Differences Between Marketing a Product and Marketing a Service
Services are intangible:When you buy a product, you have a fairly good idea of what you’re buying because you can physically see it – and maybe even give it a trial run – before you buy. The selling process involves ordering the product, paying for it, and having it delivered within a few days. On the other hand, services are highly customized and tailored to your client’s specific needs. Prospects may come to you knowing exactly what they want, or ask you to fix a problem that they don’t know the cause. Usually, there is an initial period of up front work to diagnose the problem and offer a solution outlined in a proposal. Your client then accepts your proposal, pays an initial amount, and you start working with them for up to several months or even years. With this comes an element of uncertainty. Prospects must evaluate whether you can do what you say you will, whether your proposed solution is right for them, and whether they can develop a good working relationship with you.
Service marketing involves building relationships and working together with clients:With products, chances are that once you buy the product, you’ll never see the salesperson again. With services, however, often times the person that comes to the consultation is the person your clients will be working with. Therefore, that initial consultation is the first step in building a working relationship and setting expectations that will be carried through the rest of the project. If the initial ‘personal chemistry’ just isn’t there, you’ll save yourself a lot of headaches walking away from the job.
Service providers must be more selective when choosing prospects:You can sell a product to anyone with the money to buy it. With services, money is a factor, but there are a number of other qualifiers. These include whether your services match the problem your prospect wants you to solve, how easy the prospect is to work with, and whether your prospect will be satisfied with the services you provide. You want to weed out any clients you believe might become ‘difficult.’ Ideal clients are ‘good fits’ with your company.
Objections can be warnings rather than something to be overcome:With product selling, salespeople are trained how to overcome their prospect’s objections. They’re goal is to make the sell regardless of if the prospect wants it. With services, objections may be a red flag warning that this prospect is a ‘bad match’ for your company.
Pricing differs with projects:With products, pricing is fairly standard and easy to calculate. Vendors can negotiate within a certain range to give discounts for bulk or frequent orders. Often, there are economies of scale with the more products that are produced. Services, however, usually are more difficult to price. There is initial work involved in diagnosing your prospect’s problem, estimating the job, and preparing a proposal. Some firms charge an initial fee just to do the analysis required to draw up the proposal for the problem. Once your client accepts, they’re getting your time, and your time is valuable. You have bills to pay, salary requirements and other clients that require your attention, so you don’t have nearly as much flexibility with pricing.