What Is the Difference Between Products and Services?
In the professional services industry, you’re bound to hear these two terms used: products and services (or similarly, services and goods). But, is there a difference between services and goods? And, if so, what is it?
The short answer is, yes, there is a difference between a good and service. In fact, there are a number of small nuances that separate products or services. Here’s the biggest one:
- Products are generally tangible items — something that your customers can physically hold in their hands.
EXAMPLE: Your company sells branded swag and merchandise to other businesses.
- Services are typically intangible — something that you provide or perform for another person.
EXAMPLE: Your company provides graphic design expertise to other businesses.
Admittedly, the waters can get a little murky in the goods vs. service conversation, as many services often result in some sort of tangible deliverable.
In looking at some different product and services examples, a graphic designer provides a service, but that usually leads to a physical product — like brochures, business cards, or a new logo. Or, a law firm might provide legal services, but that could lead to tangible documents like letters and contracts.
Additionally, it’s possible to combine services and products. For example, think of a subscription meal kit. The subscription itself is a service that provides meal preparation products.
Products vs. services: explained
Still scratching your head? To add some more clarity to the product vs. service debate, let’s look at a few more notable differences between the two:
- A product is more frequently a one-off purchase, while a service can be recurring
- A product can be returned, while a service has to be canceled (usually with notice)
- A product has many different variations, while a service is more standard and straightforward
Grasping the somewhat nuanced difference between “good” and “service” can be tricky, but it’s important for ensuring that you’re using the right messaging with your customers.
The above definitions and bullet points will help you get a better grasp on whether you offer a product or service (or both), so you can better emphasize your deliverables — and, even more importantly, your value.