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Products vs. Services: The Type of Business You SHOULD Be In

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Products vs. Services: The Type of Business You SHOULD Be In

A few weeks ago I was at a marketing workshop and the presenter wanted to know what types of businesses were in the room.  She asked us to divide ourselves into two categories – those who sold Products and those who sold Services. 

I’ve heard this request before and it’s a fairly straightforward question in these situations. But this time, as I began to position myself on the side of the room with which I identify, I froze in crippling uncertainty.  In that instant my brain started running all kinds of abstract calculations trying to decipher my place in the world (and therefore, my place in the room).  It felt weird. 

The unfortunate result was me standing there in the middle of the room with a worried and puzzled expression… as if English was my second language and this question reached just beyond my linguistic capabilities.

I was having my very first identity crisis which is typically defined “due to a change in your expected aims or role in society”.  I’ve been in business for years, but I suddenly had no idea what the hell I was actually selling.

Well, the floor didn’t open up and swallow me (as I had wished it could in the moment).  And since throwing the entire workshop into personal, existential crisis wasn’t really an option, I did some Google-ing when I got back to my office.

According to Michael Wolfe, Co-founder of Sagan Systems – the brains behind Gladly:

  1. A product is something that, once you buy it, you have it.  A laptop is a product.
  2. A service is something that only lasts as long as someone is doing something for you.  Broadband is a service.

But this didn’t help.  I was inexplicably caught between two (seemingly) simple and obvious worlds.   At it’s most basic, my company, Portrait Store, sells profile photos to professionals.  A Product.  You pay me. I give you a thing. 

But here’s where it gets tricky.  No one really cares about the photo.  Of course, the customer cares… but the photo isn’t for the customer.  It’s like a stage play.  The play isn’t for the performers.  It’s for the audience.  You buy a ticket to a play (product)… but the result you’re actually buying is the entertainment (service).  So which is it?

There are loads of reasons clients come to me for a portrait, it’s really not about the photo.  First, there’s the bragging rights having been photographed by me…  (it’s kind of a thing).  Second, people love the experience.  That is what people consistently talk about in social and testimonials.  And when I sit down to improve my business, I DO NOT try to figure out how to make a better photo (Product).  I spend my time refining the overall, end to end experience – from sales to delivery and beyond.  Essentially, I spend my time polishing the Service.

I’m not dancing around the issue here.  If you want to focus on the Product itself, no one comes to me to buy a “photo”.  What my customers really want is attention.  They are buying significance.  Our Product is a means to an end.  And that end is differentiation in the marketplace.

Yes, I sell a Product.  But that product can be obtained almost anywhere.  And yes, the customers must walk away with a physical offering.  And yes, that offering must be exceptional in every way.

BUT.

I do not pretend for one moment that my Product is what people want.  They want a result.  That result is much more akin to the broadband example above.  It is a digital, intangible, sequence of zeros and ones that inspires Credibility, Trust and Connection.  My photos provide a Service.  And as I reflected on some of the other business in the room that day, I realised that many other companies exist in the same Product vs. Service grey area right along side me.

Ever since I started communicating what I sell as a result of a Service, my sales conversations have changed dramatically.  People are way more eager to buy a result.  And the most interesting side effect is that the price conversation is fading into the background. 

The benefits of this shift have been overwhelming.  So I encourage you to experience the same existential identity crisis I did… maybe just not in front of 75 other people.

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