Is your business selling a product or a service?.

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Posted by Tom Salvat - 08 December, 2016

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Service vs Product—Marketing Differences

Is your business selling a product or a service? Believe it or not, many business owners and executives get the answer to that question wrong the first time. What exactly is the difference between a product and a service? And what about a solution?

It is true that many marketers use the words product, service, and solution almost interchangeably, or they often mislabel what it is their business sells. As this article brings out, sometimes marketers will call a product or a service a solution, thinking that using a buzzword will increase sales.

(And, it may be true that calling a product the solution will get you more sales at first. Bending the truth with your customers is never a smart business plan long-term.)

To put it simply, a product is something tangible, something you can hold. Even if the product is software or something that you download online, and so it is something that you can't actually hold, it is something that is held on the hard drive of your computer. It is something you pay for and then own, and it is usually something you only have to pay for once.

A service is something a person or a group of people do for you. You may pay one time for a limited time service, or you may continue to pay for a service in the form of a weekly or monthly or yearly subscription.

A solution is often a combination of a product and a service. It is a custom package for a person or business that provides a (you guessed it) solution for the customer's problem. Hiring a PR firm, for example, usually means paying for a business solution, which may include a bundle of many services (copywriting, consulting, etc.) and products (logos, uniforms, etc).

If you are having trouble figuring out which of the three your company offers, don't be discouraged. It is possible to blend the services and products in several different ways. But, usually, the core offer is only one: either a product or a service.

When Services and Products Blend

The lines between services and products often blend, and this can cause confusion. Also, some business offers are very new, thanks to developing technologies, and this may make it confusing to put that offer into a single slot.

Take CONCURED as an example. We offer a line of services to help you optimize your content marketing business. But, because services are being performed by an artificial intelligence, it may seem like we are selling a product. But the core offer is still a service, albeit a service being performed by a machine and not by humans.

Many companies blend the lines between product and service. Apple, for example, sells products, such as computers and mobile devices. But because those devices also come with an operating system that constantly updates, you could see those updates as a form of service, a service that is attached to the core product of the device you bought from Apple.

Another example is Elegant Themes. Elegant Themes is one of the leading sources for premium WordPress themes in the world. But, you can't actually buy any of their themes as a single product. Instead, you must subscribe to an on-going service, a service that provides the availability of all of their premium themes as downloads. As you continue to pay the subscription for the service, all the themes and plug-ins continue to update automatically for you. If you ever leave the service, you can still keep the products that you have already downloaded, but they will no longer be able to update.

Sorting through how much of your offer is a product and how much of it is a service will help you to decide in what way you will market that offer. Even though there is not much difference between marketing a product or service, and most core marketing principles apply evenly to both types of offers, let's look at a few of the specific differences between marketing for a product and marketing for a service, so you can customize your marketing projects to the core offer of your business.

Products—Fulfilling a Core Need

Ever heard the Marketing 101 adage "highlight benefits and not features"? That advice was custom designed for products.

Even though a product is supposed to be a "thing" that the customer buys, that does not mean that a product should be something stale or stagnant. The customer is not buying a rock. Often the product is sophisticated software or a complicated machine. Products are supposed to do something to help the customer.

Customers usually buy a product in order to fulfill some need. They view the product as a quick solution to their problem. A great way to market products is to highlight the needs they can fulfill for the problems they can solve.

While it is true that selling a product has a higher risk because they usually have a higher cost for production before they can even begin selling, products do have many unique advantages that should make them easier to sell in the long run.

For example, it is usually easier to see the benefits of a product and the positive effect that product can have in just a short time. If you have a headache and buy some pain pills at the store, for example, you will know if those pain pills worked for you within 20 minutes. You, as the customer, will quickly develop either a positive or negative opinion of that product, and you bought that product (the pain pills) in order to fulfil a specific need.

Services—Building a Relationship

Marketing a service has its own set of challenges. For one thing, it isn't so easy to see the positive effect of a service, and any benefit will probably take a longer period of time to reveal itself. If you hire a consultant or the life coach, for example, you can't expect to see huge changes after your first one-hour session. You expect that that service will need to continue for some period of time before you will see the desired effect.

Because services are often not designed to quickly fill a need or solve a problem, the emphasis in marketing services should be more on establishing a relationship between the service provider and the potential customer. In this case, the focus may often be more on who is providing the service than the service itself.

So if I am selling you a new set of tires, the emphasis would be more on the tires than on me. After all, you, the prospective customer, are looking to buy tires, not a tire salesman. However, if I am offering the service of rotating and aligning the tires on your vehicle, focusing on me is the service provider as a clean, respectful, smiling person would be more important. It's not so easy to show in a TV commercial or written article quality of work of many services, but it is easy (and necessary) to show that you can trust the person or people that would be providing the service.

As we can see, there are slight differences between marketing a product or a service. After you have clearly defined the kind of offer your business will promote, shifting the emphasis of your marketing may help you to earn customers you may not otherwise win over. Don’t get caught in the marketing buzzword of “solution” unless that is what you’re truly providing.

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Topics: Content Strategy


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