Thursday, February 4, 2010

Commodity Services: Does size matter?

The mundane matter of selling commodity services is usually on my mind these days. It has almost become a favorite pastime. Partly because of the challenge and partly because I myself own a few companies who sell commodity services every day.

Today's question: Does size make a difference in the way you sell commodity services? I do realize that ADP uses different tactics to sell vs. my local accountant/payroll service. But is size itself a sell-able feature? Does it work both ways? --Is being small also an advantage as being big?

Here is a list of personal and professional services I personally use. And my preference for size of business:

Haircut - Small, local, somewhere i have had a good experience.
Personal Taxes - Small, local, somewhere i have had a good experience.
Coffee - If its as good as Starbucks, I prefer a small non franchise store. Otherwise Starbucks.
Food - Small, local, non-franchise.
Legal - I wouldn't buy commodity legal services if possible.

Here are some business services:

Payroll - I am with a big name payroll company but I shouldn't be. Competence issues.
Accounting - I am with a local CPA.
Temp Agency: I am with Robert Half / Accountemps. But only because I saw their billboard. And because I believe their pricing is standard and constant regardless of the customer.

Anyway, back to the size issue. Here is a trial recipe:

Local Presence in a non franchise way. (IBM of New Haven vs. IBM Global)
Known names and faces (locally)
The image and personality of a small boutique shop.
The stability and performance of a big enterprise.

Conclusion: If size of a service company is to be used as a feature, smaller is better.

I need to experiment with this.

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