Business Strategy
Add the Right Service Component to Your Product and Watch Sales Grow
Is the grass really greener on the other side of the fence?
It always seems like companies that are entrenched in providing services want to become more product-oriented, and those that already offer products are looking to branch out into services. Somehow, things always look better on the other side. The truth of it is that there are pluses and minuses to both products and services, and you need to be realistic about potential pitfalls before you jump over the fence in either direction. Companies generally recognize the difficulty in moving from services to products. However, product providers tend to be a bit cockier about transitioning their businesses -- and often set themselves up for failure in the world of services.
Make sure that the service you offer enhances the value of your product
If products are your strength, you don't want to do anything that will adversely affect your internal business processes or detract from your image in the marketplace. Offering the wrong kinds of services can actually hurt your product business. So think about your products first. What could you do to make your product more valuable to customers? Would online services keep customers on board with your product strategy? Should you beef up your consulting or systems integration teams in order to create more demand for your products and help customers use them more effectively?
Use services to build customer relationships in a different way
The best thing about offering services is that they help you build and maintain customer relationships in ways that products cannot. Products providers are most often treated like vendors -- easily replaced by a competing company with a better widget or a lower cost. Your tenure with your customers will be lengthened if your products are unique and your customers have made significant investments in them. However, services help you cement long-term, and generally stickier relationships with customers. And that may be what you need when your product offerings inevitably lose some of their luster in the marketplace.
Look for opportunities to set up new sales
Use services as selling tools for your products. In other words, think of the services that you offer as an extension of your product sales effort. Online services can be helpful in tracking customer interests and providing valuable knowledge to key decision makers. When you add people to the service mix, you will have more opportunities to detect and shape customer requirements. You will also become part of customer teams in the process. By offering the right services, you can create a powerful machine that will increase your product sales, create more opportunities for the future with your customers, and leave your competitors in the dust.
It always seems like companies that are entrenched in providing services want to become more product-oriented, and those that already offer products are looking to branch out into services. Somehow, things always look better on the other side. The truth of it is that there are pluses and minuses to both products and services, and you need to be realistic about potential pitfalls before you jump over the fence in either direction. Companies generally recognize the difficulty in moving from services to products. However, product providers tend to be a bit cockier about transitioning their businesses -- and often set themselves up for failure in the world of services.
Make sure that the service you offer enhances the value of your product
If products are your strength, you don't want to do anything that will adversely affect your internal business processes or detract from your image in the marketplace. Offering the wrong kinds of services can actually hurt your product business. So think about your products first. What could you do to make your product more valuable to customers? Would online services keep customers on board with your product strategy? Should you beef up your consulting or systems integration teams in order to create more demand for your products and help customers use them more effectively?
Use services to build customer relationships in a different way
The best thing about offering services is that they help you build and maintain customer relationships in ways that products cannot. Products providers are most often treated like vendors -- easily replaced by a competing company with a better widget or a lower cost. Your tenure with your customers will be lengthened if your products are unique and your customers have made significant investments in them. However, services help you cement long-term, and generally stickier relationships with customers. And that may be what you need when your product offerings inevitably lose some of their luster in the marketplace.
Look for opportunities to set up new sales
Use services as selling tools for your products. In other words, think of the services that you offer as an extension of your product sales effort. Online services can be helpful in tracking customer interests and providing valuable knowledge to key decision makers. When you add people to the service mix, you will have more opportunities to detect and shape customer requirements. You will also become part of customer teams in the process. By offering the right services, you can create a powerful machine that will increase your product sales, create more opportunities for the future with your customers, and leave your competitors in the dust.