Top Reasons Why Customers Do Not Buy Services

by Apr 15, 2019

Why don’t customers buy services? Because they believe they do not need the coverage or that they do not feel that the costs outweigh the benefits. Selling the value of service is making the case for why the customer is better off with it than without. Selling services demands that you establish a credible and compelling value proposition.

Overcome Customer Objections

Selling the value of service is making the case for why the customer is better off with services than without. Selling services demands that you establish a credible and compelling value proposition to equip your sales channels with the knowledge and skills to overcome customer objections.

Top Reasons Customers Do Not Buy Services

Why Customers Don’t Buy Services

The primary reason customers do not buy services is that they do not feel that they need what is offered. Sometimes customers do not buy services because they are simply not given the opportunity to do so. In other cases, customers react to the cost of services and feel the price is too high, or they simply cannot afford to purchase a service contract.

When customers express that they do not need services there is also a consideration for the price they are asked to pay.  If services were free, then they would most certainly take the services.  This “I can do without” attitude combined with some degree of price sensitivity demands that we equip our sales channels with the knowledge and skills to overcome customer objections.

Establish a Compelling Value Proposition

The value proposition describes the relationship between the price and benefits from the services a customer receives. To be compelling, the benefits must be perceived to exceed the cost. Service benefits may be intangible – insurance against risk, or tangible – a commitment of specific resources or attainment of a specific outcome.

Although difficult, it is imperative to quantify the value of all service benefits so that they can be compared to the price. A compelling value proposition is fundamental for successful sales and renewal activities. Selling the value of services requires the following:

  • Understand your customers’ needs and expectations from the product and services they purchase from you.
  • Offer a robust portfolio of services. Not all customers will need or benefit from the same types of service so develop offerings that can align to the customer segments you serve.
  • Set reasonable prices for your offerings. This does not suggest that reasonable is low, but it must be justifiable. Customers must understand and agree that the benefits of service are consistent with the price they pay.
  • Define a clear and compelling value proposition.
  • Help sales channels and renewal teams understand the elements of the value proposition so that they can clearly articulate it to customers during sales and renewal activities.

Support Program Design, Competitive Analysis and Pricing Strategy

Support program design and pricing is challenging. Contact me to learn how ServiceXRG can help you determine if your service portfolio is up to date and aligned with customer needs.

  • Do you offer the right programs?
  • Is your portfolio Customer Success-Ready?
  • Do customers need more or less than what you offer?
  • How well is your pricing aligned with customer expectations?
  • What do your competitors offer and what do they charge?

Contact us now to learn how we can help develop and optimize support and services portfolio offers.

Chat with us (see link on right side of screen), send an e-mail to tsweeny@servicexrg.com, or use our contact form.

Featured: Selling Service Value

Selling services demands that you establish a credible and compelling value proposition. To be compelling, the benefits must be perceived to exceed the cost. This playbook describes the essential steps to develop a compelling value proposition to maximize support sales and renewal activities.

Login to get your copy.  Not a Member?  Learn more about our Service Success programs or contact us.

Login to Access the Full Report

If you don’t have an account, create a free* membership.

Login

*Membership level determines your access to ServiceXRG research and other member services. Paid memberships include access to research and playbooks. Free memberships include access to some reports and discounts to others. Please visit our membership page for a list of available membership programs.

Related Articles

Selling Service Value

Selling the value of service is making the case for why the customer is better off with it than without. This article explores the 5 critical steps for establishing a credible and compelling service value proposition.

read more

How Much Should You Charge for Support?

The average prices for support programs range from 15.6 percent for a basic level of support to more than 26 percent for a high-end premium offer. Setting the correct price for your support programs begins with a baseline understanding of what your market will bear but ultimately the price must be based on the type and level and entitlements offered. This article offers guidelines for setting the right price for your support programs.

read more

Is it worth competing for Service Industry Awards?

There are a plethora of industry awards and recognition opportunities to provide a means to get recognized for your service initiatives. Is it worth your effort to pursue industry recognition though these awards – here are some of the pros and cons.

read more

Do You Need SLAs?

Every technical support organization should have service level guidelines as a basis for determining how to prioritize cases and allocate resources and for managing consistent expectations with customers. Introducing service level agreements with committed performance levels is only required when customers demand them, or it is necessary for competitive differentiation.

read more

Pin It on Pinterest

Share This