Product Knowledge: What it is, and how to develop it for your business

What is Product Knowledge?

In the most basic form, product knowledge means an understanding of the details and features of a product.

As simple as it sounds, it's a crucial skill for entrepreneurs and salespersons because it directly affects the profitability of the business. Of course, it's embarrassing for the company if its management keeps answering ‘I don’t know’ too many times when a customer asks about your product.

Though usually, potential customers come with a level of knowledge about the product, that is not always enough to make them buyers. In-depth product knowledge from the side of customer-facing employees is what does the trick to persuade them to convert.

Typically, product knowledge includes:

• The problem your product solves v/s features v/s benefits

• An understanding of the shortcomings of the product such that you are able to answer whatever concerns customers might have.

• Business competition for product positioning

• Latest industry trends

• Complimentary products for partnerships, acquisitions, or new launches

• Potential customization that customers might ask for

• Product specifications and how it meets the needs of customers
  
  What qualifies as product knowledge is usually fluid and broad. Depending on the context, a salesperson, customer, product manager, and even an investor may need to have Product Knowledge.

How does a lack of product knowledge harm your business? 

The absence of product knowledge among your organization’s stakeholders causes a communication gap that widens if not fixed. Here’s how it affects your business operations:

Low customer satisfaction

You will notice how your customers experience dissatisfaction every time they report a problem. On not receiving the right solution, they might lose trust in your business’ capabilities to solve their problem. It’s typical for everyone to expect a level of reliability from a business and its employees in terms of product knowledge.

Reduces brand authority

Efforts to nurture product knowledge create a confident staff who are often the face of your company. If they are poorly trained with improper product knowledge, they might offer subpar services. This further translates to a bad word of mouth, or worse, bad publicity.

Amazon is known for its customer service obsession. But a simple search on social media highlights how quick people are to complain publicly about their customer dissatisfaction. The image showcases how amazon representatives and chat screenshots get shared easily when service is poor.

Low Sales

The inability to convince buyers to purchase will automatically lead to low sales. Developing a confident sales or customer support staff requires deep product knowledge training. The idea is to pass on this confidence gained over the product to potential customers for a successful sale.

Redundant Pipeline Development

Pipeline development in the business world refers to a business’s process of turning potential customers into actual customers.

From the first point of contact with the potential customers, the salesperson should start displaying high-level product knowledge. This is necessary to maintain the potential customers’ attention and keep them interested. The subsequent stages of pipeline development should continue in the same fashion until the customer is retained.

When there’s a lack of product knowledge the developed sales pipeline will be unable to convert potential customers into actual customers.

Lack of ideas for business growth

Not having product knowledge means no ideas for brainstorming strategies to take the business forward. This includes the insight to analyze competition, extend existing products, etc.

For example, Kodak completely missed the digital camera trend even when it had the necessary technology. This indicates a lack of product knowledge among management in terms of how the industry would shape in the coming decades.

Why Kodak Willingly Ignored the Future of Photography - Cheddar Examines

Also, with the constant change in demands of customers, businesses that lack product knowledge may get left behind as they will be unable to explain their new products to customers. Customers want something new and innovative but what they appreciate more is an explanation of how best to use it.

What are the key elements of product knowledge? 

A salesperson or an entrepreneur can get started with product knowledge by learning about these key aspects of their product:

Product research

Involves digging for more information about a product apart from what is already known. In-depth product research, including technical knowledge, helps the salesperson remove jargon and simplify their pitch. Customers are least uninterested in your industry jargon, and it is up to your team to digest and explain it to them in simple terms.

Competitor analysis

Every industry will likely have more than two businesses providing similar services. Hence, you need to know how you will differentiate. For this, direct and indirect analysis of the competitive landscape helps position your brand’s product in the market. You can start with a simple SWOT analysis matrix and strategize to counter strengths and benefits from their weaknesses.

Sales Analysis

Entrepreneurs should pay close attention to sales analytics data and trends to make profit-inspiring decisions. Having the knowledge of which product sells the most and the least helps you to know what’s working and make predictions for strategy.

Customer behaviour

Mapping your customer’s mindset and knowing how they think helps you to avoid building product features that nobody wants. It is also ideal to pay attention to what the customers feel when they interact with your products.

Value Proposition

How does your product truly change the customer’s life?

The product’s value proposition statements help answer this question. It is a summary of what value your business provides to its target customer. For example, it can help save costs, raise status in society, help earn more revenues, etc. Business owners and their staff must understand their product value statement and attempt to live it. 

Importance of Product Knowledge in a business

Let us understand how Product Knowledge helps various departments of a thriving business:

Importance of Product Knowledge in business operations

A business operations department ensures the smooth running of the business. They keep a tab on the day-to-day activities of the business. Having good product knowledge and insights makes it easy to make quick decisions in daily operations.

Importance of product knowledge in customer service

The knowledge that the employees of a business have will determine whether they can provide satisfactory answers to the customer’s questions and problems. Through solid product knowledge, customers of a business can get accurate and confident solutions communicated to them. This improves your customer service experience and helps you to win customers and their confidence in your brand.

Importance of product knowledge in product management

Product managers are at the heart of building a product as per the organization’s goal. They track the growth of the product in line with customer feedback. Product knowledge is important to their work because it makes it possible for them to empathize with the customers and satisfy their needs.

Importance of product knowledge in sales

There is a direct correlation between extensive product knowledge and the sales of a business. Customers are more attracted to reliability, trust, and confidence. These are qualities that can only be transferred and communicated through solid product knowledge. 

How to improve Product Knowledge?

The key to improving product knowledge is to focus on nurturing Product Integrity in your organization.

Product Integrity is how your product can exceed customer expectations in terms of customer satisfaction and quality. Read this article by Harvard Business Review to further understand what Product Integrity is.

To improve this product integrity, we briefly summarize a list of steps you can take to strengthen the Product Knowledge of your organization’s stakeholders:

1. Product testing

The popular saying that seeing is believing also applies in the context of product knowledge. It will enhance your employee’s product knowledge if they get to use the product by themselves to understand how it works.

2. Empathizing with customers

There should be frequent interrogation rounds between the customers and your employees on their pain points and opinions about the product.

3. Incentivize the skill

Reward employees that consistently prove to have great product knowledge via quizzes, events, role changes (like taking up a customer service role for a week) etc. 

4. Organize training

Create in-house and out-of-office training for your employees where they can experience sessions on improving their product knowledge. 

5. Create a knowledge base and contribute to it frequently

For example, you can create an onboarding program for newly hired employees so that they can get accustomed to your products. It’s also useful to create a knowledge base consisting of webinars, tutorials, product help guides, etc.

How to turn product features into benefits?

A well-explained product feature does the job of convincing customers. For this, benefit segmentation is done for deriving value proposition statements that clarify: 

• Why your product feature exists

• How your product solves customer problems

You have to thoroughly explain the advantages of the feature and then relate it to the customer’s problem. Then, explain how your product is the best solution in the market.

The most important part is explaining why the customer needs to buy it at all. If all these are done successfully, a product feature is better represented as a benefit.

Overall, honing Product Knowledge might come off as extra work for stakeholders beyond product or marketing teams. This is why management often makes the mistake of overlooking it. This can result in costing your existence as Kodak's example shared. Hence, better design your organization such that everyone is in touch with the product and provides inputs and feedback to make it better.