Selling Services in a Product Company: Four Models

Sales and Marketing as a percentage of total revenues is a significant line item in the business model of most technology companies. In fact, it is the biggest bucket left that product companies can go chase to improve profitability. Just look at the data from the Q2 TSIA Service 50 snapshot:

Technology companies serving enterprise customers have become highly motivated to reduce the total cost of sales. Technology companies have also been on a journey to improve their ability to sell business solutions—not just push technology capabilities.

So, exactly how are historically product oriented companies improving their selling motion? This summer TSIA facilitated a session where service leaders came together to share the tactics they were employing to sell professional services. From this session, it was clear there are four very common models product companies are currently pursuing to sell services. These models can be employed to sell professional services, education services, managed services, and even support services.

In the technology industry today, the services selling model employed by a product company is greatly influenced by three factors:

  1. The maturity of the services line being sold
  2. The ability of the traditional sales force to successfully sell services
  3. The financial aspirations the product company has set for service line revenues

To learn more about the strengths and weaknesses of these four models, when they are employed and why, join me this Thursday for the TSIA member webcast titled Services Selling Models:


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