Marketing 101- Selling Services as if they were Products

Marketing 101: Selling Services as if they were Products

Last updated: 6/16/2002; 10:21:40 AM

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Marketing 101: Selling Services as if they were Products

With the number of people that are currently out of work (and it's nowhere near as good as the government wants us to believe), I get email from every day – and from every country – about people wanting to consult and not knowing quote how to do it. In this article I'm going to talk about "Selling Services As If They Were Products". This is a marketing technique which lets consulting services be sold more effectively. I've been doing this, with moderate success, since 1992 and I've always been pleased with the results.

Understand the Customer's Viewpoint: Services Versus Products

The first thing to understand about purchasing something is that it involves risk. If it's a software product then the risks are something like these:

It might not work
It would take time
It might lose data

Now with services, the risk is different. The risk is more one that is perceived by the customer than actual. For example, the customer sees a consultant and some of the following questions come to mind, either explicitly or implicitly:

What can he do for me?
What does it cost?
What do I take away from it?

Now, whenever a customer has questions, those questions are disincentives to purchase – they make the customer NOT want to purchase. If the customer has too many questions then he or she just won't purchase. And, in my mind, three questions is too many. That's three separate opportunities a customer has to not spend money with you. You just don't want that.

Productizing a Service

As you can probably guess, my solution is to "productize" a service offering. This means taking whatever service you offer and making a product out of it. This brings up the obvious question – when everything is so often just bits anyway, what's the difference between services and products? Here's my take on it:

Products are clearly defined – there is a "spec" for a product in the form of product literature. Good product literature goes a long way towards making customers feel better about purchasing a product. And you can do product literature for services too (examples below).
Pricing is clear – there certainly are products where pricing isn't clear. But, by and large, most products have clear pricing models that can be understood. There is no reason why you can't set a price for a service offering, and not lose money on it — if your "spec" is clear. This means that your "product literature" for the service has to spell out the terms of your offering.
There's a take away – this is very important to a customer. Having something tangible, be it code, a report, a signed off set of bugs, an mp3 file (see below, I'm getting to it) makes people feel good and it validates the overall transaction.
Products are easy to purchase – this is really, really important. Everyone is so busy today that if you don't make the purchasing process just plain drop dead easy for your service then it's not going to happen.

Examples

I'm going to illustrate this with a practical, real world example (this service actually exists). I'm not certain if my description of how they got started is or isn't correct but it's plausible. Let's say you were an experienced open source programmer in PHP. There is always a market for technical support. You set up a web site and focus not on big support contracts but on providing support via email, AOL Instant Messenger, Jabber, etc. And you charge $26.95 per month. This web site actually exists, www.phphelpdesk.com, and they really meet all the criteria:

Pretty good web site for product literature.
Clear pricing.
Take away (solved problems / example code).
Easy to purchase (they could really do better here).

They seem to do a really good job. I don't think there is a Python help desk. Anyone out there want to run with this?

Conclusion

Selling services as products isn't a panacea – it tends to lower the price and that can be bad. The real benefit though is that not only does it make it easier for customers to purchase from you, it also gets people used to purchasing from you. One thing that you can generally count on is that once people purchase from you once, if you do a good job, they are much more likely to purchase again. The reason for this is that having let them "sample from the menu with an appetizer" they are better prepared to hire you for bigger projects i.e. "the full meal".

Postscript: Putting My Money Where My Mouth Is

If there's anything in this world that's just plain annoying, it's when consultants pontificate about things but never, ever follow through. That's just wrong. So here's my new "service as product":

Marketing 101: The One Hour Crash Consult.

Product Literature:

See http://www.fuzzygroup.com/services/marketing101/onehour/

Quick Description:

Looking for marketing help for your high tech product or service? Email me or IM me and we'll set up a scheduled 1 hour voice call to discuss your situation. Let me know your website url in advance and I'll make sure that I'm up to speed so you don't have to educate me. Not in the U.S.? If you have a high speed connection then we can use Yahoo Messenger. I did a two hour call last week to Hong Kong and it worked pretty much flawlessly. And it's free.

Price:

Normally $100 U.S. but $60 U.S. for bloggers if you mention this article. Offer valid through September, 2002. Sign up for six sessions for $300 (that's one session for free!).

Pay By:

Amazon Tip Jar or PayPal.

What do I Take Away?

I'll record the whole session as an MP3 file and let you download it afterwards. You can then give this MP3 file to your inhouse marketing staff rather than worrying about taking notes, etc. This is a great way to informally capture knowledge.

Question You're Thinking But Don't Want to Ask:

Does this mean that you won't answer emails any longer? Nope. I know quite well that this isn't for everyone but I suspect that it will be useful for some. The benefits of a real time interaction, particularly one that you can play back after the fact, are huge.