Marketing Products vs Services

Here are 8 differentiating factors.

How can consultants avoid generic marketing advice that is irrelevant (and often harmful) to their businesses? This is one of the questions that I've been recently pondering.

Based on conversations with +100 independent consultants, I'm convinced the root of the problem is that most marketing advice is not explicit about its assumptions. And it turns out that most product marketing assumptions, when applied to the consulting world, are simply false.

It follows that the starting point to improve your marketing would be, then, identifying what those key differences are.

The textbook distinction between products are services is always centered around tangibility. Products can be shown, touched, and displayed, while services not. Selling the intangible comes down to selling yourself, or your ability to deliver on your promises.

There are, of course, occasions where those lines are blurred. The most popular examples include SaaS (software as a service) and productized services (also known as SaaP, service as a product). But let's not get into that now.

What really matters to us though is understanding how the traditional differences between products and services affect the marketing decision around each.

So far, I've identified 8 key factors:

  1. Delivery / Separability: When a business sells a product to a customer, the buyer takes it away with them. But services, especially consulting services, can't be separated from the provider. It is possible for a client to be dissatisfied with a strong, tested and tried offering if the consultants who sold it provide a poor client experience.
  2. Ownership / Transfer: A product can be resold after being bought and used. A service is neither owned nor can be transferred to another party. While you as a consultant can help clients build capabilities to promote self-sufficiency, I couldn't find any examples of clients who were able to resell those capabilities.  
  3. Use / Consumption: Consumers can typically choose when to use their products. Services are "consumed" either immediately, or according to the commercial agreement. Again, there's some nuance here - some products have expiration dates. But the point stands.
  4. Time / Holding period: Usually, consulting services are provided at a specific time for a specific period - after this, the service agreement must be renewed or cancelled. A product can be bought and owned without any time constraints.
  5. Degree of customization: Typically, products are designed, built, and delivered to a range of customers "as standard" while services can more easily be customized to individual clients. This is not always true - we can find both companies who produce individually personalized products and consultants who sell highly productized solutions at scale.
  6. Competition analysis: If you sell products, you can quickly see what competitors and substitute brands are doing. The same happens if you market productized services. Consulting engagements, however, are typically confidential and witnessed by only a small group of people at a time.
  7. Speed of offering design: You can quickly change the components, ingredients, packaging, label, or even the name of a product. Consulting services are delivered by people, and it takes time for people to change. Creating new offerings might require you to acquire new skills and cultivate expertise.
  8. Market validation: Selling products allows you to quickly test changes in scale (for example, using paid advertising to drive traffic simultaneously to multiple offerings, A/B testing every detail). Consulting engagements are not scalable and your target audience is typically small, which requires different (and slower) ways to validate new offerings, messaging, and positioning.

Just a few of these should be enough for you to avoid listening to marketers whose experience is linked to products or B2C. It's a whole different game. Creating your marketing strategy on top of false assumptions is a recipe for disaster.

Is there any other differentiating factor you would add to this list?

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