Intangibles: Beyond Goods and Services
If your company provides physical objects for money, you sell products.
If your company performs activities for money, you sell a service.
Makes sense, right?
But, these days the line between products and services is blurry. Product retailers often promote a buying experience and invisible benefits. Services companies showcase their skills and solutions. In a competitive market, both types of companies sell quality, performance, service and expertise.
Before we start marketing “intangibles,” let’s define them.
A sale of a physical object with no further client-vendor contact = Tangible.
Long-term client-vendor relationships to perform high-value services = Intangible.
When you buy a bike, you leave the store with a tangible product that has intangible benefits, like a mode of transportation. Unless there’s a problem with the bike, you probably won’t contact the seller again. If you love owning the bike and had a good buying experience, you might return to the same store to buy another one.
If you hire a software developer, you’re paying for an intangible. Their skills produce a valuable product, but you can’t touch or hold it. Initially, they will share their knowledge and experience to build trust. They will offer guidance as you scope out your project. They will complete the project and provide ongoing support. Above all, your relationship with the developer provides the most value.
Cost is another way to define “tangibles” and “intangibles.”
If you sell something pricey, or with a lengthy sales cycle, intangible perks can help convince a buyer to say yes and stick with you. For example, as a car salesman, converting Hyundai buyers to Mercedes buyers would be a boon for your business. But, people buy Hyundais for their good gas mileage and low cost. To sell a Mercedes instead, you would promote luxury, status and a premium buying experience – all intangible benefits.
What makes the marketing of intangibles unique?
Marketing’s purpose is to attract attention, build demand, and lead buyers into the sales funnel.
You can touch, see, and try a tangible product before buying. And a low sales price requires less effort to attract buyers. There are many companies who sell tangible products without salespeople or follow-up buyer support. Marketing for tangibles revolves around efficiency, speed, competitive pricing, and easy buying.
For example, a Mexican food restaurant may receive rave reviews for its service, but at the end of the day, it specializes in selling plates of enchiladas at a competitive price in a comfortable setting that promotes a limited dining experience.
Intangibles don’t work that way.
Intangibles are characterized by being highly experiential, tailored to the client’s needs (or scope) and sensitive to emotion. Your customer chose your firm based on reputation, brand, service, and unique value. Your customers might not even understand what you do, but they’re buying peace of mind. This happens all the time in insurance, custom home building, engineering, and more, where the seller offers intangible hard skills and a relatable promise to improve the buyer’s life.
Beyond Services Marketing
What should you remember after reading this? What’s the main takeaway?
Intangibles are more than just services.
Intangibles are high worth products, software, professional skills, trades, engineering expertise, performers, and so much more. A company selling intangibles must tell a compelling story to attract a buyer. They need a sales process – usually with real live salespeople – to build trust and close the deal.
The answer to marketing intangibles involves knowing your customer and understanding that they don’t buy things, they buy solutions. To properly market your intangible, start by establishing who you are, what you offer and why you’re different. Match your intangible to your customer’s needs, deliver an excellent buying experience and continually reinforce the value of your service.