Sales and Marketing Management published a story on the job outlook for a number of industries in their Feb 2004 edition. I thought it was interesting tha they noted only 7 in 10 product sales reps can switch to services. That clearly demonstrates the difficulties with selling the intangible.

A survey of 370 companies worldwide for The Association for Services Management International last year showed the growth rate for services companies was double that of products in 2002, and profit margins for services were 50 percent greater than profit margins for products. “Bottom line, the services industry is doing great,” says Mark Hordes, a partner in Alexander Consulting, a professional services strategy firm in Houston, and coauthor of S Business: Reinventing the Services Organization.

“You’ve got a host of major companies — GE, Unisys, Xerox — that are becoming services-led rather than products-led. Look at Unisys,” Hordes says. “Three years ago it was eighty percent product-led. Today it’s seventy percent services-led and hugely profitable.”

Rick Janes, director of sales at MSS*Group Inc., in Castle Rock, Colorado, says his company, which provides telecommunication cost and financial management services to Fortune 1,000 companies, hasn’t slowed. “Although it’s highly competitive out there for sales jobs, the outlook is very good,” he says. “I definitely plan on expanding my sales force, perhaps doubling it, in 2004.”

But both Janes and Hordes say the challenge for products sales reps who switch to services is in knowing how to sell an intangible. “You have to get retrained. It’s a completely different selling game,” Hordes says. His firm’s experience shows that only seven out of 10 product sales reps can successfully transition to services.

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