Nowadays, it’s not uncommon to see companies use the terms product, solution, and service for just one product. The line has become so blurred for so long that we don’t even notice it anymore and even we’re guilty of using these three interchangeably.
While it may not seem like a big deal, this ambiguity can confuse the client about what you’re exactly offering. Your sales team may use the term “product”, the website may list them as “solutions”, and the customer support team may refer to them as “services”. The client simply doesn’t know what to believe.
But, clients are not the only problem. Even you and your marketing team may not know what to promote because setting up a product marketing campaign is not the same as one for a service. So, we need to clear the air.
The biggest reason for such a level of confusion is that many are not clear about the exact meaning of these three terms and often use them interchangeably. So, we should start with the definitions so we can start to separate them.
A software or technology product is usually a ready-made solution. It's not tailored to your specific needs, and everyone pays the same rate. Consider the Microsoft Office suite. You can purchase Microsoft Word in several different bundles, but it's still the same program. You can't request a different color scheme or special features for your company from Microsoft. It's likely that you don't have a product if you're frequently changing the price tag on it.
Or, consider Mailchimp; the company offers many plans at different pricing points, and you may sign up for whichever one suits your needs best. A combination of coding and cloud-based services. Just something easy and practical.
Another well-known “product” category belongs to SaaS systems like Microsoft 365. Companies sometimes choose not to spend extensively on proprietary products, but rather to find an "off the shelf" alternative, often in the cloud, to which you can pay regularly to obtain a certain service.
One of the appeals of SaaS products is the simplicity of launch. With software that can be installed and removed with no effort, you won't have to worry about making a long-term financial commitment to inefficient programs.
Usually, a solution is designed to solve a specific need in a certain industry. It might be anything from a retail store to a hospital to an office. You come to the market with the answer to a widespread issue.
For instance, you may create a program that enables stores to utilize their POS system for a wide variety of routine tasks, including customer loyalty programs, promotion campaigns, vouchers, and more. It provides a workable solution to a widespread issue.
Solutions, in contrast to products, can be modified for each customer. It's common practice to modify a solution based on the customer's unique requirements. This also means that the price will vary for every customer, depending on the degree of customization required to meet their particular needs.
It's generally the case that you can't just go out and purchase a solution and start utilizing it the next day. It may take some time after implementing a solution and training the personnel before you can get a return on your investment.
For instance, let’s say you have an antivirus software program on your hands. Standing alone, the software is essentially a product, but once you mix it with other things such as a spam filter, and tailor it to your company’s vulnerabilities, you can label it as a solution.
Some of the most famous real-life examples of solutions are customer relationship management (CRM) or cloud computing platforms on the market. Here, we see companies often label software as solutions. Some of these solutions include Google’s Cloud Platform, Microsoft Azure, and almost all of the CRM packages that can be tailored to your specific needs.
While many often label a service as a product, there is actually a notable difference. Any kind of technical knowledge, strategic counsel, management, or consulting that makes technological tools more accessible is called a service. A service may be sold alone or as part of a solution or product package. Products and solutions can't stand alone without the help of services. Services aren't technology on their own.
Unlike actual products, services are generally intangible, something that you do for a third party. For instance, your firm offers graphic design services to other companies.
Another example is custom software development. Custom software is like having an outfit made just for you, fitting your body and needs precisely. The creators of customized software create programs tailored to the needs of a particular business or activity. The custom program has all the functions needed by a company.
So, by now, you probably know how the dynamics between product vs. solution, product vs. service, and service vs. solution work. Besides their characteristics, each of these three categories has specific challenges that set them apart as well. Let’s get to them one by one.
So, now you know all the positives and negatives that separate a product, service, and solution from one another. Let’s turn to some of the common questions that may be still on your mind.
Products are often something that buyers can get their hands on and examine. For instance, Various companies buy marketing supplies from your company, making it a product. But, doing marketing for them is a service. Unlike actual goods, services are something you do for the client, not something you sell or physically deliver.
Products and services that operate together to improve one another's value are called synergistic. Many businesses seek to increase profits by adding services to the product value chain; in most cases, innovative ideas that mix products and services are more successful in attracting and retaining consumers.
Many of the software programs we see today, such as Microsoft Office, Adobe Acrobat, AutoCAD, and many other mainstream programs have little room for customization.
While each of these categories is more popular and common in some verticals, there’s no way to draw a hard line because there are simply many overlaps. For instance, you can offer custom software development for different industries such as retail, banking, healthcare, and even IoT.
As the name suggests, a custom software program is tailored to specific company needs. So, it’s obviously not a ready-made product. Plus, software development is something you do for the client, not a tangible good you physically deliver. So, custom software services development is a service.
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