The other day I was listening to a podcast on the Smart Passive Income blog that really got me thinking. The guest was a guy named Dane Maxwell, and he was basically on the show to talk about and promote his approach to building a software business.
The core concept behind the approach was to FIRST spend the time and effort to identify an important problem in your potential customer’s life. Only after you’ve identified a very specific problem that a number of people really want solved and are willing to pay for do you start developing a product. A cool product isn’t enough. You have to solve a painful problem.
A similar theme came up in a recent meeting within my company. We were talking about our competitors and reading through some of their sales materials to get an understanding of how they were selling and how we could differentiate. What really struck me was that there sales pitches were essentially a long list of FEATURES. As in: these are all the cool things we can do. Nowhere was there any concrete mention of BENEFITS, the real value the customer would actually stand to receive.
All of this is interesting for a variety of reasons, but it got me thinking about how we as individuals make our spending decisions in our everyday lives. Are we buying features or are we buying benefits? The answer to that question can make all the difference in the world when it comes to managing our money well.
What’s the difference between a feature and a benefit?
If you didn’t know you wanted something until you heard about it, that thing is probably a feature. If instead you’ve identified something you want in your life, that’s a benefit and you can then look for a product that provides it.
As an example, my wife and I just recently went through our first car-buying experience. This was like a PhD crash course in features vs. benefits.
When you first start doing your research, you’re inundated with a huge list of features that the different types of cars offer. Just to give you a small taste, here are some of the different features you can choose from, just when it comes to the seats in the car:
- Leather seats
- Heated seats
- Power seats
- Reclining seats
- Height-adjustable seats
- Bucket seats
- Removable seats
- Folding seats
- Seats that drive, brew you coffee and get your kids to be quiet all while you catch up on the latest game of Angry Birds
I only made one of those up. See if you can guess which one.
Seriously though, all of those different feature options just to do with seats! It’s crazy!
Here’s the thing. If you go into this process without a clear focus, it’s very easy to get caught up in all of the different features being offered and to lose sight of the real benefits that you’re looking for. You start evaluating one car vs. another based on things like height-adjustable seating without first having decided whether you actually had a problem that required height-adjustable seating as a solution. If you never had that problem in the first place, why would you all of a sudden need the solution?
In contrast to the focus on features, you can approach your car buying experience by first defining the benefits you’re looking for. For my wife and I, with our expanding family in mind, the short list of benefits we wanted looked like this:
- Seating space for our kids and eventually their friends.
- Cargo space for all of the “stuff” kids require.
- Ease of getting all of those people and that stuff in and out.
- Low lifetime cost of ownership.
- Adequate safety features.
All of the other features that cars offer these days were 100% irrelevant. They might be cool, but they weren’t benefits to us. They weren’t solving any specific problem that we had identified, and therefore they weren’t anything we needed to care about. They simply didn’t matter. Our evaluation solely came down to how well the vehicle could meet this short list of desired benefits.
How you can thrive by focusing on benefits
When we focus on features, we trap ourselves in the never-ending cycle of wasting money on things we don’t need. We get lost in a quest to have all of the latest and greatest features without ever taking a moment to step back and evaluate the actual problems we have in our lives that need to be solved. This is the kind of mentality that sends us into debt and prevents us from ever achieving any kind of financial freedom.
If we instead flip our mindset and first identify our real problems or the real things we want out of life, and use those as a guide to specify the benefits we’re looking for from a product, we start living a life where our money is spent carefully and purposefully only on things that enrich our lives in a meaningful way.
Money is simply a tool. If we use it well we can free ourselves to live a life of meaning and fulfillment. If we waste it, we make ourselves prisoners to the need to earn more. The choice is ours.
So the next time you’re making a financial decision, ask yourself whether you’re buying a feature or a benefit. The more we can focus solely on the benefits and spend our money on the things that truly matter to us, the better our lives will become.
Image courtesy of Photokanok / FreeDigitalPhotos.net