Product or Service: What Are You Really Selling?

Part A: Prove the Idea Works

Nothing happens until someone sells something.

No matter what your business does, the foundation of it is sales. That is simply how a business stays alive. So the first question is the obvious one: what are you selling? If you have a product, the answer seems easy. You are selling the product. If you sell a service or information, it gets more interesting, and I would argue it gets more interesting for product businesses too once you look closely.

When we wrote our first business book we asked ourselves that question. Were we selling a product, the book, or were we selling information, the content? You can argue both. But the answer changes what you have to do to make it sell. A book gets sold through bookstores and online listings. Information gets sold through trust, reputation and the promise that reading it will change something for the reader. Same object, two different businesses.

The hamburger question

Robert Kiyosaki tells a story about people constantly approaching him with amazing products that are going to take over the market. He smiles and asks them one question: can you make a better hamburger than McDonald’s? The answer is always yes. Almost anyone can.

Nobody argues that McDonald’s makes the best burger. What it has is a brilliant system that promotes, distributes and sells its product, consistently, everywhere. So the question that decides your business is whether you can build a better system to promote, distribute and sell it.

Look around. A balloon that makes a rude noise became a business. A singing fish on a wooden plaque. A toilet paper holder with a radio in it. None of these were the best anything. They proved that you can sell almost any product or service if the three pieces are in place: promotion, distribution and sales.

Four pieces, and the product is only one

Here is the distinction most new owners miss. They think of the product as the business and the marketing as an add-on for later. In reality the product is one of four pieces, and often the smallest. The other three are how people hear about it, how it physically or practically gets to them, and how the exchange of money actually happens. And remember that the price you sell something for is a hundred percent part of your marketing strategy.

A landscaper who does beautiful work but has no way for a homeowner to find him, no clear way to book, and no follow-up when the estimate goes out has a hobby with a truck. A landscaper with average work and all three pieces in place has a business. I do not like that this is true, but I have seen it over and over. And once the system works, you can improve the work inside it.

The questions that belong in your plan

Sit with your product or service and answer these honestly. How could it be promoted, and to whom? Who will actually be the buyer, which is not always the same person who uses it? How will you get it to them? Then check whether there is demand you can fill or whether you have to create it, whether an existing channel already reaches your buyer, whether you can piggyback on products already on the market, and whether you can set up a better system than your competitor or simply copy theirs. Finally, decide whether you can promote, distribute and sell this yourself, or whether you need to hire someone for one of those three.

The answers become part of your business plan. What I urge you to do is spend your energy on how you will set up the system rather than perfecting the thing you sell. You can always improve the product. You cannot improve a product nobody knows about.

Three boxes

Draw three boxes on a page labeled Promote, Distribute, Sell. Under each one, write a sentence on how it will work for your business on day one. If any box is empty, or says “word of mouth” with nothing behind it, that box is where your first real work is. Then write one line at the top of the page that finishes the sentence “What I am really selling is…” without naming the product.

Two or three hours of thinking, and it is free. If one of the three boxes needs skills you do not have, that is a hiring or partnering decision, and a later lesson covers how to choose those people.