How to package intangible services and why you should

It’s pretty difficult to get someone to buy something they can’t see or try on in advance. And yet more and more small businesses find themselves selling intangible services. By intangible services we typically mean business consulting, but these services can also include personal coaching, insurance, public relations or even tax advice.

Because there are no “dressing rooms” for consulting services, the most important ingredient in selling them is trust.

How do we get the prospective buyer to trust the seller on something more than just blind faith? How do you get that trust going with someone who has never met you?

Related: How to use digital content marketing to grow awareness, trust and sales

Use branding to package intangible services

One way to sell these services more effectively is to associate your business or yourself with an already known brand. The brand then becomes the promise to a buyer that the service will be of predictable quality.

That’s what brands are for — making consumers comfortable with purchases.

 

A great example of this is H&R Block, whose tax preparation services are easy to sell because people know and trust their brand.

Once you have been in business for a while, you can leave the famous brand that got you where you are and go out on your own to maximize your income. That’s what happens in the real estate industry, where trust is acquired through brand: “I’m a real estate agent with Coldwell Banker,” but also through an association with a professional organization. Real estate services are easy to buy from someone who belongs to the National Association of Realtors (NAR), even if the brokerage is unfamiliar. The association’s logo, familiar to home buyers nationally, helps a potential buyer of real estate services trust an individual who might be a total stranger.

That’s why after a few years of success, some real estate agents leave the big brands and take their business with them. They can share a larger part of the commission if they don’t have to pay something back to the brand — but this is a decades-long process.

Offer a package deal

Intangible Services Package

The brand and the professional organization are two familiar ways to “package” intangible services. We’re not talking about boxes and labels here, we’re talking about selling services in a group or within a framework.

Packaging is the best way to sell intangible services, so skittish buyers can either feel like they’re getting a bargain, or at least getting something predictable.

Buyers do not like financial or quality surprises.

But if you don’t have a known brand behind you or a license from a professional organization like the NAR, you can do your own packaging.

For example, my dog trainer sells a package of 10 dog training lessons for $1,500. Before you sign up, he offers a free demo with his own dog so you can see how a trained dog should behave. He explains that 10 lessons is what it takes to train the average dog, and he doesn’t sell one-off lessons. Amazingly, it is an easier “sell” to offer the lessons as a package than to offer them separately. A package of services for $1,500 sounds more acceptable to a buyer than paying a dog trainer $150 an hour.

Why?

Because this package price qualifies his clientele from the beginning of the sales cycle.

 

He is selling to people who value a trained dog and are willing to spend some money on what are perceived as expensive services. This is luxury packaging: a high hourly rate and a fairly big commitment. It’s a positioning tool for my trainer, who studied with Cesar Millan.

Look at the difference between my trainer and PetSmart, which offers these packages:

  • 30-minute session: $35
  • (4 pack) 30-min. sessions: $120 (save $20!)
  • (8 pack) 30-min. sessions: $200 (save $80!)

PetSmart took the bargain positioning with its package of similar services. PetSmart does offer individual sessions, but makes them costly enough to make the cost-conscious person opt for a package. You’d be foolish not to.

Packages are also more predictable for the seller.

 

Someone who signs up for either package is making a commitment they’ll probably fulfill, and they’ll end up with a trained dog. Their trained dog is then a brand ambassador for the trainer and can be used to generate referrals. Also, packaging takes away the distress associated with billing by the hour and having to justify hourly rates.

Related: How to price products so they sell and you profit

Generate steady income

Intangible Services Income
Photo: Mathieu Turle on Unsplash

Even lawyers are moving away from hourly rates to packaged services. Many firms now have a fixed price for common items like divorce without children, bankruptcy or incorporating a new business. Buyers, for some reason, hate hourly rates.

And especially important for the consultant, a package creates predictable income. You don’t have to wait for someone to come in for a one-off session. You have transparency into both your income and your workload.

Consultants who don’t package their services seem to get all their work at once and can live a lifetime of feast or famine.

Those who sell packages know when to say no to potential work.

Related: Entrepreneurs, make sure you get paid. Here’s how.

Use tools and frameworks to package intangible services

Let’s talk for a moment about life coaching, one of the most intangible services on the market. In order to get people to buy life-coaching services, many coaches align themselves with tests and tools. Packaging the coaching with a proven method allows the customer to feel that the service is tied to something externally validated, rather than simply relying on the coach’s ability to give good advice.

Another popular form of packaging is the “framework.” Large consulting firms rely on “frameworks” to package their intangible services. Harvard’s Extension School has a list of six frameworks used by large firms that smaller consulting businesses can borrow. These include benchmarking, the growth share matrix and Michael Porter’s Five Forces. Each of these well-known frameworks is just a way of making it easier to sell intangible services.

Related: 10 steps to becoming a small business consultant

Conclusion

To recap, consider these techniques for packaging intangible services:

  • Align with a well-known brand and/or professional organization.
  • Offer a package deal.
  • Use frameworks and tools.

Whatever packaging tool you use, make sure it’s one you feel comfortable with and can explain easily to your clients. The better the packaging, the easier the sale.

The post How to package intangible services and why you should appeared first on Garage.

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