Why Products Sell and Services Smell

This morning I was talking with a friend who sells professional services for a large outsourcing company. He was frustrated because his systems integration company sells the same thing that a dozen other SI firms sell. CIOs view certain types of services as commodities because there are so many outsourcing companies competing for the same gigs. My buddy and I were talking about ways to position sales and marketing programs to be more psychologically appealing in the face of perceived commoditization.
Battling Human Nature
It's human nature for buyers to question the price tag of intangible services, especially when those services are being delivered by armies of highly-skilled, low-paid, productive workers in India and elsewhere. It's human nature to question the price tag of almost anything. But it's also human nature to accept the price tag, even if it's overpriced, once people know exactly what they're going to get.
If services are are positioned more as product offerings buyers haggle less. There may be reluctance to buy all of the deliverables associated with the services offering, but there's more acceptance of the product as a whole. That's why services offerings should have consistent, specific, defined, branded deliverables associated with them.
In my blog post that discusses engineering versus sales-driven organizations, I opine that marketing messages should be kept focused on solving business issues, and not solving specific technology problems. That's one of the reasons my buddy at the SI firm is running into challenges - because his organization leads with a software development-oriented approach. They know that their team is really good at delivering on a particular type of software development problem when IT organizations are trying to implement a specific enterprise software module. But just because they think and know that they're good at something doesn't mean even a caveman can sell it.
What this means for marketing and sales
Don't let the engineers take over and position the company's product as a technology. Engineers and scientists become enthralled with their own creations and are emotionally resistant to talking about a customer's needs as opposed to their "baby," and the way it has been designed.
If your company is services-oriented, as opposed to product-oriented, consider offering your suite of services in a uniform, easy-to-understand fashion throughout all of your marketing and sales collateral. Deliverables can then be "brought to life" during sales calls, mapping the deliverables to the customer's specific business challenges.