The new season of the Bavarian Business Plan Competitions has begun! To mark the occasion, we are launching a business planning special with valuable tips and tricks on business planning. In this blog post, we will focus in particular on presenting the customer benefits of your solution.
The customer or user should be at the centre of every business concept. Your product must be entirely geared to their needs: If you think past your users, you will not find any users, no matter how impressive the offer is. Therefore, make sure that your customers understand the benefits of your product and want to buy it. Keep in mind that the understood benefit alone is not always sufficient for a purchase decision.
On our competition pages we provide you with an overview of all the chapters that a business plan should cover.
Before you go into the concrete benefits of your idea, describe your business idea and the corresponding product or service clearly and understandably. It is important that the readers of your business plan have a good understanding of the core of your business and the benefits derived from it.
- Show how your solution, product and/or service differentiates itself from competitors' offerings.
- Also address the status of your product development and the necessary further steps to market maturity.
- Avoid going too deep into technical or scientific details and product features at this point.
- However, it is advisable to include photos of your product or explanatory graphics for clarification.
The length of the chapter on customer benefits should be about 4 pages.
Based on the description of your solution, derive the "relevant customer benefit". This is the benefit that is so significant and attractive to the customer that he/she would like to purchase your product or service or would be willing to switch to you. Derived from the characteristics of your solution, also show your competitive advantage and the economic added value that your solution makes possible for potential customers.
Describe which customers you are targeting and develop a customer profile. Does your product target business customers (B2B = Business to Business) or private end consumers (B2C = Business to Consumer)? Keep in mind that the benefit from a certain product or service is different for a business customer than for a private household as an end consumer. While the private consumer may be more price-sensitive, quality and time aspects are usually in the foreground for an industrial company.
Therefore, you need to know not only your customer, but also your market: Put yourself in the position of your future customers. It is not you who buys your product, but your customer. Good knowledge about customers, markets and your own potential are the prerequisites for the successful realisation of new product or service ideas.
- Do you know the value creation processes of your customers, their problems and needs? Only then you can identify customer needs.
- At what point in the value creation process of your customers are you able to create a benefit?
- How can you earn money and create value for the customer?
Ask yourself what meaning and significance your product offer or service has for your target customer group
For example, if you supply products that are important for the critical success of a company (e.g. raw materials in a chemical company, steel plates in a mechanical engineering company), absolute delivery reliability and high quality are crucial. If, on the other hand, you produce products of secondary importance to the customer (e.g. office supplies), quality may be less important, but you can score points with a favourable price and easy procurement.
Therefore, ask yourself why your product is better than comparable alternatives. You create customer value when your new product adds value to existing products and services. Your project based on a new product or service idea must be superior to previous offers.
It is not your new solution itself that is important, but its added value for the customer. Explain what function the product or service fulfils for the customer. Quantify the benefit that the customer can derive from it in terms of time, cost and quality.
This customer benefit should be unique and, in a positive sense, clearly differentiated from your competitors, i.e. it should have a significant differentiating or unique selling proposition (USP). Uniqueness often lies in the price, in the design, in special technological features or in the combination of several features.
- A better benefit or added value (e.g. technology, service)
- Better communication (advertising, design, packaging)
- A better price-performance ratio
Describe in the business plan where you are today with your product development or business idea. Try to avoid technical details and explain clearly the current stage of your product development or business idea, the next important development steps and the development goals. Only address the development status and the further development steps of your product or service.
Stick to the facts – an overly "optimistic" presentation may open a door for you with an investor, for example, but if you are unable to serve it, it will obstruct future financing opportunities.
Try to answer the following questions for yourself and note down the results for your elaboration of customer value:
- What is your product (what is the core product, and what additional offers do you provide)?
- Who is your customer?
- What benefits do customers derive from your solution?
- What is the relevant customer benefit?
- How does your solution improve the customer's situation (in the long term)?
- Are you planning further variants, additional products, services in the short, medium and long term?
- What assumptions do you base your quantifications on? To what extent do you save the user time/costs or deliver high quality of a product or service?
- Which target customer groups and/or which end customer groups do you address?
- Which versions of your product/service are intended for which customer groups and types of application?
- What competing products to your product already exist or are in development and how do they differ from your product?
- For what reasons is your product/service/solution (or comparable competing products) not yet on the market?
- What are the requirements for development and production and do you already fulfil them?
- What is your stage of development?
- Do you already have a Minimal Viable Product (MVP) or a prototype?
- Do you already have users?