As a business owner, good and mindful marketing is the absolute key to success. But all marketing is not created equal. Whether you’re offering tangible products to the world, services, or both, you’ll need a marketing strategy that caters efficiently to each—especially since selling products versus selling services are both entirely different beasts.
First, it helps to define what exactly each one of these two sellable items is and what makes them so different. When you are selling a product, you’re selling something that consumers can obviously touch, therefore physical demands apply here that don’t with selling a service. When you’re marketing a service to the masses, you are selling something completely intangible: you’re selling a relationship, and sometimes this can prove to be more trying than hardships associated with selling tangible products. On the same token as challenges, however, both product and service selling offer some pretty fantastic benefits as well, from customization to longevity of quality. Let’s take a broken down look at both of these business ventures and how pertinent it is to choose the right one that packs the best impact for your business.
MARKETING A PRODUCT
Selling a product is the age-old way of doing business, and for small business owners and entrepreneurs, selling palpable products still harbors original and new challenges and benefits alike. No matter what product you’re offering to consumers, you can be sure that investing money into supply will most likely come before the actual sale. Being prepared, organized, and an apt forecaster for the future of business are top traits to have as a business owner selling products—and that’s not always so easy to come by. But at the end of the day, a good product can be marketed successfully, and fully understanding the pros and cons of what it takes to do this can be truly fortuitous for your business.
BENEFITS OF MARKETING A PRODUCT: Marketing a product comes with loads of benefits, especially if your marketing strategy itself is on point. We’ll use the example of a product being a book to better illustrate the needs of fruitful selling.
• Versatility: When marketing your book, you have the option of offering both physical and digital material. This can go a long way with sending samples and discounts out to your current or sought after customers. Through email blasts, you can send samples of your book, and more specifically, coupon codes and alerts on specials going on with your product offers. This can also be done with a variety of media outlets like Facebook, Instagram, Twitter, and Pinterest.
• Creative Cost Cuts: The reason that you want to utilize digital media for marketing samples or coupons for your product is because it saves you from eating up front costs. Giveaways are an even better way to do this, as you market tons of exposure for your brand while really only paying the cost of the giveaway to the winner.
• Trust: Consumers tend to trust what they know, and selling a product is a business practice that has been around for centuries. Consumers understand the general process and are comfortable with it. This is an advantage that service sellers simply don’t have. Being able to give your customers a product they can see and touch can make all the difference when it comes to ease of marketing successfully. Following through with delivering a good product to your customers is entirely dependent on you, but it sure makes for a great start when you can hit the ground running with a trusting audience.
• Imagery: People respond quickly to what they see and another advantage you have over service sellers is that you always have something to show your potential customers. From websites to purchase pages to billboards to TV spots, there are tons of different avenues that you can showcase photos and videos from every angle. Once you have satisfied customers, free marketing from those happy consumers come into play, as they will begin to use social media to post their own photos and videos of your product.
• Niche: When marketing a product, you have the ability to zero in on particular niches of consumers. For instance, let’s say you’re selling a children’s book. Obviously, you know to hone in on the sector of parents to young children and elementary school libraries most specifically. By being able to target a specific group of customers, you don’t waste precious resources or dollars on unsuccessful selling strategies. In short, by marketing to your niche, you guarantee yourself success.
CHALLENGES OF MARKETING A PRODUCT: Attempting to market physical products in a high-tech, smartphone kind of world can be a big mountain to climb, and at times, an unforeseeable uphill battle that you just can’t seem to win.
• Up Front Costs: Inventory and forecasting the future of your products is costly, no matter how you look at it, and it’s completely necessary. Not only is this a financial investment when talking about keeping inventory always on hand, but it gets more expensive when referring to events and third-party stores. Say you have a book signing or a talk. You’ll need to invest in an inventory of books to have with you for these events and all you can do is give the best educated guess when deciding the amount of inventory to order. More times than not, you’ll leave taking some of that unsold inventory back. Likewise with other venues, such as bookstores, many times you won’t get paid in full for your product until all inventory is sold. Even then, you run the risk of not selling out and therefore losing on any profit. Risks are a given when being an entrepreneur, but costly risks can sink your ship fast.
