Many marketers and business managers insist on lumping professional services into the same category as consumer goods when it comes to “selling”. Maybe simplifying it in that way makes it easier for the next “GURU” to sell their magic bullets. Ever heard this: “If you do this (their idea) in ANY industry, you will be successful!”? Sorry to deflate anyone’s balloon, but it’s simply not true. There’s a HUGE difference between marketing and sales of consumer goods (often categorized as wants) and professional services (often recognized as needs). Here are couple of scenarios that may help explain the difference:
Scenario #1: Consumer Goods—The Auto Dealership
Would you agree that most people need a car to get back and forth to work? Is that the only criteria people consider when buying a car? If it were, everyone would be driving the same kind of car—one with an engine, 4 wheels, seat belts and airbags, etc…Just the basics and no more. We know that’s not how it really works, right? People usually have their heart set on a SPECIFIC car: A car that differentiates them from everyone else. And they tend to buy from whatever dealer will give them the best price on that car they want. A close friend may even be a sales rep, but if the dealership insists on a price that is perceived to be out of line, the customer has no problem going elsewhere to get the car they WANT. Even if it means their friend doesn’t get the sale.
Scenario #2: Professional Services—The Dentist’s Office
A patient visits their dentist’s office for a cleaning, but this isn’t a routine appointment: The X-ray identified an infected root that would soon reach a nerve ending. They are going to NEED a root canal. Does this patient WANT a root canal? Absolutely not, but NOT having one results in more pain than the procedure itself. Two key items of note: They aren’t likely to price-shop the procedure. They aren’t likely to seek help on their own. Instead, they’ll most likely get it done by the professional their dentist trusts enough to refer them (and they know is quite liberal with the use of anesthesia!)
Wants Versus Needs and Incentive Plans
Most sales representatives work on commission. This is certainly true for the auto industry. It’s no secret that the goal of every business is to make money. Where the chasm seems to be widening is in the actual FUNCTION of every business: The acquisition and maintenance of customers. Where the problem lies is in the priority of these two facets of business. In some cases, they seem to be reversed. It’s certainly why some professional service providers are getting so much attention these days. Let’s revisit the two stories again to explain why this is significant.
The Auto Dealership Revisited
When a customer WANTS a vehicle of a specific year, make, model, color, feature/accessory list, etc, they don’t care who they buy it from as long as that car makes it to their garage. The car they want may be very unique, but in most cases it’s still categorized as a commodity. They don’t necessarily need to trust the person or organization they are working with to buy that car…all that matters is that they get what they WANT. They also don’t care how much the person that completes the purchase agreement with them earns in commission. Again, they WANT that car. Anything else is irrelevant.
Back to the Dentist’s Office
Similar to the auto dealership experience, it’s likely that a patient isn’t going to care how much the root canal costs, especially if they have dental coverage. However, let’s say the dentist and the oral surgeon are part of a larger organization, and at the head is a CEO. One day, the CEO says: “We’re not doing enough root canals…You need to do more or else we’re going to have to cut out that part of the business.” One way to solve the problem is for the dentist and the oral surgeon to get together and come up with a way to diagnose and refer more root canals. Another way is for the oral surgeon to just do an additional one while the customer is under anesthesia, then bill them for it.
Question: IS EITHER SOLUTION ETHICAL?
(You really don’t NEED an answer to that, right?)
The difference between wants and needs is huge, but the one constant across ALL industries is the same:
FUNCTION PRECEDES GOALS EVERY TIME. THE ACQUISITION, MAINTENANCE, AND RETENTION OF CUSTOMERS IS WHAT ENABLES BUSINESS GOALS TO BE ACHIEVED.
What drives YOUR decisions?