According to a 2022 House of Commons research briefing there were 4.2 million businesses in the services industries in 2022, just over three-quarters of all businesses in the UK.

The biggest of the service industries in terms of the number of businesses was the professional and scientific sector, which at 762,000 firms accounted for 14% of companies. The retail and administrative and support services sectors accounted for 10% and 9% of all businesses, respectively.

Overall, businesses in the service industries accounted for 80% of employment and 72% of total turnover.

So, if you’re running a business that sells a service, you’re in good company.

Examples of service businesses:

teacher

graphic designer

coach

office security

accountant

researcher

physio

hairdresser

electrician

health worker

surveyor

scientist

So, are there differences when we come to selling a service over a product? While many concepts are the same, this article looks at some fundamental issues if you’re trying to sell a service and how you can best overcome them.

What is the difference between a service and a product?

A product is a tangible item you can buy, acquire, and consume, while a service is an intangible item. It is typically derived from the output of one or more individuals. The customer is buying an experience, not a product.

“The customer is buying something they will never own.”

The service will only appear when the customer requires it e.g. going to get your hair cut or being served in a pub. There are some exceptions such as utilities which are generally constantly provided on the basis that they are there whenever a customer needs them.

The Main Issues When Selling a Service

The leap of faith - customers can’t return the service if they don’t like it, they can just choose not to buy again. They have to take the leap of faith that this is the right person/service/company for them. Whether you can get on with your service provider could dictate whether you go back.
Consistency of service - the service will be delivered by individuals - not always the same individuals, so the experience can vary. Take the service you receive from one hairdresser to the next. There is of course a major upside for services here; they can tailor the service for the customer, and they can provide flexibility on the service itself.
Promoting the invisible - how do you promote something you can’t see? How do you communicate to the customer what you are selling and why they should buy it?
Pricing - this is tricky. It’s not a case of the bigger the product the more you can charge. It’s easy to compare two products. Supermarkets do it all the time comparing the same basket of goods. With services price, must be relative to the perceived value.

How to Sell a Service

Many of the fundamental principles of selling are the same – know your customer, understand what their pain points are, and talk to them about how you can solve them. However, there are some specific considerations to succeed.

1. BUILD Relationships

For most services, it’s all about people. The expertise they provide, the experience they give customers, and the outcome they create.

Taking time to build relationships with prospects, so they get to know, like, and trust you is key. They want to know who they are buying from, what expertise you have, and how well can you do the job. Trust builds credibility, which when you don’t have a tangible product needs to be created in other ways.

Your staff are a key here too. In many cases, they are where your customers will experience the service. How are they interacting with customers? What are they saying about the service?

2. Implement Processes and Guidelines

Whilst providing a service can be a great way of being flexible for a customer, it can also lead to inconsistency in delivery.

Having processes, training, and guidelines in place, ensure that no matter who the customer interacts with in your business they will receive the same experience, the same brand values, and the same standard of service.

3. Demonstrating Value Through Your Expertise, Skills, and Time

Unlike a product, where you can what you are getting for your money, demonstrating value for money with a service can be trickier. Building credibility can help to demonstrate value.

Offering a try-before-you-buy approach, or a free consultation gives you a chance to build rapport and demonstrate your credibility.

Customers can also help to demonstrate the value of your service with reviews and referrals.

4. Do Competitor Analysis

Understanding your market and what is out there will not only help you see the gaps and indeed the saturation in the market, but it will also allow you to position your business against the competition. What do you provide that they don’t? How can you support the customer better than them?

So there are some key issues when selling a service and some ways to tackle these, but no matter whether you’re selling a service or product, the most important thing is to know your customers and how you can best serve them.

If you’d like more information on how to your service or to discuss any of these points in more detail, please get in touch.