Is selling a service more difficult than selling a product? Many salespeople think so. Whether it's a sophisticated computer system, a vacation home, a digital stereo, a new Jaguar sedan or a replacement window, it can be seen, touched, demonstrated and appreciated.

When it comes to a life insurance policy, banking services, the idea of volunteering or accounting services, the sales job seems more difficult. Many salespeople want something tangible to sell because there's more to work with. The customer can listen to the sound system, drive the Jaguar or walk through the vacation home.

The Differences Disappear

On closer analysis, the two may not be so different. Selling intangibles may even have advantages. For example, all sales are made in the customer's mind. The older man with a young family buys a large insurance policy. It's expensive because of his age, but he is pleased and excited about the purchase. It can give him immense satisfaction because he has the assurance of knowing that he has taken care of his family financially. All he has in his hands is a life insurance policy, but in his mind he has a picture of a responsible person doing what's right for the people he loves.

In the same way, a businessperson engages the services of a high-priced law firm. Why? They charge more per hour than other lawyers and whether or not they are more competent than other firms can be questioned. What they have is what the business owner covets: the law firm's cachet. The sale is in the mind.

Creating The Right Strategy

It's what the customer is thinking that makes the difference between a sale and no sale. The difference between tangible and intangible is irrelevant. The effective salesperson makes the intangible tangible, while an inept salesperson loses the deal because he fails to create the proper picture of the new home in the customer's mind. In other words, Jaguars are bought for intangible reasons, while financial planning services are often sold to meet very tangible objectives. But the sale always takes place in the customer's mind.

Against this background are those who contend that selling services is highly personal and mainly dependent upon "making contacts" and "networking." While sales can certainly be attributed to so-called personal selling strategies, both the consumer and business-to-business environments have changed dramatically. Being in the right place at the right time is increasingly difficult but, even more to the point, the costs of personal selling make this form of marketing excessively expensive.

Setting The Stage

Selling services successfully depends on a few basic principles -- or subtleties -- that are relatively easy to master and put into practice. Here they are:

1. Look for the picture in the customer's mind. What's going on inside the customer's head? Without an accurate understanding of what the customer expects, there's no way to make a sale. Even if the customer buys, a sense of dissatisfaction will linger in the buyer's mind that will eventually result in the customer making a change.

When the customer thinks about banking services, for example, it's essential to quantify or fill out the picture. What are their likes and dislikes? What are their expectations and needs? Without an accurate understanding of the image in the customer's mind, no sale of services can be successful.

2. Match services with the customer's expectations. The banker spoke proudly of the benefits of locked boxes and sweep accounts to the business manager of a small company. She was rightfully excited about her bank's new services. Unfortunately, she failed to take the time to discover the business manager's expectations in a banking relationship. As a result, she was unable to match expectations with the bank's services. After deciding on another bank, the business manager commented, "They didn't understand us."

An accounting firm may have a long menu of services, everything from audits and computer systems to business consulting. The length of the list is irrelevant. The key to success is recognizing what satisfies the customer's perceived need. It's true, of course, that the customer may actually require additional services, but those are best left for another time. To discuss them prematurely is to run the risk of alienating the prospect and will likely lead the prospect to conclude that the accounting firm is driven only by its agenda. Satisfying what's in the customer's mind at the time is key to making the sale.

3. Create a concrete identity for the services you offer. One of the key points in selling services is making the intangible tangible -- real -- in order to create value and to establish competitive differentiation.

Even companies selling tangible products are faced with marketing certain services. One oil heat dealer, Federal Heating & Engineering Co., Inc. of Winchester, Massachusetts, sells both home heating oil and heating systems, both tangible products. But this is only part of the business. They also sell heating system service contracts and provide financing for the furnaces they install. To create a concrete identity for their service policy, they adopted the "Comfort Zone Service" label. The same approach was taken with financing, and the name "Boiler-on-a-Budget" was given to the program. While many dealers offer service contracts, only one has "Comfort Zone Service." And while others may have financing options, Federal Heating offers the "Boiler-on-a-Budget" program. The task is to transform generic services into actual, quantifiable products with names that convey an image of the value that the service provides.

