If you ask this question (i.e. are you selling Product or Solution?) to any business, the obvious answer would be the latter, i.e. solution.
But covering the last mile is an altogether different thing, as compared to selling service and from my personal experience with startups, I see most of them selling products, rather than solutions.
Here are a few personal anecdotes to set the context:
Story #1. For some reason, I had to get a door lock repaired (the lock was jammed and finally broke during an attempt to open it forcefully). And since it was Sunday, I had to get the damn lock in place (i.e. before the week starts and one gets into the hustle bustle of life).
Here is what two vendors offered –
Vendor A: Price of lock : Rs. 500/. No carpenter to fix the lock (remember it was Sunday).
Vendor B: Price of lock : Rs. 575/ (different brand). Has a carpenter to fix the lock (carpenter charged Rs. 70/ to fix the entire thing).
Obvious that I went ahead with the second vendor, even though the product he was selling was priced higher.
Story # 2: I recently bought a Dell Inspiron laptop and within 4 months of purchase, the hard disk crashed (lets not get into the frustration that I went through post-the-crash). While Dell replaced the hard disk, the service stopped at that. On being asked about any help in restoring the backup, company has no intent to help the customer with that.
Product vs. Solution Selling
I wasn’t expecting Dell to deploy it’s support force in restoring the backup – but how about partnership with companies/service providers that can potentially help customers (on being asked for help, the customer care connected me to one of his friend who runs a small service center and the person quoted Rs. 4K for the backup!).
The question to Dell is very simple – does your role ends with buggy hard disk that you supplied; and a ‘free’ replacement that you provided?
In all your move, customer loses a good amount of time (in setting up the machine/reinstalling all the software) and to top that, you do not even provide any help with data backups.
—End—-
Why are these two stories important? Because it’s important to understand that as a product company, you aren’t selling product, but you are selling solution.
The difference between a transactional and WOW experience is obvious to buyers – and unfortunately, most of the product selling stays within the transactional notion.
For the lock example, I preferred to go with a vendor who had a better/equipped ecosystem. As far as Dell example is concerned, I’ll find it difficult to refer Dell to anybody else.
If you are a startup, think of the entire ecosystem of services that will support your product – think of what all does a buyer go through, what are the different touch points? What are the other services that buyer has to avail in order to use the service? How can you improve the ‘overall’ experience?
Big companies can prefer to ignore the ecosystem (well, Microsoft’s 97% revenues come from partnerships with vendors/ISVs etc), but not startups.
What’s your opinion?
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PS: And on top of all this, engineer tells me that the base configuration suggested by Dell (i.e. 250GB HDD/2GB RAM) is not right and most of the customers who bought this configuration are facing similar issue – the only option is to upgrade your RAM!.
You mean – DEll is selling bad config so that customers are forced to upgrade?
Well..
Very interesting point Ashish. I believe, this is exactly where companies need to start thinking about the professional services arm, the arm which helps “deliver” as per the customer needs.
Cheers
Vaibhav
And as Seth Godin says
I visited eight sites. Six of them hide their email address. They use forms of one sort of another. One firm refused to accept more than 500 characters in the “how can we help you” box, while three of them wanted to know what state I was in, etc.
Sure you will get spam if you put up your mail id, but deleting spam is a lot easier than finding customers
Ashish, i would like to add that product selling is on its twilight. We are about to witness only solution selling. Look around in India itself – cement companies, paint companies, etc. I believe auto companies would be the next.
Ashish,
The “product-solution” argument has its echoes on concepts like complementary products and value chain.
Most people are only talking (not thinking or executing) solutions – in other words it is fashionable to say solutions! When someone finds that a “large enough market” for new complementary products exist (in your examples, lock-fixing or disk restore) or if many competitors are differentiating that way, they will jump in. Otherwise, the suppliers (carpenter, backup-man) are few, the information on who can provide these services is not available, and the available supplier (including fly-by-night “specialists”) extract their pound of flesh depending on your urgency.
Why I say “large enough market” is that when one is doing well (selling locks or laptops), there is no real reason to push the envelope. (Doing a e2e value chain for different customer segments is much harder than doing it for a single product). With time and competition, it will change… You see examples in home-delivery of provisions, pickup of car for servicing, business of digital goods etc. IMO, any services (which is the real last mile of solution) is useful to the seller only if he makes some money and that is even harder to do (despite what we would like to believe). Many are yet to master that, and it will happen in due course of time.
