Marketing and Services

Var’s and ISV’s are moving towards services in order to compensate for poor margins on products and the question is how can services be marketed in an innovative, effective and attractive way.

Products are tangible, they can be photographed and brochures and advertisements can be compiled using photo’s and a description or specification of the product. The description might include a list of features and benefits and if pricing is not published in the brochure or advertisement, then pricing information is only a phone call away.

Services are intangible, they are produced and consumed at the same time, there is nothing to photograph and services provided are usually negotiated on an individual basis. Pricing is negotiated according to a number of characteristics such as the skill and availability of staff, the service level and duration of the services, how much money is on the table and how demanding the customer is likely to be.

Profitability from services is a question of what services are you going to offer and to whom are you going to offer them. The higher the expertise and the more vital the systems for which the services are to be provided, the higher the potential margins. You may need to undertake research in order to identify the most profitable markets for your services or to identify which services you should, in fact, provide.

The place to start is with existing customers, and the question is ‘What services do our customers want?’ Herein lies a problem in that the majority of Var’s and dealers are so used to having to negotiate the best possible price in order to get product sales that their perception is that customers either have no money, or if they have, they will not spend it. But when it comes to services the external pressures on price are not as severe and customers will pay for services, provided the services keep their systems running reliably.

Many Var’s and Dealers find this shift in pricing policy difficult to cope with. Thus when a customer phones with a problem Support staff assume the customer wants the cheapest fix and do not even bother to offer better alternatives such as upgrades, consultancy, training etc.

He who pays the lowest price will get the poorest service and both the customer and the dealer end up by not thinking much of each other. Where the shift in pricing policy can be achieved it is possible to make good profits from services, even from existing customers. Moreover, once the customer is used to getting quality solutions, and paying for them, they will be happier customers and may even become advocates!

It is of vital importance to differentiate between products and services as early as possible in the sales cycle, so the customer has a clear understanding. Some customer re education is inevitable.

The transition to marketing services is not so difficult. The key to success is to package the services in such away that you can communicate them in more or less the same way as a product. The way to package a service will depend on what services you offer and to whom you offer them. A brochure describing your company, the market you service and their problems, and the services you offer, (not necessarily in that order) can look much like a product brochure. A brochure should be an inviting glossy that people will pick up and read and if it identifies with the problems the reader has, they will respond.

Having gained new leads for the services you offer, no doubt the services will be tailored to meet the customers exact needs. So the brochure or advertisement describing the offer has achieved the aim of generating leads, even if you never actually sell what you offer!

Direct mail campaigns, telephone canvassing campaigns or advertisements, will target the markets you wish to service, will identify with their particular problems and will offer a solution. Indirect offers are just as valid so seminars and open days have their place as do press releases etc.

Most services can be packaged and offered in a similar way as products and as time goes by you will perfect an approach which is most suited to your services and the markets you work in. The success of any campaign is dependant on accurately targeting your market and having a quality offer for which there is a strong demand. Provided those two criteria are met, good quality communications will follow.

 
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