Is Your Product High-End or Every Day?

By Christina Suter on Oct 26, 2019 at 08:00 AM in Business Issues
Is Your Product High-End or Every Day?

Is your product (or service) high-end or every day? Knowing within which of these your product falls will help you better understand your sales cycle, product design, and product placement in the market. Do you sell Lamborghini's or do you sell books? Does your service take a lot of time and personalization or can your service be completed within minutes? Do you sell a $25 product or a $2500 product? The amount of engagement your client spends with your product determines whether your product is top-end or every day. 

If you have a simple product that’s very useful but requires a lot of explanation then you have a product that has a major service element. Your product is the widget but how you use it is the service because you have to spend time and money creating an instructional video, face to face time showing how it’s to be used, or digital downloads to walk the user through the process. A plumber effectively sells pipes, but the biggest piece of their work is the actual installation of those pipes. Therefore, service is the plumbers’ biggest piece.

Identify your product correctly
As a real estate investor and a small business manager, I sell services and products. I sell my brain and my time, but not really a particular gadget. So how I interact with my clients on a personal and daily basis is what they’re paying me for. If I sold a book I’d post it online with some info, people would pay and I would be responsible for getting them the product.

Do you have a pure product, a service only, or a service attached to a product? Depending on which one you have, the sales cycle, the process of selling them are different and therefore require correct pricing. 

Service= I spend a lot of time talking individually about my service.

Product= I don’t spend a lot of time talking to people about my product.

I attended a real estate meeting not long ago where two people presented a product they'd developed. Although not a physical product, their app was the product and therefore th focus. They spent time teaching people about how to use the product, what benefits it offered, and what it did. They didn't spend time talking about themselves, how smart they were, or their expertise. They have a service-based product because the app is the product but the only way to use the product is to have a significant amount of service surrounding it. 

When you price out your service-based product, include all direct or hard hours with your client and all of your soft or indirect hours, which include answering emails, doing research, etc. For every hour you spend with your client you may spend two hours preparing for or following up on what your one direct hour included. Therefore do not quote them a price based on just the one direct hour that you are talking to them, but the three hours, one hard hour and two soft hours that your preparation and follow-up will cost you. 

Is your product upper or lower end product? Do you sell Lamborghinis or Porsches, or books or watches? It takes 7 touches for someone to start to trust your product. If you walk into a Lambo dealership they have a leather sofa and a coffee machine because they want you to come in, check out their product, talk to salespeople, and to hang out. Their goal is to make you comfortable because the higher the price point of a product, the more hours of exposure it takes you to interact with it before you decide to purchase. If you sell a high-end product, you have to position yourself as an expert in that field. There should be multiple ways to research and reach you before I buy from you. Every way you’re available increases the level of trust the potential client has. Higher-end products require a longer sales cycle.

Choose your channels wisely. If you have a lower-end product, you want to have all social media channels so that people can check you and your product out. If you have an upper-end product you want people to be able to contact you directly as well as having a way to collect information from them, like an email sign up. You want them to be able to directly speak with someone who has the ability to sell to them.

BMW has four years of maintenance because once you purchase, you’re not done, you buy because of the relationship that comes with it. An extended sales conversation should be accessible. You never know how many hits a person will need before they decide to buy from you.

If you have an every day lower-end product, get efficient about distributing information about your product. Have efficient channels, a website that gives all the information that a phone call might ask. Use channels that are of a low cost to you.

If you have a higher-end product, write out how many channels people can reach you through and is there someone available to sell? With higher-end products you need to reach fewer people, but the right people. So spend more money on marketing and customer service and have direct contact with your customers and potential customers.