The book The Five Great Rules of Selling (1947) by Percy H. Whiting stated:
 
“Leo McGivena wrote: ‘Last year over one million quarter- inch drills were sold — not because people wanted quarter-inch drills but because they wanted quarter-inch holes. When you buy an automobile you buy transportation. When you buy When you buy a mattress you are buying comfortable sleep. When you buy carbon paper you are buying copies.’”
 
Harvard Business School’s Theodore Levitt (1925-2006) wrote in Marketing for Business Growth (1974):
 
“Why do people buy products? Leo McGivena once said, ‘Last year one million quarter-inch drill bits were sold—not because people wanted quarter-inch drills, but because they wanted quarter-inch holes.’  People don’t buy products, they buy the expectation of benefits.”
 
Leo McGivena (1896-1980) worked in advertising. It is not known when he first made the saying, but versions of it were cited in newspaper ads in 1942 and 1946.
 
“Don’t sell drills—sell holes” is a shortened form of the saying.
 
[This entry includes subsequent research by the Quote Investigator.]
   
     
Wikiquote: Theodore Levitt
Theodore Levitt (March 1, 1925, Vollmerz, Main-Kinzig-Kreis, Germany – June 28, 2006, Belmont, Massachusetts) was an American economist and professor at Harvard Business School.
 
Attributed
People don’t want to buy a quarter-inch drill, they want a quarter-inch hole.
. Dick Martin (2009). Secrets of the marketing masters: what the best marketers doand why it works. Amacom. p. 74. ISBN 978-0-8144-0943-5.; Clayton M. Christensen, Michael E. Raynor (2003). The innovator’s solution: creating and sustaining successful growth. Harvard Business School Publishing Corporation. p. 99. ISBN 1-57851-852-0.
     
12 December 1942, Somerset (PA) American, pg. 6, col. 7 ad:
Income Checks
Hardware stores report that over one million men bought one-quarter inch drills in one year. Not one of those men wanted the drills. They wanted quarter inch holes in metal or wood.
People who buy life insurance don’t want life insurance; they want monthly income for their families.
Make sure your income will continue by having one of our policies.
PROVIDENT MUTUAL
 
10 November 1946, Mercury-Chronicle (Manhattan, KS), pg. 10, col. 6 ad:
Who Sells Life Insurance?
L. E. “Doc” Hobbs
We don’t want to sell you Life Insurance…we want you to know and have what life insurance will do. A 1/4 million drills were sold last year, no one wants a drill. What they want is the hole.
 
Your Own Local Life Insurance Company has only the sincere desire to furnish food, clothing and shelter to your loved ones if you die too soon, or a comfortable old age to you and yours if you live as you hope.
The Manhattan Mutual Life
L. E. “Doc” Hobbs
District Sales Manager
 
Google Books
The Five Great Rules of Selling
By Percy H. Whiting
New York, NY: McGraw-Hill Book Co.
1947
Pg. 39:
Leo McGivena wrote: “Last year over one million quarter- inch drills were sold — not because people wanted quarter-inch drills but because they wanted quarter-inch holes. When you buy an automobile you buy transportation. When you buy When you buy a mattress you are buying comfortable sleep. When you buy carbon paper you are buying copies.”
 
Google Books
Marketing for Business Growth
By Theodore Levitt
New York, NY: McGraw-Hill
1974
Pg. 8:
Why do people buy products? Leo McGivena once said, “Last year one million quarter-inch drill bits were sold—not because people wanted quarter-inch drills, but because they wanted quarter-inch holes.”  People don’t buy products, they buy the expectation of benefits.
 
Google News
19 March 1981, The Times-News (Hendersonville, NC), “Business Mirror: America SuffersFrom Shortfall Of Wisdom” by John Cunniff (AP Business News Analyst), pg. 14, col. 3:
1. Know your business. “It isn’t determined by products or profits,” he said, citing an observation by Harvard’s Theodore Levitt that drill makers sell holes, not drills, and another by the inventor of the reaper, Cyrus McCormick, that his product was economics, not reapers.
 
Google Books
Marketing Imagination:
New, Expanded Edition
By Theodore Levitt
New York, NY: The Free Press
1986
Pg. 128:
It is characterized by Leo McGinneva’s famous clarification about why people buy quarter-inch drill bits: “They don’t want quarter-inch bits. They want quarter-inch holes.”
     
Google Books
From Employee to Entrepreneur:
How to Turn Your Experience Into a Fortune
By Richard Worzel
Toronto, ON: Key Porter Books
1989  
Pg. 34:
If you’re trying to sell drills, you’ll probably fail. If you sell holes, then you’ve improved your chances immeasurably.
 
Twitter 
Market Energy
‏@MarketEnergy
Don’t sell drills, sell holes in walls.  Sell what you can do for the customer rather than the features of your product or service.
3:08 AM - 22 May 2009
 
Inc.
June 2, 2015
Don’t Sell Drills, Sell Holes
With Product Life Nearing Infinity, You’d Better Be Selling Solutions Rather Than Things
BY HOWARD TULLMAN
CEO, 1871
One of the oldest clichés in business school is the statement that “customers want ¼-inch holes, not ¼-inch drills.” That’s a pithy way of reinforcing the idea that your primary focus and messaging in presenting your product or service to the customer-; and ultimately, properly setting and meeting customer expectations-; should be as closely aligned as possible with the results and benefits they seek. People don’t want copiers; they want clean, quick and inexpensive copies from machines that never break, jam or run out of toner.
 
Bitcoin Magazine
Matthew Roszak on Bitcoin’s Killer App: “Don’t Sell Drills, Sell Holes.”
by JACOB DONNELLY on AUGUST 18, 2015
I had the pleasure of talking with Matthew Roszak, Founding Partner of Tally Capital, for an interview series on my newsletter,
(...)
“There’s an old adage in business that says, ‘Don’t sell drills, sell holes.’ Consumers and businesses are looking for solutions that leverage this new technology and some of its keystone attributes of security, privacy and decentralization.”