Value of a Service

Posted: April 17, 2008 in Business Advice, customers, Marketing, Small Business
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Its been said many times before – People understand the cost of a product more easily than the cost of a service. Any consultant will tell you Its easier to sell something you can touch, feel and hold – than it is an intangable service.

This is NOT always true – and buy studying the exceptions new insight can be gained.

Service Insight One: Getting the product to your door is a service – and one that is tangeable enough that people have no problem paying for it.

Now before you flood me with gripes about the cost of parcel delivery consider this: People will pay more for a CD purchased in a store – than one purchased online. The only difference is distribution cost. People will pay more for a book than an ebook. Small town stores can charge more for a product and point to higher transport costs.  Big Box Retailers frequently charge a ‘delivery fee’ that gets no objection – even after a vigorous haggling over the cost of the goods.

Service Insight Two: Fashion (Hair, cosmetic, skin treatments, Nails etc)  Looking good has never been cheaper. Even a modest income can support a wardrobe of clothes and accessories of a quality unobtainable by Royalty a few hundred years ago. Fashionably ‘cool’ labels cost. Sought after hair-stylists cost. Cosmetics and cosmetic surgery cost – but they are all services. What makes it easy for anyone to spot the difference between top fashion and not fashion? And why is it not so easy to spot the difference in quality of service say between the geeky kid next door and an IT professional to the point most of us would risk the kid in preference to the professional – all the while thinking about the cost difference – which is probably about that of a fashionable haircut?

So its not all services that are hard to perceive as valuable – how about yours? How do you inherently build in the perception of value?

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Comments
  1. Judy Dunn says:

    This is a great question. And when you are dealing with ideas and information, as our business does, the service might at first glance appear to be intangible.

    But we are marketing the gathering and combing through of immense amounts of information, analyzing, translating it for the solopreneur and packaging it in a monthly set of activities and strategies. THAT is the value…and because time is such a precious resource, the added value is saving our subscribers the time it would take to sort through it all. When they see the value of that, they are sold.

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