•Distribution Channels: Otherwise known as your third-party sellers, distribution channels can be tricky for product sellers in the loud, somewhat chaotic world of advanced technology. The biggest part of a marketing strategy for selling a product first comes with selling it to reputable distribution channels. This daunting task is a bigger hurdle for the classic selling of products now more than ever before because to many big box stores, why invest in unsold inventory when there are usually so many viable alternative options available in the form of on-demand and digital property? For instance, with our example of book products: a big box store is less likely to invest in half the books it used to when online retailers like amazon.com are offering kindle and print on demand editions that sell twice as many, twice as fast. Unfortunately, this is the reality of our current world and depending on exactly what physical product you’re selling, sometimes this can be a losing battle.
• Gambling with Market Strategy: With the cost of marketing lumped on to product associated goods, you have to come up with the best marketing plan you can—and there isn’t much room to fail. Any market strategy is a gamble, but you have to be sure as a product seller that you make your risks small, because when a marketing strategy fails, you always take a pretty big financial hit in the process.
• Storage and Manufacturing: Even once you manage to set up an organized space for manufacturing and storing your inventory, the beginning is always tough. A closet in your home or a garage might be a good start, but what happens when your company grows? Planning for costs on a successful business to widen your space can be difficult and sometimes success comes along faster than we expected.
MARKETING A SERVICE
Marketing a service is a bit more complex than selling material products. When you’re providing a service, without something that the consumer can physically touch, selling yourself can be slightly more difficult. You’re selling a bond and a trusted connection, and to do this takes experience and backing to gain experience and backing. Like business owners who sell physical products, you’ll have to be savvy enough to forecast sales—but an advantage you have is that no upfront costs on physical goods is necessary so this can really be a financial well for you as you’re learning how to best market your service.
BENEFITS OF MARKETING A SERVICE: Marketing a service comes with a wide array of empowering entrepreneurial benefits. Today’s technology is on the side of service sellers and there are no boundaries when it comes to being a global success.
• Exponentially Lower Costs: One of the biggest benefits of selling a service over a physical product is the cost. With no materials needed to be made or preordered to create a stock, selling a service slashes all the financial investment associated with physical goods by a substantial amount.
• Customization: Whether you’re a consultant or a coach, when you market a service, you have a huge advantage in that you can customize services specifically to what your customers want or need. And this doesn’t just ring true with the services themselves—it also falls into that same line when it comes to the price. Customizing the specific services to the market trend’s needs ensures that you can also market your services at a price point that fits your own business needs and at the same time, models the pricing that customers will pay.
• Competitive Set Upperhand: Furthermore snowballing off of the customization advantage is the great upperhand you have at competitive service and pricing. Customizing services and pricing isn’t just about catering to requests from your customers. It’s also being the most competitive within your industry against other sellers of the same services. In general, this is one of the best things about being a business owner, as with no big corporation to answer to, you decide price points and you decide how aggressive you need to be when it comes to staying competitive within your industry. For service sellers, staying competitive particularly within pricing is much easier to do than it is for product sellers, as your upfront physical costs are slim to none. This allows you to offer any type of service—from coaching to classes to even the amount of trial period time—for whatever price set that helps you to trump the competition.
• Word of Mouth & Repeat Customers: Yes, it may be a challenge and a bit of a long road to gather up repeat customers and positive reviews, but once you do, this is a monumental asset of selling a service that will make your company explode with success. Word of mouth has always been and still is possibly the strongest way of marketing there is in this world and securing yourself a handful of happy, repeat customers is the sure way to get this “six degrees of separation” ball rolling. Satisfied repeating customers will become your bread and butter as a foundation for a successful brand. Always remember this when it can seem challenging finding these customers in the beginning. If you stay patient, friendly, flexible, and consistently provide good work, you’ll wake up one morning with more business than you know what to do with.