-Amal
Another viewpoint if I may…
I am all for selling a complete solution and have been doing this to a great extent myself. However it creates a difficult situation sometimes because the prospect tends to compare you with others who are selling only the product.
It is very important to convey the perceived value properly. Also you might consider providing a break up where you clearly show the base value for the product and the optional extras separately.
Arun
Forget about solutions, sometimes it is difficult to purchase the product itself. Few months back I got a call from someone who was looking to purchase Adobe Creative Suite. I thought it will be easy to find someone who sells original software but unfortunately I couldn’t get hold of any reseller who sells it in my city. So I went to the adobe site and it was kind of tough to navigate it ( which is still the case. Try finding a dealer for your country itself, forget about your city). They have got a reseller listed at http://partners.adobe.com/resellerfinder/na/reseller.jsp ( Ingram Micro India Pvt. Ltd. whose website is listed as techpacindia.com – a parked domain) which doesn’t tell you much. Similarly few days back an educational institute inquired about purchasing oracle 9i. Again the only thing listed on oracle site is Ingram Micro.
I don’t have any idea how the big shot software sales work or maybe I am not looking at right places but it shouldn’t be that tough to get in touch with the prospective company or its representative how big it is.
i wish you could have googled for Ingram Micro and would have easily found the solution – http://www.imonline.co.in/
Hope it helps.. though its quite some time now
Hi Ashish,
I think one could also look at the situtation from purely business (read monetory ) plus controlling the experience of the customer point of view.
In case of DELL’s example or for that matter any other big company, I think there is always a consideration to provide uniform and consistent experience to the customer. And this requires them to control the experience.
Having somebody outside their company being referred could prove to be a little risky as the company has little control over him/her. As an average customer may not be able to realize when DELL’s control got over, if the outsider screws up customer will blame THE BIG COMPANY for it.
Having the same person as an insider (in the company) may just not be financially viable or a scalable option
I feel selling has to be persuasive and instinctive and should be abstract enough so that it could be tailored to each customer’s needs or each unique transaction for the same customer.
Our education, knowledge, case studies should only be used for drawing the inner boundaries of absolute “Do not do things” and outside of them, sky is the limit and we could find examples to justify the name whatever we may call it (Products, Services, Solutions etc).
Brilliant, and thats why my solutions will try for one stop place for everything (Directly or indirectly)
V
Ashish,
Very good post, it works in most cases but I will disagree and share a different thought to this.
Rule no 1 : Do best in what you do
A Startup can create fantastic products and leave the ecosystem to be built by external entities. The reason being
1. Cost to maintain(& create) ecosystem relationships
2. Cost to ensure customer is not bothered by the ecosystem service providers.
As a startup, the core focus is always to get the basics right, hence to start with it is most likely impossible to have ecosystem services built on day one. Also when competition picks up, only ‘core product’ of Startup will enable it to survive.
Umm, Tats the reason a startup fail. And obviously they look for a alternative solution..
If you think the ecosystem will build on its own with its external entities then you are going to lose ur business.
He never mentioned about day one. Have a vision that you should build with a eco system..
The most important realization in the entire startup story is to understand your ecosystem, the different touch points users go through. Believe it or not, many startups do not get this – forget about startups, even few big businesses do not get this.
The ‘transactional’ approach (which is mostly revenue driven) ensures that the co. doesn’t go beyond transactional to consultative selling.
I do agree that one needs to get the basics right first – but one needs to really realize that there is a need beyond basic svc.
Vishnu, Ashish,
It makes sense… I was being a devil’s advocate scenario to get the best out of the community. :p
This is one of the finest article I have found in Pluggd.in
cheers,
Santosh
Santhosh
Sure, I am going to start a SaaS based company in couple of weeks. So was looking into articles. It did gave me a idea how to build my ecosystem.
Thanks Fellas
Fake !!
whos scrnshot is it ?? its perfectly fine !! and i am on AIRTEL !!!
get ur facts right man !
On solution for Dell problem, Rs 4k is too high a price for getting back up. I got it done for Rs 400.
Apko nokia 5230 lena chahia.5230 good phone