Product Benefits: Different Types and How To Identify Them
By Indeed Editorial Team
Published August 25, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.
Providing product benefits to customers is a key component of creating a product or service that generates profit. Understanding what makes your product or service appealing maximizes your ability to develop and market it effectively. This can help you set your product or service apart from the competition to increase its chances of being a success. In this article, we discuss what product benefits are, the different types of product benefits, how to identify the benefits your products provide and examples of product benefits in action.
What are product benefits?
Product benefits are any positive impact that a good or service has on the experience of a consumer interacting with it. Customers may note immediate benefits or long-term benefits, which they might experience at increasing levels the longer they use your product or service. Each benefit you provide to customers also provides them with another reason to decide to purchase your product or service. For example, a video game console manufacturer may call attention to its improved graphics, affordable price and expansive collection of games in comparison to a competing console.
Types of product benefits
Product benefits come in two primary types:
The first type of product benefit is an actual benefit. This type of benefit has a practical effect the consumer can experience and see in the real world. For example, a wheelbarrow that can carry more weight than its comparably priced alternatives provides an actual benefit to consumers who purchase it.
The second type of benefit a product can provide is a perceived benefit. This is a perk related to the image that your product projects and the effect that can have on the customer. When consumers perceive a product to be a luxury item, for example, it can provide a perceived benefit to consumers because of others viewing it as a sign of status.
How to identify product benefits
In order to maximize the impact that your product benefits can provide to the company, it's important to know how to identify them. This allows you to bring focus to the best features of your product or service and make the most appealing demonstration of its value to consumers. Follow these steps to determine the product benefits for a good or service that you offer:
1. Assess a product's functions
The first step in determining the benefits your product can provide is assessing all the features it offers to consumers. By thoroughly understanding the different functions available to users and the different ways that a consumer may implement your product, you can identify its strengths.
You may have developed a list of goals for your product's performance during design and manufacturing. This provides an effective starting point for identifying its key benefits. However, it's possible that you may discover unplanned benefits that further improve the appeal of your product. By performing tests with your product throughout design and manufacturing, you can identify both the efficacy of intended benefits and any unexpected benefits that may appeal to consumers.
2. Analyze the market
Another key element that can determine the benefits your product provides to consumers is the market into which you're releasing it. Performing a market analysis allows you to determine what the demands are within the market and the available supply meeting those demands. This can help you identify unmet demands or demands which are being serviced but not to the quality level that your product offers.
Understanding market conditions can be beneficial for identifying product benefits after you've completed your product and are determining your methods of marketing, as well as during production when you can make adjustments in order to customize your product or service to meet customer needs. The more thoroughly you understand the market conditions for your product, the more effectively you can identify and make use of your product benefits in order to appeal to potential customers.
3. Monitor sales trends
Once you've brought your product or service to market, you can gather sales data. The more detailed your sales data is, the more useful it can be for analysis and identifying new opportunities. When making sales online, integration with social media platforms can allow you to gather extremely detailed information about the customers making purchases and sort by different demographics.
Analyzing your sales performance data can be an efficient tool for identifying potential product benefits you may not have been aware of. When you discover your product performs particularly well within a certain group, it provides insight that there may be a benefit to performing further analysis on that demographic in order to determine what about your product appeals to them. This can allow you to cater your marketing within that group. You may also potentially identify a benefit other groups are less familiar with and publicize it in order to expand sales to a broader population.
4. Perform customer surveys
Customer feedback is one of the most direct methods of gathering important information about a product and how the public receives it. You may conduct customer surveys during development as focus groups, as well as after release by issuing surveys to people who buy your product or service. Customers may also contact you directly in order to provide their thoughts and opinions about the product and services you offer.
These direct responses to using your product are a valuable form of benefit analysis. It provides customers with the opportunity to state their favorite elements of the product or service you offer. If you discover a common popular benefit during this phase, it can be a sign that consumers received it particularly well and provide guidance for future marketing decisions or product development.
Examples of product benefits
Product benefits come in many forms, and it's beneficial to understand different types of actual and perceived product benefits in order to better identify the specific benefits your products and services can provide to customers. These examples feature both types of product benefits in order to broaden your understanding:
Actual product benefit example
Actual product benefits provide tangible or measurable advantages to a customer. The type of benefits a product or service may provide varies significantly by field and product specifications, but here's an example of how an actual product benefit can improve a consumer's life:
An automotive manufacturer releases a new vehicle that uses a hybrid engine that includes both gasoline and electric power. The hybrid engine has a significant impact on the fuel economy of the vehicle, raising the average miles per gallon that the vehicle can cover. This has a real and tangible impact on the fuel spending of the purchaser, making it a financial actual benefit. For long drives, the vehicle requires fewer stops for gas on the way to the destination, helping drivers save time as an additional actual product benefit.
Perceived product benefit example
Perceived benefits from a product are commonly social or internal. The perceived benefit may align with an actual benefit provided by the product or service, or it may be entirely perceptual. It still provides its perceived value in both cases. This example shows how the perceived benefit that a product or service provides might appeal to customers:
A home security company provides customers with decals they can place on their windows and signs they can place in their yard that announce the presence of their security system. Having an announcement that the home has security provides the homeowner with an added sense of security that a potential burglar is less likely to choose their home. This provides a perceived benefit as increased peace of mind for the homeowner. Installing the security system also provides the homeowner with satisfaction from investing in security for their home to protect their family, providing further perceived product benefit.
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