March Newsletter

Jahg Newsletter 11/14/05

by

Sam Cain, S.CAIN Business Strategies

        Howdy folks,  the weather is getting colder and winter is right around the corner, and once again its newsletter time.  Our topic this month is "Selling A Service vs. A Product".

Selling A Service vs. A Product:

          How selling a service by giving it the visibility of a guarantee can reassure your customer when buying your service.

Selling A Service vs. A Product

        Services are booming. Nine out of every ten new jobs created today are in service companies. According to Statistics, over 75% of workers today are in the service sector. So selling a service should be easy, right? Wrong!

When you sell a service you are selling something that doesn’t exist yet. Consumers buying a service can’t kick the tires. Visit an accountant, lawyer, or hairdresser – you can’t try out the service before you buy it. You order it. Then you get it. In fact, most  services you buy,  touch, taste, feel and sight are unseen.

Intangibility is one of several unique challenges in selling a service versus a product. To reduce intangibility buyers look for signals of service quality. They need to be assured they are not making a mistake. Some companies deal with this by offering service guarantees.  Restoration business offer a full range of restoration services in the event of fire, flooding or other disasters. Response time is critical in their industry. Their service guarantee reflects this by promising to be there in three hours and to have an estimate within 24 hours. They also guarantee to do the job right the first time or do it over with no questions asked. Another example of a service guarantee is Century 21 Home Realty who guarantees to buy homes listed with them for 90% of the appraisal value if they don’t sell in 90 days.

Sometimes services companies add tangibility by providing a physical product with their service. As an example, dentists routinely give patients a toothbrush after each check up. Many dentists personalize toothbrushes by imprinting them with their name, address and phone number.

You don’t have to use products to add tangibility, however. After my son’s first visit to the pediatric dentist, we received a letter welcoming him to the practice and explaining the procedures which were performed. The letter was an easy way to add tangibility to the service. It also differentiated this dentist from others and provided a reminder of the services rendered.

Reminding clients what services you provide for them is key. Because services are intangible, people may not know exactly what went into preparing a tax return or creating a financial plan. Or they may simply forget how many times they called their lawyer for a quick answer until a higher than expected invoice arrives. When selling services it is important to remind clients what they are getting. Periodic account reviews, written or conducted in person, can help reinforce the value of your service and keep your company top of mind, too.

Services-based professionals often add tangibility by letting clients know what their credentials are. For example, doctors and lawyers almost always display framed diplomas prominently in their offices, letting clients know the educational institutions they graduated from, when, and with what degrees. Large accounting and consulting firms use notices in newspapers to inform the public about new staff members, their experience and credentials.

Other service professionals, such as graphic artists, use portfolios of their work as evidence of service quality. They show potential clients examples of logos, brochures, ads, and direct mail pieces created for others to help reduce anxiety in the decision making process. Any company whose services result in a physical product can add tangibility this way. For example, some print businesses effectively promote their services by reprinting samples of high quality work created for clients.

Not being able to see what you are getting before you buy a service may be a daunting proposition. Take cosmetic surgery as an example. To help clients understand the realm of possibilities, some clinics offer free seminars. Computer imaging is available for those who want to see how they might look after surgery. The seminars and the computer-generated images help add tangibility by letting potential clients "see" changes before buying the service.

Not all service companies produce a physical product which can be used to showcase their abilities. Mediators can’t show clients a resolved family dispute. Psychologists can’t point to clients counselled through difficult emotional times. They can still add tangibility to their services, however, through the use of testimonials. The words of satisfied clients act as a vote of confidence for your abilities. Even in situations where client names cannot be used for confidentiality reasons, testimonials can be a very effective way to convince prospective clients to try your service.

In some instances, customers never want to see your service. Natural gas delivery and hydroelectric services are good examples. Although consumers only care that their houses are warm or that they have power, it’s still a good idea to ensure they know what they are paying for. Some utility service companies have newsletters called they use to educate consumers. An example would be an article telling consumers how much electricity various household appliances use and the associated costs. Helping consumers understand the service value equation will become even more important in the future.

Consumers buy services differently than products. While you may never be able to let them kick the tires, you can make your service more visible by adding tangibility.

So until next month talk to you later.

Send questions comments on this newsletter to my email below.

Sam Cain

S.CAIN Business Strategies

Business Strategies, Marketing Strategies, & Internet Business Solutions

www.s-cain.com

email: cain@s-cain.com