Step 1: Identify the Core Purpose
If you’re unsure how to define your product or service, you can start by answering the following:
- What customer pain points (problems) does it alleviate?
- What value does it add to their lives?
- How does it make their lives better?
- What do you hope to achieve with our product or service?
All products and services solve customer problems. Therefore, defining the problem your product or service solves is the first step toward success.
For example, let’s pretend you’re a meal kit company. You might conclude your product provides convenience as customers don’t have to think about what to cook. Therefore it makes meal preparation easier and frees up time.
You may also strive to help your customers cook nutritious meals to achieve a gainful competitive edge over fast food businesses.
Common examples of product purposes include:
- To help people stay organized and productive
- To help people learn new things and grow
- To help people connect with others and build relationships
- To help people make a difference in the world
- To support basic survival, such as shelter, sustenance, and warmth.
The core purpose of your product or service is something you should be proud of, believe in, and be excited to work towards.
Step 2: Know Your Target Customer
In marketing and business, a “target customer” refers to the people most likely to buy your goods and services. Here market research is paramount in determining who will benefit the most from your business.
Many different types of data are used to narrow down your product or service’s primary users, including, but not limited to:
- Demographic data (age, occupation, gender identification)
- Psychographic data (ambitions, worries, values)
- Behavioral data (likely to buy online, use social media, etc.)
Some questions you can ask to determine your target audience include:
- Why would potential customers be interested in your product or services?
- How will they use it?
- What features of benefits interest them the most?
- How would they describe the product or service to a friend?
Why It’s Important to Define Your Target Customer
Only once you identify who is most likely to buy from you can you focus your resources on reaching those individuals. Understanding your target audience enables you to concentrate your marketing endeavors more effectively, leading to improved outcomes. This knowledge empowers you and your team to identify the most suitable channels to promote your products and services.
Without a clear understanding of your target audience, your marketing materials may be misdirected toward the wrong individuals. This impedes sales progress and wastes valuable resources. On the flip side, a targeted approach will always save time and money.
Step 3: Define the Customer’s Needs
There are three different types of customer needs:
- Functional: The basic needs your product or service needs to meet to be helpful. For example, a hairdryer must be able to dry wet hair.
- Emotional: These needs make your customers feel good or satisfied. For example, a car can make them feel safe, secure, and stylish.
- Social: This is related to how your customers wish to be perceived by others. For example, a handbag can be a status symbol and a way to communicate an individual’s personality.
The best way to define your customers’ needs is to talk to them, analyze your current data, research competitors, and do general market research.
Tips to Get Effective Customer Feedback
- Be specific: When you ask questions about customer needs, be specific. Don’t just ask, “What do you need?” Instead, ask questions like “What are your pain points with our product or service?” or “What features would you like to see added to our product or service?”
- Listen carefully: When you talk to customers, listen carefully to what they say.
- Don’t just focus on the questions you have prepared.
- Pay attention to their tone of voice, body language, and facial expressions.
- Be open-minded: If a customer says they don’t like something about your product or service, don’t take it personally. Instead, see it as an opportunity to learn and improve.
Once you have gathered enough data, you can identify the common themes and patterns. This will help you understand your customers’ needs and how to meet them better.
Step 4: Do a Product Matrix Analysis Exercise
A product matrix visually represents your products’ or services’ different features, benefits, and pricing. It will give you a better idea of how to define your product and can be used to make product development, pricing, and marketing decisions.
There are two different types:
- Feature comparison matrices compare the features of different products or services to help you understand the strengths and weaknesses of your products or services relative to your competitors.
- Market comparison matrices compare three different products in terms of features, benefits, and pricing to understand the strengths and weaknesses of different products relative to each other.
The questions you need to ask to create a product matrix depend on your business goals.
Questions to Ask When Creating Your Product Matrix
Some common questions include:
- What are the different products in our portfolio?
- What are the key features of each product?
- What are the target markets for each product?
- What are the pricing points for each product?
- What is the competitive landscape for each product?
- What are the product roadmaps for each product?
- What are the critical metrics for success for each product?
You can use different factors to create your matrix, such as features, price, target market, or competitive landscape.
Below are some examples of additional questions you could ask to create a product matrix:
- Features: What features do each of our products have? Are there any features that are unique to a particular product?
- Price: What are the different pricing points for our products? Are there any discounts or promotions available?
- Target market: Who are the target customers for each of our products? What are their needs and wants?
- Competitive landscape: What are the other products in the market that compete with ours? What are their strengths and weaknesses?
- Product roadmap: What are the plans for the future development of each of your products?
Step 5: Describe the Product/Service Features
You create your product or services for customers, so using precise language when describing them is essential. What is evident to you may need to be clarified for your target audience.
When brainstorming how to communicate your product or service features, you should:
- Start by identifying the key features of your product or service. What are the things that make your product or service unique? What are the benefits that your product or service offers to customers?
