I’ve often been told that my focus leans heavily towards product sales and marketing, despite many of our clients and prospects being service companies. As a service company ourselves, we’ve intuitively navigated the nuances of marketing and selling services.

In this series of articles, I will compare B2B buying behaviors for products versus services and suggest ways to adapt your sales and marketing approaches to maximize the results of your efforts and budgets.

As always, let’s first look at things from the Buyer’s perspective...

Buyer’s Perspective

Difference No. 1: Comparison

Products: When buying products, Buyers rely on convenience and the belief that the product will meet their needs.

Products can be compared “apples to apples” based on functionalities, specifications, and user reviews. This straightforward comparison process allows Buyers to make decisions based on concrete, quantifiable data. Buyers often evaluate different options by looking at factors like features, performance, and price.

Additionally, product reviews and ratings from other users provide valuable insights into the product’s performance and reliability, further aiding the decision-making process.

The convenience of purchasing products online, with free trials, quick delivery options, and easy return policies, also plays a significant role in the decision-making process, making it easier and faster for Buyers to complete their purchases.

Services: Buying services, on the other hand, is more subjective and relies heavily on personal or company authority.

Services are harder to compare directly because they often involve intangible elements and personal experiences. The ideas and concepts that the service provider believes in can also influence the Buyer's perception and decision. Clients are often drawn to service providers who align with their values, vision, and business philosophy, as this fosters a stronger sense of connection and collaboration.

The quality of a service can vary greatly depending on numerous factors, such as the provider’s expertise, the level of customer support, and the overall client-provider relationship.

When evaluating a service, Buyers must consider aspects that are not easily measurable, such as the provider's reputation, ideas they believe in, their ability to understand and meet specific needs, and the expected level of customization and personal attention. This makes the decision-making process more complex and nuanced.

Moreover, the decision to purchase a service often hinges on trust in the provider's authority, whether it's a well-established company or an individual expert. Clients are inclined to choose service providers with proven track records, strong references, and a credible presence in their industry.

Personal relationships and professional reputation play a significant role in influencing the Buyer's decision, making authority a crucial factor in service procurement.

Example: Think about purchasing a new car versus hiring a marketing agency. You can easily compare cars based on specs, reviews, and prices. The comparison is straightforward: you look at horsepower, fuel efficiency, safety ratings, and customer reviews. This objective data allows you to make an informed decision based on clear, comparable metrics. Additionally, the convenience of car dealerships and online platforms offering detailed comparisons and reviews further simplifies the buying process.

In contrast, when choosing a marketing agency, you rely on trust in their expertise, built on their self-presentation, the ideas they promote, testimonials, and their current client base. The decision involves assessing their ability to understand your business needs, the creativity of their campaigns, and their track record of delivering results. Personal interactions, case studies, and recommendations from other clients play a crucial role in forming your opinion.

The process is less about comparing specific features and more about evaluating the potential relationship and the intangible value the agency can bring to your business.

Difference No. 2: Risk

Products: Purchasing products typically involves lower risk.

Physical products often come with warranties and return policies, providing Buyers with a safety net in case the product fails to meet expectations. Even in the digital sphere of Software as a Service (SaaS) products, vendors commonly offer free trials or freemium options, allowing users to evaluate the product before committing financially. Furthermore, cancellation is usually straightforward, limiting the Buyer's exposure to a few months of license expenses at most.

Services: Conversely, acquiring services brings a higher level of risk for the Buyer.

As we mentioned already, unlike products, services are intangible and subjective, making it challenging for Buyers to gauge their quality upfront. It also takes longer to determine if the decision was correct, and the subjective nature of the assessment adds another layer of complexity to the risk evaluation. It also highly depends on the expectations set during the buying process.

Example: Consider the decision to engage a software development company for a new project. While purchasing a physical product like a laptop comes with clear specifications and performance metrics, evaluating the quality of software development services is less straightforward. Assessing these variables demands thorough research and due diligence to mitigate the risks inherent in the investment in software development services.

Difference No. 3: Compelling Event

Products: Buyers of products can be influenced into making a purchase.

External factors such as promotions, discounts, or limited-time offers can prompt Buyers to make a decision quickly. For example, a great offer on a specific car model can persuade a Buyer to make a purchase immediately instead of waiting. Marketing tactics and persuasive messaging from the seller can play a crucial role in influencing Buyer behavior and expediting the decision-making process.

Services: In contrast, the compelling event for purchasing services is almost always initiated by the Buyer, with minimal influence from the service provider.

Convincing a Buyer to switch service providers, such as marketing agencies or corporate lawyers, is much more challenging unless a significant event occurs, such as dissatisfaction with the current provider or a change in business circumstances.

Additionally, Buyers of services rarely sign contracts before they are ready to start the project, as the timing and readiness of the Buyer are critical factors in the decision-making process. Service providers must focus on building their authority and being available when the Buyer is prepared to engage, rather than attempting to influence the timing of the purchase.

Example: Consider the decision to hire a marketing agency for a new campaign. While a limited-time discount on a product may prompt immediate action from a Buyer, persuading a client to switch or hire a new marketing agency requires more than just a compelling offer. It often requires a significant event, such as a decline in marketing performance or a shift in business strategy, to prompt a Buyer to consider alternative service providers. Service providers must focus on building long-term relationships, demonstrating expertise, and being available to meet the Buyer's needs when the time is right.

Difference No. 4: Speed of the Buying Decision

Products: Buying products typically involves a quicker decision-making process.

Once a Buyer is motivated to make a purchase, the transaction often occurs promptly. This immediacy primarily pertains to the period between the identification of a compelling event and the actual purchase, excluding the time spent researching and deliberating prior to this event.

Services: The decision-making process for services extends longer.

The duration of the decision-making process is influenced by various factors, including the complexity and length of the service being procured. For instance, scheduling a haircut is typically a quick decision once the need arises. Even in the case of relocating to a new area, buyers are likely to select a hairstylist promptly, knowing they can easily switch if dissatisfied. However, evaluating offers for services like software development may span several months. Buyers may not actively research service providers until the need arises, resulting in a lengthier evaluation period.

Moreover, the evaluation process for services is more intensive. Buyers must assess factors such as expertise, reputation, and alignment with their specific needs, necessitating thorough research and consideration. Unlike products, where features and specifications can be comparatively assessed, services entail more subjective considerations that contribute to the extended decision-making timeline.

Example: Consider a buyer seeking software development services for a new project. While a swift decision may be made for a product purchase, such as a car, selecting a software development company entails a more intricate and time-consuming evaluation process. The buyer must meticulously assess factors such as the company's technical capabilities, past projects, and compatibility with their project requirements. This extended evaluation period is characteristic of services, where the stakes are higher, and the decision demands careful consideration.

Conclusion

Understanding the nuances of buying behaviors for products versus services is essential for crafting effective sales and marketing strategies.

I hope, that considering the factors discussed from the buyer's perspective, will help you tailor your approaches to better meet the needs and expectations of your future Buyers!

In Part 2 of this series, we will delve deeper into the specifics of selling services, exploring actionable strategies and best practices for service-based businesses.

Stay tuned for practical insights and expert advice to enhance your sales and marketing efforts in the dynamic landscape of service-oriented industries!

Until then, keep exploring, learning, and adapting to the evolving needs of your clients!