Selling Services versus Products

The degree to which a business must develop a relationship with the end user is based on the complexity of a service and its uniqueness. Think of it as a sliding scale of relationship building effort: On the lower end you're selling 10,000 glass beakers; on the upper end, you're selling the computer system that will support the Social Security Administration.

Services are inherently more difficult to sell because they are essentially invisible. A service company must convince the buyer that it understands the buyer's problem and has a practical solution to the problem. Selling services and integrated solutions usually requires lengthy, intense, and costly direct sales efforts. Sales are generally closed using a multiple-vendor contract or a public bid.

Public bids for services are usually posted in the form of a Request for Proposal. Responding to the Request for Proposal requires that bidders write an extensive and lengthy proposal and then have the hand truck and rented van necessary to deliver the 1,000 to 100,000 pages of proposal material required to paper the government's procurement trail.


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