Do You Have a Product, a Solution, or a Service?

July 20, 2017

Written by John Centofanti

John’s background spans the creative side of business, including content writing, branding, graphic design, and more. In 2006, John founded Creative Stream Marketing, serving national retailers, tech companies, and B2B companies across the US.

Many tech companies refer to their offering as a product, others call it a solution, and still others refer to their service. What’s the best way to market your offering?

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If you are routinely charging different rates or prices for your offering, chances are, you don’t have a product.

This may not sound like an important point to discuss, but it can influence a prospect’s perception of your company and affect whether he or she buys from you or not. I’ve worked with SaaS companies, software companies, and others who have some type of tech solution. Here are some common scenarios:

  • The sales team refers to the company’s products
  • Its website refers to its solutions, or even products and solutions
  • The operations team refers to the offering as its services

Often, these terms are used interchangeably, with no sense of consistency or clarity.

I’ve seen, within the same company, the terms change over the years without any intention or explanation. Just as common, two people at the same company may have opposite but compelling reasons why it’s one rather than the other. So, do you have a product, a solution, or a service, or all of the above? Here are some important distinctions that might help you decide. Remember, we can debate fine points forever, so these are generally accepted perceptions people have based on the words you use.

Common Characteristics of a Product

Typically, a software or tech product is an off the shelf offering. It is usually not customized to your preferences, and the price charged is the same for everybody. Think of Microsoft Office. You can buy different packages, but the Microsoft Word you get is the same Microsoft Word everybody else gets. There is no option to ask for a red interface or for Microsoft to add features tailored to your business. If you are routinely charging different rates or prices for your offering, chances are, you don’t have a product.

Common Characteristics of a Solution

Calling you’re offering a solution is very common and quite appropriate if it fits the criteria. Often, your solution is geared toward a certain industry or a few industries. It can be retail, healthcare, or professional services. By nature, you have a solution to a common problem. For example, one client developed a solution to help healthcare facilities have the legally required minimum number of nurses on staff at all times, without incurring overtime hours. This was a good solution to a common industry problem. Another client developed a solution to help retailers use their POS system to manage loyalty programs, discount campaigns, gift card sales and other common functions, all in one simple system. Again, it’s an answer, or solution, to a common problem.

Unlike products, solutions can be taillored to your clients. It’s often expected that you will tailor your solution around the specific needs of the client. This also implies that the rate will be different for each client based on what it takes to customize the solution to their needs. It’s widely understood you probably can’t buy it today and start using it tomorrow. Solutions often take time to deploy, including training your staff, before you see a return on investment.

Common Characteristics of a Service

Service is often underrated because many times, service is not good. One client developed several software products. These software programs helped large companies read and use files from different software programs so they could design airplanes, cars, and even factories. They sold products. Yet, they also sold services. The software company would serve as a resource to help their clients convert files by using its own software on behalf of clients. Some of their clients only purchased their products. Others only purchased their services, and others purchased both. Services are charged according to the level and type of services received.

Choosing to call your offering a product, solution or service must be based on facts, not just what you think your prospects want to hear. Your marketing must align with your offering. Otherwise, you’re breaking a basic rule of marketing: to base your statements on truth without overstating.

Many companies distinguish these terms by mentioning their products and services, or solutions and services. Once you decide, you’ll need to get your entire team or company on board so each person refers to your offering accurately.

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