What You Need To Know About Selling Services to School Administrators: Part 2
7 Jul, 2017
Part Two: Tapping the Future: Creating Your New Value Proposition
Four Characteristics Distinguish Selling Services from Selling Products
Part one of this two-part article set the stage for your strategic response to a major paradigm shift in the education market. Huge changes are being driven by the growing impact of free products. I made the point that you may be blinded to this huge change or not understand its potential to reorder our industry. I suggested, in part one, why now is the time you should consider a strategy around learning services — a range of offerings that could add value and growth opportunities for your company.
Part two gets specific in laying out the basic concepts and strategies for services businesses. I've provided an outline for you to work through. Let's begin with the basic differences between product and services sales.
Services are an Intangible Promise of Value. Selling physical products like books, computers, interactive whiteboards, learning kits — anything packaged — has intrinsic value. For about ten years, I sold Apple products to school administrators. Like most Americans, I buy and love Apple products. Every iPad is the same wonderful product in the same beautiful box, regardless of where you buy it. The buying experience is quickly forgotten after you open the box and hold your glistening new device. Selling services is a different proposition because the salesperson is promising value that the buyer can't see or touch. Buyers of services don't know what they are going to end up with and that makes articulating the value of a service a challenge quite different than explaining the value of a product.
Your People are the Product. When someone buys services from you, they're putting their trust in you. You, your intellectual property and your behavior are your product. Your body is the packaging.
You Can't Ensure Consistency. No matter how much you try to control the quality of your service, it varies. How customers experience your company and your services will vary. Humans with different looks, personalities, and skills will provide the services. There will be differences in the experience even when your customers always deal with the same person. We all have good days and bad days. We all interact with other humans differently depending on a range of factors, especially how other humans interact with us!
It's Tough to Manage Supply and Demand. We keep an inventory of physical products. If you have manufacturing experience or come from a retail or distribution background, you know that managing product inventory is no easy task. But managing inventory of human capital is many times more difficult. There is no quick or easy way to ramp up when demands for your service increase and no easy way to ramp down when demand for your service shrinks.
How to Brand and Position Your Learning Services
Now let's look from the marketing angle. When developing products, your choice of logo, package design, colors and fonts used in collateral — even the style, size and shape of your product — take center stage for brand managers. The brand focus is around the 'see, touch and feel' attributes. When you are selling services, these brand elements are still important, but your brand and your company position is driven more by the quality of the experience dealing with your people than it is by visual branding elements. A service brand is created when outsiders interact with your company. The ease of the interface on your web site, prompts on your phone answering system, the responsiveness of your sales staff, the knowledge of your support team — everything about the experience creates your brand. Likewise, brand awareness and branding for services is less about advertising than it is about the consistency of human outreach. Seth Godin, best-selling author and marketing guru, has a branding formula that I think is relevant to your strategy. Seth says Branding = Prediction of what to expect X emotional power of that expectation.
What's more, to build a strong services brand and associated competitive position, service providers need both internal and interactive marketing with greater intensity than companies that sell physical products. The term "internal marketing" is one you rarely hear among the employees and managers of companies focused on selling physical products. Internal marketing is a concept that is off the radar screen. What is internal marketing and why is it so important to your success in selling services?
Services "Internal Marketing" Improves Consistency of Customer Experience
Internal marketing is all about overcoming the biggest challenge you'll face when selling services to schools: delivering a consistently high quality customer experience. For product-oriented companies, the goal is to deliver products with no defects. Automation makes that goal attainable. Service organizations, on the other hand, rely on human product, not robots. There must be an intense customer orientation to minimize inconsistencies and performance defects. You have to have systems in place to monitor the customer experience. Teamwork becomes an essential success factor. You have to be sure your staff is on board, along with anyone else who comes in contact with your customers. If you have channel partners, they need to behave like one of your own — in essence, third parties who represent you in any way need to be "internalized." If you are not confident about that possibility, you may need to reconsider your channel strategy.
The HR function in a services organization becomes the product management function. Understanding the value your customer expect from your people, careful recruiting and hiring, ongoing training, motivation and reward for employees are required to motivate consistent quality of the human product (a.k.a. service) not to focus on revenue from sales. Internal marketing has the ultimate goal of consistency in the quality of service delivery and the associated positive customer experience.
