Solution Sets: How to Combine Products & Services for Profits

By Len DiCostanzo 1

puzzle pieces

There’s a downside to the pure services strategy: You’re likely losing business to a a competitor who sells products, but then bolts on the associated servicing of those products in a one-stop transaction. Even loyal clients might not think they are violating your business relationship, feeling like they are simply buying from someone something you don’t offer.

I know this happens, because I experienced it back in the day when I ran my own IT services company, and still see it happening to the service providers I meet every day in my role here at Autotask Corp.

So how can you compete? Here are some clues.

Product Challenges

Products drive services revenue in all forms including: professional services, integration services, managed services, and warranty work. And in fact, the most profitable and successful IT companies have a balance of products and services in their portfolio. However, service companies find it hard to expand their product sales. Here are a few typical reasons why:

The Answer: Solution Sets

A key to overcoming those objections, and driving profitable product sales while growing services revenue, is to build “solution sets.” Solution sets are comprised of the products and services that make your solution work, and meet and resolve client needs and wants.

You can begin by documenting the specific business needs and wants that you have already solved for a particular client or group of clients. Maybe you have a client or two in a vertical like Healthcare or Construction. Take a look at the problems you solved with the solutions you implemented for them. Turn those problems into questions you can ask in the sales process or retain as listening points during discovery conversations. You can also pose them in your marketing materials.

Getting Started

If you are focusing on the construction vertical, as an example, you might ask questions like:

Sure, these questions may seem strange if you are not familiar with IT solutions for construction companies. But if you are a construction company that continues to do business “the old way” (and believe me, there are still a lot that do), they will resonate. Asking these questions, or acknowledging the pain they cause, will show you are familiar with their business and they will immediately get a sense you can help them keep up with, or surpass, their competition. And win more work. And that is what they want to do.

Crunching the Numbers

Next, define the products and services you have used before that made your solution work. You can start with a simple Microsoft Excel workbook, or use a robust advanced quoting tool to build a quote template. The key to a solution set is to standardize on specific products and services you know will work, since you have used them before. Confirm the hard costs of those items, that is, what you paid your distributor or other supplier to buy the goods. Add in the effort and time you expended to integrate those items into a solution. Put them together to understand your costs, and build in your profits. Building a solution set this way helps you understand if this will be a profitable endeavor for you.

Now, when you begin the sales process with your next construction prospect, you and your sales team will be confident you understand the potential problems, needs and wants you will encounter. And you will be confident you can help. With a few tweaks, you can propose a solution set that has worked before, and you will be able to sell both products and services where no one can question your motive.

Soon you will have a critical mass of clients to qualify you as the local “expert” in that vertical, opening more doors. And by working over and over to sell the same basic solution sets, you’ll become a lot more efficient doing repeatable processes rather than reinventing the wheel with every sale.

Len DiCostanzo is Dean of Autotask Academy and Senior VP of Autotask Corp., developers of Autotask hosted professional services automation software, the VARStreet family of advanced quoting and e-commerce tools and Taskfire a hosted service desk and ticket management system sold by IT solution providers for businesses of all sizes with internal IT resources. Monthly guest blogs such as this one are part of The VAR Guy’s annual sponsorship.