Features, Benefits and Value Proposition. What’s the Difference and Why Does It Matter?

Features, benefits and value proposition. What’s the difference and why does it matter? The difference between these things goes far beyond a market messaging exercise; it goes to the core of who a company is. It has been my experience that value is the focus of “Outside-In” oriented companies, those that are focused on solving customer problems and features are the focus of “Inside-Out” oriented companies.

“Superior customer value is the “true north” of an outside-in strategy. “It is a centering concept that keeps the whole organization focused on what matters” asserts George Day and Christine Moorman in Strategy from the Outside In. Peter Drucker taught that "It is the prospect of providing a customer with value that gives the corporation purpose, and it is the satisfaction of the customer's requirements that give it results." To create results, a focus on customer value must truly penetrate an organization; it must be part of the fabric of its culture. It is the rudder of the company.

In the world of science and technology, companies are frequently Inside-Out oriented. After all, their scientists, clinicians or technicians have applied their ingenuity to the invention and/or development of new, cool and exciting approaches. Their inventions can be awe-inspiring, beyond the conception of most people. They pour tremendous investment of thought, time and money to bring their idea forward; it’s their baby. The natural tendency is to showcase the intricacies of such products and solutions. They frequently share these innovations with their circle of colleagues, who also appreciate their creation. Innovators and even early adopters, as described by Geoffrey Moore, are excited to apply the newest approach; the company sees initial success. They gear up, bring on a few sales representatives and hit a revenue wall. What happened? They have spent their development and messaging efforts focused on the features of their solution but have not stopped to truly listen and understand their customer’s problem, how their solution addresses that problem, the differential value of that solution as compared to alternative approaches and the concrete outcome of applying that solution (the So What?). Although innovators may have easily translated features to value, the general market place does not share that mindset.

In contrast, "outside-in companies,” as described by Day and Moorman, start with the market to design their strategy, use deep market insights to inform and guide their decisions and every part of the organization is focused on “achieving, sustaining, and profiting from customer value.” They utilize their first few clients to intentionally listen to customer voices and to refine their technical, operational and messaging approaches. As they move from selling to the market innovators to the market majority, they clearly articulate well-defined value to clients: what’s in it for them.

Are you an “Outside-In” or “Inside-Out” organization? Are you truly seeing past your own reflection?