- Be specific in your descriptions. Don’t just say your product or service is “easy to use.” Explain how and why that’s important to customers.
- Use clear and concise language. Avoid jargon and technical terms that your target audience may not understand.
- Focus on the benefits of your product or service. What problems does your product or service solve for customers? How does it make their lives easier or better?
- Use customer testimonials and case studies to support your claims. This is a great way to show potential customers how your product or service has helped others.
- Keep your descriptions brief and to the point. No one wants to read a long, rambling explanation of your product or service.
Product/Service Description Examples
Here are some examples of product and service descriptions:
- Product features:
- Easy-to-use interface
- Lightweight and portable
- Long battery life
- Durable construction
- High-quality materials
- Service features:
- 24/7 customer support
- Free shipping
- 30-day money-back guarantee
- Easy-to-use online platform
- Personalized recommendations
As you can see, these examples are specific, clear, and concise. They also focus on the product or service’s benefits. By following these tips, you can describe product or service features in a way that will help you sell your product or service to potential customers.
Step 6: Outline the Product/Service Success Criteria
Every company has different service and product success criteria, although it usually boils down to three overarching metrics:
- Increased sales – measured in units sold, revenue generated, or market share.
- Improved customer satisfaction – measured through surveys, reviews, or social media mentions.
- Reduced costs – calculated in decreased production, marketing, and overhead costs.
Your success metrics should be specific, measurable, achievable, relevant, and time-bound (SMART). We also advise involving relevant stakeholders (sales, marketing, customer support) during this process so everyone is on the same page.
An example of realistic success could be things like:
- Increase sales by 10% in the next quarter.
- Reduce customer churn by 5% in the next year.
- Increase customer satisfaction scores by 20% in the next six months.
Document the requirements, KPIs, target values, and other relevant details for reference throughout the product or service development process.
Why It’s Important to Determine Success Metrics
Outlining produce and service success metrics is super essential because :
- They help you win over stakeholders. Meaningful metrics that directly tie back to business objectives make it easier for product managers to convince stakeholders of the value of their product roadmap.
- They lead to better product decisions. The right metrics help product managers make more intelligent decisions about product improvements and prioritization.
- They provide an early warning signal. Monitoring the right metrics can help product teams detect problems with their product or user experience early on, so they can be addressed quickly.
- They set the stage for success. Meaningful metrics help product teams build better products by fueling data-driven decision-making.
Step 7: Define the Product/Service Foundation Requirements
Service or product foundation requirements (PFRs) refer to the technical and non-technical requirements you must meet to ensure the successful production of your product or service.
These high-level requirements define the overall scope of the product or service and the key features and functionality that must be included. PFRs are often used to help stakeholders understand the overall product management and ensure everyone is aligned on the goals and objectives.
Technical PFRs encompass:
- The Manufacturing Process: What steps are used to produce the product or service?
- Materials: What types of materials need to be used? Where are they sourced from? What type of quality are they?
- The Equipment: What equipment is needed? How often does it need to be maintained? What are the training requirements for operators?
- Quality Control Procedures: What quality control measures are used? How frequent are inspections? What are the corrective action procedures?
Non-technical PFRs include:
- The Workforce: What are the training requirements for your workforce? What qualifications do they need?
- Documentation: What documentation is required to produce your product or service?
- Environmental Impact: What are mitigation measures to reduce environmental impact? Which government policies need to be adhered to?
PFRs aim to ensure your product or service is produced consistently and reliably and meets customer and stakeholder requirements.
Helpful Tips to Determine Your PFRs
Additional tips when developing your PFRs:
- Involve all stakeholders: Get input from all stakeholders, including the production team, the quality team, the environmental team, and the customers.
- Be specific: Make your PFRs specific and measurable. This will help ensure the requirements are clear and easily verified.
- Be realistic: Additionally, PFRs should be realistic and achievable. If the requirements are too challenging to meet, the product or service may not be successful.Be
- flexible: Be prepared to make changes as needed.
Conclusion: Reflect and Seek a Professional Help
Remember, just because you sit around all day thinking about your business doesn’t mean anyone else understands what you do. Defining products and services that appeal to customers takes serious, detailed work.
Lay it out, refine, and repeat. Simplify and focus.
By following the principles outlined above, you can create a description that will significantly impact potential buyers and lead to increased sales and enduring loyalty.
If you need help figuring out how to define your service or product or simply want help crafting your messaging, you don’t have to go at it alone.
Schedule a free two-hour sales advisory session with us to dig into your business and identify areas you can improve your messaging, pricing, or product/service fit.
Brad Kreutz is an Advisor for small business owners with Cultivate. Brad has a passion for translating business goals into strategy. Pulling from more than 17 years of experience as a 4x co-founder/owner, Brad brings an outside perspective to help business owners overcome their challenges, create a scalable platform, and grow their business.