“Customers don’t buy products. They buy the benefits those products offer to them” - Peter Drucker
This truism has become even more important in the post-cloud world. Buyers are not technical. They care about business outcomes, and want to understand how your solution will help them meet their objectives, not what’s going on under the hood.
For businesses pursuing a product-led-growth motion, the focus must be on users, their daily workflows and pain points. Users care about how a product can make their lives easier and remove pain. The features which help deliver those outcomes are only a means to an end, and not what customers are ultimately interested in. Therefore, those features are also not why customers buy.
The price a B2B customer is willing to pay for a proposition depends on its economic value alongside the buyer's perception of value. Price is a fact: it's tangible, verifiable and easily compared across suppliers, whereas value is intangible, less easy to compare across suppliers, and can be influenced and shaped in the buyer’s mind.
By getting your positioning and messaging right and positively influencing buyers’ perceptions of value, it is possible to have a dramatic effect on the prices that customers are willing to pay.
“Marketing changes your pricing. Pricing changes your marketing.” - Seth Godin
ProfitWell, a data-driven revenue automation and optimisation platform, has demonstrated through its research that positioning statements can have as much as a 40% impact on a customer’s perceived willingness to pay for B2B propositions. Having a full customer case study demonstrating the value of the proposition can increase willingness to pay by 20%. These insights underline just how important positioning and messaging are for influencing a customer’s perception of value and price.
As case study, let’s look at Calendly, a meeting scheduling tool pursuing product-led growth. The business does an excellent job of emphasising benefits rather than features. They differentiate their core message across their three customer segments to best reflect the needs of each segment:
Then, within the enterprise segment, Calendly differentiates its message based on what each function in the organisation cares most about and views as success:
Calendly’s messaging strategy is a masterclass in connecting the proposition to the problems customers are actually facing and the outcomes they are most looking for. And best of all, there isn’t a feature list in sight.
In her book “Loved”, Martina Lauchengco presents a useful framework to help businesses crystalise their message. The ‘one-sheet messaging canvas’ contains all the key elements of a product's story and how it should be messaged. She advises filling it out through an iterative process of discovery with customers.
Be sure to invest time in determining how to best position your proposition, and the messaging you use to reinforce that position, as it will have a direct impact on your customers’ perceptions of value and what they are willing to pay.
Loved: How to rethink marketing for tech products. Martina Lauchengco
ProfitWell: Which tactics will increase willingness-to-pay?