Defining your services
Selling a loaf of bread is fairly straightforward, we know what it is, what it’s used for and what we do with it.
If you sell a service, especially in a technical field, it can be a lot more challenging.
Productising is a useful tool to define services as a product, making them easier to describe, promote and ultimately to sell.
Learn from the big boys
If you buy a new TV or other home appliances, you’re likely to be offered optional productised services: An installation package, extended warranty or possibly training. In some cases different levels of services are packaged into products, often described like medals; bronze, silver and gold.
By using this approach, levels of services on offer are easy to describe using tables like the one below.
Generating Revenue
As well as making a service easier to sell, it can also improve your top and bottom line. Invoicing for service work ad-hoc is messy, inefficient and as a result sometimes skipped or forgotten. By selling a productised service such as an extended warranty or a service contract, invoicing is once a year (or less) and revenue is regular.
Defining your services
| Bronze | Silver | Gold | |
|---|---|---|---|
| Warranty period | 5 years | 5 years | 5 years |
| Telephone support (Monday to Friday, 9:00 am to 5:00 pm) | Yes | Yes | Yes |
| Telephone support (Monday to Saturday, 8:00 am to 8:00 pm) | No | Yes | Yes |
| Software updates | No | No | Yes |
How to start
It may sound obvious, but a starting point it to write down everything you do for your customers. Here is an example for someone offering IT services, typical work will include;
- Training
- Telephone support
- Repair to hardware
- Loading software and updates
- Security updates
Once listed, you can decide what is offered for each service package or level. Security for example, will all levels but training only with some. Hours can also vary.
Pricing
By defining services as products, it’s easier for you and your customers to see what they are getting. If you are using the approach to sell service contracts, then your customers will try if possible to look at what they have spent in the past. Generally, as they are paying annually, they will expect a discount compared to ad-hoc hourly rates. For you, the benefit is regular income, less paperwork and possibly less invoicing disputes.
Try as much as possible to avoid adding options to your productised services, it adds confusion and complexity, the very things you are trying to overcome. It also makes customers suspicious, the insurance industry being known for this.
Avoid pitfalls
Define your product services thoroughly.
It’s wise to define the maximum hours relating to each service product. Look for high risk activities and try to limit exposure to these. Exclusions are useful, but be reasonable setting these.
Make sure you have the resources in place to deliver what you have promised. In IT fields, collaboration is common to provide cover.
Marketing
Productised services can be marketed just like any other product. Service and support are important factors in most buyers  purchasing decisions, by demonstrating a structured approach, you will look more professional.
Make sure you clearly promote and define your service products on your website and in brochures, be proud of them.
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