March 7, 2021

How Service Businesses can Sell Online

Dr Peter Mowforth

I give a lot of talks on ecommerce to mixed business audiences. These talks include explaining all the compelling reasons why businesses should be selling online. Afterwards, attendees ask questions. One of those most commonly asked is “but I sell a service, so how can I use ecommerce”?Before diving into potential answers and solutions, we need clarification around definitions.

What’s the difference between Services and Products?

A couple of helpful definitions for services are:

  1. A valuable action, deed, or effort performed to satisfy a need or to fulfil a demand”, and
  2. Intangible products such as accounting, banking, cleaning, consultancy, education, insurance, expertise, medical treatment, or transportation”.

Helpful distinguishing points about services are that:“No transfer of possession or ownership takes place when services are sold, and they (1) cannot be stored or transported, (2) are instantly perishable, and (3) come into existence at the time they are bought and consumed”.Products are much easier to define. They are things you can put in a box, have a unique name, description and price and can sell through sites like Amazon or eBay. They can be marketed and promoted on websites such as Google shopping.Some items are clearly services (getting personal medical advice from a Doctor or having the office cleaned) while others are obviously products (a pair of socks or some rolls of wallpaper).

Examples of the Services sold online as products

There are plenty of examples of how traditional service businesses have done this. For example:

  • Musicians have made their live music available for download following payment.
  • Traditional training companies have made training videos of their courses and then offered these for paid download.
  • Tourism and accommodation businesses allow bookings to be made over the internet.
  • Traditional event organisers have packaged the event and made tickets with payments available online.
  • Almost all forms of travel from car-hire to air tickets can now be booked online.
  • Insurance and related companies offer packaged services for sale online.

The Product Service Spectrum

The simple binary definition of ‘a product’ or ‘a service’ can get blurred. In practice, there is a spectrum between the two where some products can become more service-like such as renting a car instead of buying one. Equally, some services can become increasingly product-like such as using Computer Based Training rather than face-to-face skills tutoring.Because products tend to be standardised, they increasingly carry unique identifiers. These unique identifiers have names such as GTIN, EAN, ISBN etc. A review of these can be found in the post GTIN’s and how to use them. These unique identifiers, with content defined by ‘manufacturers’, help customers to be confident that they are buying what they think they are buying. They are also used by sites such as Google Shopping to help customers compare prices offered from different suppliers. Sites like Amazon use them to help ensure that the product is what it says it is and to share manufacturers descriptions.Train tickets, a license to Photoshop, a downloaded piece of music or a hot air balloon ride may be seen as products but can also be viewed as a packaged service. The earlier definition of the buyer ‘not owning’ what they have bought comes into play.

Pure services tend to be qualitative and the quality of what you get is exclusively down to the quality of an individual supplier. Because they are standardised, products are uniform and should be supplier agnostic.Unless buyers know and trust you as a supplier then the quality of service you offer can only be determined by whatever trust marks, accreditations or testimonials you carry.

How to make your service more product like

To make your service more productised, try to fulfill as many of the following as possible:

  • To make your service more product-like, give it a name that sounds like a product. For example, if your service business is cutting hedges then consider giving the product a brand name such as “Hedgeclip+”.
  • Provide a precise and detailed description/specification of exactly what the customer will get. Providing ‘product’ photos and videos can help clarify what will be delivered.
  • Provide a fixed price and, where appropriate, a clear timetable for delivery.
  • If the service has variable parameters then clarify exactly what those are. With the hedge clipping business, say that it costs so much per metre. Given that there are different sizes of hedge, provide categories with examples.
  • Put yourself in the mind of the buyer and think of all the questions they might want answered - and answer them in the product description.
  • Offer a guarantee or, where appropriate, something equivalent to a returns policy.
  • To help instill trust in what you offer, provide testimonials from customers who have bought specific products.

If you want some ideas about how to market something that you want to be increasingly seen as being more product-like then look at an ecommerce product page such as here. Look at how the marketing messages are presented and use that to help market and sell from your own business.An alternative approach to productisation might be to leave the services as they are and come up with a related item that you can sell as a product. The related product should be one that helps promote and sell your existing services.Customers want certainty when they pay money for something. If you can become more productised then it’s highly likely that you will be able to increase your sales while reducing complaints that result from false customer expectations. Most importantly of all, making your business ever-more product-based will allow you to scale what you do by delivering standardised items. Whatever it is that your business does, the inevitable consequence of productising your services will be to create increased levels of growth and success.

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