• Limitless Reach: Another wonderful fact about marketing and selling a service is that there are no bounds when it comes to where or who your customers are. With the amazing advancement of today’s technology, you can sell digital copies of ebooks, a coaching session, or a consulting training seminar to someone across the world from you, no matter what time of day or night it is.
CHALLENGES OF MARKETING A SERVICE: What you save financially by not having the physical product costs to worry about, you find equal hardship in marketing your services in the first place.
• Marketing the Intangible—Trust: When you offer something that no one can touch, you have to market an idea, a rapport, and lots of times, free work in the form of a preliminary, “good faith” amount of time. You need customers to gain more customers, and this perhaps is one of the hardest types of sales to market. To reel consumers in to want to invest in your brand and your service, it is imperative that you gather up positive reviews and classic recommendations to give a solid backing to your craft.
• The Taboo of New: Another challenge you’ll run into when marketing a service is the virtual newness of the entire concept. Selling intangible services such as life coaching or holistic practitioner-ing only came into fruition around 1980 and though that was over thirty years ago, when compared side by side to actual product marketing, it’s still a somewhat fresh idea. While selling services is without a doubt gaining momentum now, it can still take potential customers a bit to warm up to the idea. Some don’t trust the selling of a service at all and sometimes, you won’t be able to sway certain people to your brand mindset. This makes for quite a big challenge when trying to market a service, as the whole idea of selling a service in itself can really be against you in the first place.
• Returns: It’s a common known rule in business that you won’t please everyone. However, when you’re selling a service opposed to a product, you’re putting in time and energy into something on an intellectual level. If the customer isn’t satisfied, you won’t be able to get your time and energy back as if you could selling physical products. And for your business, that time and energy lost is money practically flying out the window.
• Niche: Just as this is a good marketing play for a physical product seller, it’s not as easy for someone in the business of services. When you sell a service, you can develop a sense for who your target market is, but more often than not, that’s an extremely gray area. Say you’re a life coach. Who is your niche? Everyone is in that possible pool to be a customer. What if you offer training seminars on entrepreneurship? You could say that specifically entrepreneurs are your niche, but that world has no face, name, or age. Again, it’s the whole world you’re selling to. While this can sound like a lovely “problem” to have in being able to sell your services to any and every person, it turns out to be more of a challenge. When you have no niche to focus on, it becomes increasingly difficult to come up with an effective market strategy, as you have no specific sector to target.
• A Bad Rap: When selling an invisible service, you’ll run into plenty of “haters”—aka, people who completely disregard your services by using general and quite damaging labels. When everything is a hashtag or handle, the last thing you want is a #stupid #irrelevant #scam label beside your company name. You’ll have to anticipate this not only early on in your service business ventures, but throughout its lifespan. It’s just part of the deal. What’s worse is that you can’t exactly offer a free sample of something to put in a “hater’s” hands, and if they deem your service #irrelevant, then they wouldn’t take an offer to try it out anyway. Most times, you can’t fix situations like these and all you can really do is creative damage control in the form of overshadowing the “haters” with people who really love what you’re selling.
• Diminishing Demand: Everything has a shelf-life, and unlike product sellers, restocking a new service on that shelf isn’t so easy. What will you do if/when your service falls out of demand? It’s important to be brutally honest with yourself when it comes to this inevitable part of business and to be flexible with what services you can offer. If you can’t adapt, then your business won’t survive.
WHICH ONE IS RIGHT FOR YOU?
From a marketing standpoint, it seems like the two options of selling a physical product or an untouchable service are pretty balanced when it comes to the advantages and disadvantages. As a small business owner, only you can decide what best fits the needs of what it takes to make your business successful. Maybe the appeal of limited, up front costs and hustle for good word of mouth is exactly within your skillset. Or, maybe the workings of a more traditional way of business in selling tangible products fits your business model. Or just maybe, you can somehow incorporate both selling points within your business and reign the best of both worlds. Either way, being a successful entrepreneur is directly connected to your knowledge of what works and what doesn’t for your ultimate, overall prosperity.