There are many examples of this. American Express markets a Platinum Card which carries a $300 membership fee, and Delta Airlines has taken the generic frequent flyer program and transformed it into SkyMiles.

4. Make the benefits of your services specific and concrete. Perhaps the most challenging task in selling most services is making the benefits concrete or enlivening them.

For the average privately-held business, paying for an audit is not money well spent. It must be done each year, but it's difficult to grasp it's usefulness. The astute accounting firm, however, offers more than the mandated audit report. It takes the information from the audit and massages it into a proprietary report that provides interpretation, explores implications and raises questions. The goal is to transform a required audit into a business information resource. While accounting firms tend to view audits as "bread-and-butter" work, even this basic product can be transformed into a means of attracting new business by making its benefits concrete and valuable.

This concept applies to all service businesses. The insurance agency that takes the time to create an "Annual Asset Protection Report" for key business insurance clients has an opportunity to demonstrate to customers the benefits of a unified, cohesive and comprehensive program. By providing a quick overview of all the client's insurance coverage, the document demonstrates the value of the insurance investment.

5. Position yourself as the expert in the field. "New" and "improved" are two of the most powerful words in marketing. They get attention. While they are used to sell products, they are almost never used in selling services. Yet it is relatively easy to create a competitive advantage for a services firm simply by the proper use of new and improved. There's no engineering or architectural firm that's providing services in the same manner as five years ago. The same is true for accounting, law, dentistry, healthcare, financial planning, management consulting and any other field. At the same time, how many of these firms capitalize on new and improved ways of providing client services? How many actually communicate to customers and prospects the beneficial changes that are taking place?

Aside from professional firms, the dry cleaner has expertise in clothing care. Yet few take advantage of an opportunity to be appreciated by their customers as clothing care experts. By sharing their knowledge with customers, through newsletters, in-store flyers and advertising, they can shape the customer's perception of the value of the service. This is also a way to increase the worth of the service in the customer's mind and help overcome pricing issues.

6. Intensify relationships by becoming your customer's primary provider. Insurance agents and others have long talked about "cross-selling." For the most part, it's been talk and little more. Auto insurance is with one agent, a homeowners policy is with another, while life and health are with others. Not only is this inefficient for the customer, it's wasteful for an insurance agency.

One marketing firm offers customers an array of public relations, media relations and advertising services, along with printing, direct mail and promotional products. The objective is to achieve customer satisfaction by becoming a single-source supplier.

The Renaissance Plan, a Massachusetts-based workers' compensation organization, offers a full spectrum of risk management options in order to create programs that fit individual companies. If a special service is needed, The Renaissance Plan people take care of it. This is what's required, because it's doing it the customer's way.

7. Articulate why it's in the customer's best interest to do business with you. While looking at almost any promotional brochure or Web site, it's safe to say that most businesses enjoy congratulating themselves on how good they are at serving customers, meeting deadlines and beating the competition. But it's time to move past such self-serving nonsense and analyze the reasons why prospects and customers should do business with you. If it's your expertise, let them know why this is an edge worth acquiring. If it's the quality of your service (that's different from the competition), demonstrate its value. If it's your ability to solve problems, share how you do this.

Although prospects and customers may not have time to go through a rigorous process of analyzing your strengths, they do develop a picture of your company in their minds. It's your job to make sure that image fully reflects the substance of what you offer.

Selling services is neither easier nor more difficult than selling tangibles. Both are demanding and share certain similarities. But selling services presents the additional challenge to enliven -- to make real and meaningful -- concepts and ideas. Success is a matter of mastering the subtleties.

John R. Graham is president of Graham Communications, a Quincy, Massachusetts marketing services and sales consulting firm founded in 1976. Mr. Graham is the author of 203 Ways to be Supremely Successful in the New World Of Selling (Macmillan Spectrum, 1996) and Magnet Marketing: The Ultimate Strategy for Attracting and Holding Customers, published by John Wiley & Sons. Mr. Graham writes for a variety of publications and speaks on business, marketing and sales topics for company and association meetings.

Read about company identity.
Read about customer psychology.
Read about benefits.
Read about cross-selling.

Copyright 1997 John R. Graham. All rights reserved.