“Interactive Marketing" Is a Competitive Factor for Selling Services to Schools
The other "i" that is part of the service sales imperative is interactive marketing. Today, most of us associate the term "interactive marketing" with social media and the use of marketing channels that provide two-way dialogue. Yes, proper development of those channels is really important to your success. But the "i" that I'm referring to is something different, a critical competitive success factor for a services business. It's how prospects and customers feel after they interact with anyone on your staff: how you respond to customers and prospects after you speak to them; how you follow-up on your commitments. There are three dimensions to interactive marketing you need to embrace and internalize if you want to be a leader in providing learning services to K-12 schools:
Differentiate Your Interactions From Your Competitors. To be a leader in selling services, you must successfully differentiate the features of your service offering, like you do with products. But more important than having different features is that you have different and better interactions with your prospects and customers. When your prospects and customers experience a positive difference in the interactions they have with your company (any aspect of them) you are able to charge higher fees and improve your margins. Service margins come under pressure when prospects don't feel a positive difference in how they are treated by your staff compared to your competition, and when they don't see a difference in how your employees treat each other. Service margins grow as you deliver something unique (as a team) that translates into a meaningful competitive difference. Superior delivery interaction means every experience is memorable in a positive way. Your service should not just be good, it must be great -- so great, so unexpected that your prospects and customers recommend you based on the difference they feel. You have to find ways to get the "Wow" factor into that experience that is an appeal to their emotive reason for purchase. You can (and I recommend that you do) reinforce this difference and the appeal by incorporating service-oriented images into your logo, your ads, your web site, your sales pitch, your attire - everything. But all of those brand elements have meaning only when the human aspect confirms it and delivers on the brand. You really have to design these experience surprises into your marketing plan and invest in them.
Constantly Improve Your Quality of Service (QOS). There are specific steps you can take to make ongoing improvements in QOS. You must put processes and systems in place to track customer satisfaction. You might designate a QOS officer — a watchdog — whose responsibility it is to manage ongoing improvements to the quality of service you are providing. Importantly, you must empower everyone in your organization to keep prospects and customers happy and to address every issue (no matter how minor it may seem) quickly and with a great attitude. I'm talking about everyone, from the CEO down to the person who answers the phone, must have a customer orientation; I mean everyone, no exceptions. A “whatever it takes to keep customer happy” policy is what you need to have. Your goal should not be excellent service – AMAZINGLY GREAT service should be your mantra! You should reward employees for ideas that will differentiate your customer experience from your competitors and recognize them often and significantly when they follow through.
Strive for Ongoing and Relentless Increase in Productivity. In product-centric organizations, success and productivity is measured in dollars. Everyone in a product-oriented company, to some extent, is working on a sales quota and revenue is king. For many years when I was selling computers or boxed software to schools, I was called a "box mover." That nickname, not especially flattering, is sometimes given to people who work for product-centric companies. The goal for a box mover is to put inventory into the warehouse of buyers at all costs. The marketing function is focused on creating price-oriented promotions and generating leads to turn inventory. When I've had sales management positions for product companies, my job and my primary responsibility was moving product, driving revenue and pushing deals through the pipeline, with an intense focus on achieving a sales quota — not much else mattered. Customer service was good, for sure, but often lip service compared to the push for sales. By contrast, great leaders of service-centric organizations have a focus on driving efficiency and eliminating bottlenecks with client interactions, the measures of productivity for successful service companies. There is a focus on effective use of technology to streamline processes that impact the customer experience. Policies and the compensation program enable and encourage everyone in the organization to interact quickly and get things done faster for the customer. The standard productivity measure for a product-centered company is revenue per employee. But for companies that will lead the new learning services segment, productivity will be measured by metrics related to improvement of service delivery, that is, the quality of the interactions with people and customer satisfaction. Why? Because better interactions boost customer loyalty and referrals, drive more revenue, build higher profits, and create commanding market share! The financial results of superior service delivery come with — and only with — the customer-centric view and related focus on a highly differentiated and amazingly excellent customer experience.
You Don't Have to Throw the Baby Out With the Bathwater!
In closing, you may have come to the conclusion that I'm advocating you abandon sales of your products and quickly reorient yourself to selling services. I can assure you, that's not the message I hope to get across. There will always be a place for products that we pay for and real value to be had from them. I don't know your specific situation or how vulnerable you are to having your lifeblood drained by competition from free products. What I can say, however, is that starting to charge for a service that you have always been giving away is not at all what I'm hoping you will walk away with. That's not a strategy, it's a tactic. Like any strategy formulation, you have to begin with an honest reassessment of your value proposition and then determine how, when, and by what method you can add value independent of product features. This will require you to take a hard look at every aspect of your business and to view all of it in the context of where the education industry is headed. Like it or not, change is here like we've never experienced before. Adapt or die, that old saying, has never been more true. And we might have to wonder about another old saying, "There's no such thing as a free lunch!" Well, maybe...
Glen McCandless is president of Focus Marketing Inc., a business development firm that specializes in the educational technology market. Glen has over 25 years of experience helping companies efficiently and effectively sell and market technology products and services to K-12 and higher education buyers. For more information, please contact firstname.lastname@example.org.