Summary of "Differences Between Selling Services vs Products vs Solutions"
Summary: Differences Between Selling Services vs Products vs Solutions
Key Themes
- Comparison of selling products, services, and combined solutions in B2B sales.
- Strategic positioning and pricing tactics for each offering type.
- Emphasis on differentiation, value delivery, and risk-sharing.
Selling Products
Challenge: Products, especially commoditized ones (e.g., available on Amazon), compete primarily on price and logistics.
Differentiation Tactics: - Provide superior customer education and guidance. - Offer better service terms or delivery experiences.
Risk: Without differentiation, products become commodities, leading to price wars and margin pressure.
Selling Services
Nature: Services are inherently unique due to human involvement, making them less commoditized.
Key Differentiator: Focus on results rather than just selling resources (e.g., hourly rates or personnel).
Common Trap: Selling services as hourly resource blocks commoditizes the offering and limits pricing power.
Recommended Approach: - Bundle services into discrete deliverables or project phases with clear outcomes. - Use fixed-fee pricing tied to results or deliverables rather than pure time and materials. - Time and materials billing is appropriate only when project scope is highly uncertain (e.g., litigation). - Share some risk with clients to justify premium pricing.
Sales Framework: - Use consultative selling by exploring the client’s problem, impact of non-resolution, importance, and success metrics. - Align pricing with agreed-upon success measures, not just hours worked.
Example: A patent attorney charging higher fixed fees but delivering faster, higher-value outcomes than cheaper alternatives.
Selling Solutions (Product + Service)
Approach: Avoid breaking down pricing by individual components (products, services) to prevent clients focusing on cost minutiae.
Value Messaging: Position the offering as a comprehensive solution delivering a specific outcome or experience.
Analogy: Instead of itemizing sandwich ingredients, present the price as the cost for the full lunch experience.
Benefit: Simplifies buying decisions and emphasizes value over cost.
Actionable Recommendations
- When selling services or solutions, shift conversations from resources to results.
- Use fixed-fee, phased deliverables to manage scope and pricing.
- Share risk with clients to create alignment and justify premiums.
- Educate clients on the impact and success criteria before quoting prices.
- For products, focus on differentiation through service or experience rather than competing on price alone.
- For solutions, package offerings holistically to emphasize outcomes rather than line-item costs.
Frameworks & Concepts Highlighted
- Consultative Selling Quadrants: Understand problem, impact, importance, and success metrics.
- Fixed Fee vs Time & Materials: When to use each pricing model in services.
- Risk Sharing: Sharing project risk with clients to enhance value perception.
- Bundling Deliverables: Packaging services into phases with defined outcomes.
Presenter
Ian Altman, Host of the Same Side Selling Podcast
Category
Business
