Many product companies have tried to get more from their sales efforts over the past ten years by selling solutions—integrated offerings of products and services—rather than mere products. But this is more easily said than done: our discussions with 60 solutions providers suggest that while the winners pick up an extra 3 to 7 percent return on sales, three out of four companies see little gain.

The decision to sell solutions is usually based on either ambition or anxiety. Ambitious companies note that sales of solutions win fatter margins than sales of products and generate longer and more lucrative customer contracts, provide access to new markets, and even help procure a more favorable press. Anxious ones fear rapidly commoditizing core-product markets, pricing pressure from increasingly savvy buyers, and the appearance of aggressive new intermediaries.

But too many companies enter the solutions melee, and those that fail typically do so for one or more of three reasons. First, some companies think they are selling solutions when they are merely bundling products that create little value when offered together; they then have difficulty recovering the extra costs of packaging and pitching the products as solutions. Second, companies underestimate the difficulty of...