Sunday, October 7, 2018

Selling the Invisible Always is Tough

Selling the invisible always is difficult. Some products are intangible,  there being no way the buyer actually can determine “quality” in any direct way, until the services are provided. Legal, medical, financial or other services provide good examples.

Marketing advice, crisis management and other services also are very hard for buyers to evaluate, in advance of purchase. There is no physical object to inspect, so a potential buyer has to try and determine value some other way.

So think about it: all  communications and connectivity services are intangible products, for which a buyer has no way to determine quality in advance of purchase, and no way to compare quality to other potential buyers except to “try them.”

There are some obvious consequences. If a buyer cannot independently determine value or quality, buyers might be prone to distrusting quality claims. Perhaps that is why service providers tend to score low on consumer satisfaction surveys. People might know they have no way of making judgments as they can with physical products. And when “value” cannot be determined, it is hard to determine whether “price” is right, either.

In fact, every connectivity service--video, voice or internet access--scores at the bottom of multi-industry indexes in surveys of customer satisfaction conducted by the American Customer Satisfaction Index.

One might object that all internet apps also are “intangible,” and that is true. Consumer surveys tend to show higher satisfaction with apps than connectivity services.

Make it personal is one typical bit of advice for sellers of intangible services. In other words, explain “how it makes your life better.” “Show the benefits” (outcomes) is another way to sell an intangible product. When even that is tough, sell “peace of mind.”

That's why credentials, furniture, street address, references and "experience" become proxies for value and competence where an intangible product is concerned. Even tangible products such as fashion items or vacation resorts have a huge and similar problem, namely creating a brand or mystique that helps potential buyers evaluate the product, which either is a means to another end, or an "experience."

Trust also is important for selling intangibles.  As there is nothing tangible to show customers, customers have to trust their suppliers. And though it would be hard to show a direct correlation, one element that promotes trust might be that lots of other customers have chosen a particular supplier. So market share becomes a proxy for value and a reason for greater trust.

In his book Selling the Invisible: A Field Guide to Modern Marketing, Harry Beckwith makes the point that an intangible product cannot be sold in the same way as a physical product.

“In fact, a service does not even exist when you buy one,” notes financial analyst Ben Carlson. “If you go so a salon, you cannot see, touch, or try out a haircut before you buy it. You order it. Then you get it.”

Product failure also is harder to determine. Did you get good advice? How a good a job did your painter, dentist or doctor do?

That is unknowable. That is why products can have warranties. There is some way of knowing and quantifying the risk of product failure.

Most services cannot be similarly quantified, with the possible exception of outage or availability performance.

The big point is that customers buy connectivity services that mostly come without guarantees or certainty. So anything suppliers can do to provide proxies for quality should help.

And that is why “brand” reputation matters. Irt is a proxy for quality and a reason for trust. That is why personal relationships matter: they are proxies for quality and reasons for trust.

That is why good storytelling matters.

Companies and people sell themselves, their vision, philosophy and values. Being likable is a prerequisite when the customer has endless choices.

“Prospects do not buy how good you are at what you do. They buy how good you are at who you are,” says Beckwith.

That is why sellers of broadly similar products benefit from “accentuating the trivial.” That might be one of the few ways to differentiate, when products perform in broadly similar ways.

Service businesses are built on promises, it is fair to say. A good brand is synonymous with a firm or person who will fulfill those promises on a consistent basis so you know exactly what you’re getting when you sign up.

Verizon’s brand promise has long been “best network.” So anytime that is challenged, the whole value of the brand is challenged. It really is quite a bit harder to explain what the key brand promise is for the other tier-one service providers.

Comcast’s latest tagline is “the future of awesome.” Comcast customers who have used other major service providers might agree that tagline actually does tend to resonate with user experience.

T-Mobile US says it is the “uncarrier,” with a clear “we are not like the other guys” positioning. Many of T-Mobile US customers might agree.

AT&T changes its tagline every so often, so it is hard to say what the core brand promise happens to be. Sprint also makes changes every now and then. The point is that it is not clear what the brand promise is.  

That arguably is a problem for everyone except Verizon, which has been consistent. And that might illustrate the problem of selling intangible connectivity services. “Best network” is at least a proxy for quality that people understand. I am hard pressed, in most cases, to explain what the value proxies are, where it comes to service providers.

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