Services marketing is different from product marketing because services are not like products. You need to understand the fundamental differences before you can develop a marketing plan for your services.
The services industry is now about 70% of the US economy and growing. For a product company adding a service can be a great way to create a differentiator from the competition.
Services Are Intangible
A product has physical characteristics, such as shape, weight, color, texture, etc. A product is tangible. For instance, a car, a washing machine, a computer, a widescreen TV, a pair of jeans, etc., are all examples of tangible objects. In simple terms, you can put a product in a box.
A product provides benefits to the user because of what it does, the functions it performs.
On the other hand, a service offering has no physical size, shape, color, or weight. You can experience a service or see the result, but the service itself is intangible. For instance, IT services, legal services, car repair services, web design services, etc., are clearly intangible. You cannot put a service in a box.
Services are performed, not manufactured
Because of the intangible nature of services, the benefit of a service to the client comes from an activity performed by the service provider.
Although equipment, tools, etc., may be involved in the service delivery process, it’s the end result that the customer is looking for.
For instance, a car mechanic uses tools and parts to fix a car, but what the customer is really buying are the mechanic’s knowledge, skills, and activities needed to get the car fixed.
While an attorney relies on their education, law books, legal databases, etc., what their client is looking for is the attorney’s expertise. What they’re really buying is the resolution of their legal problems.
Services cannot be kept in inventory
Another key difference between services and products is that it’s impossible to create an inventory of service offerings. You just can’t create an inventory of, for instance, root canal treatments, haircuts, oil changes, legal advice, or consulting projects.
You cannot put a service on a shelf, waiting for distribution and delivery to the customer at a later time.
Services cannot be returned or undone
Once a service has been provided, it cannot be undone or returned. You cannot “undo” a haircut, a paint job, a medical procedure, or legal advice.
If the service was not provided properly or if the customer is not satisfied, the service provider may try to remedy the situation. If at all possible, they could try to fix the problem by redoing the service to fix the problem or perhaps offering a refund. But, the service initially provided cannot be erased.
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Services Marketing Requires a Different Approach
With these differences between services and products in mind, developing a marketing strategy and marketing plan for services requires a different approach.
Clearly define the service offering
What the service offering is all about needs to be clearly stated to help the customer make the decision if this is the right solution for them. Make sure that the right benefits are offered, to the right customers, and for the right reasons.
A good service definition is very helpful for selecting your target markets. In addition, it helps employees to understand what the firm does and for which customers.
Customers are often active participants in the service delivery process. It is important to manage their expectations of what will be provided and to clarify what their role is. A service description can make this clear.
Also, a service description helps customer-facing employees as well as the “behind-the-scenes” employees to understand what the service is about and their role in the process. It sets the standard and serves as a training tool.
Unlike products, services do not offer customers visual clues about function, performance, and benefits. A good service description makes it easier for customers to understand what the service is all about, the process, the value, and benefits.
Without this information, the customer may not understand the service well enough to be able to make the purchase decision. A service description should clearly state:
- Why the service is important
- What the service is
- How the service is provided
- Who the service is for
- Benefits of the service
Marketing Mix for Services – The 7 P’s
Traditionally, marketers have used the well-known marketing mix of the “4 P’s” for product marketing:
In services marketing, these elements are still important. But, three more need to be added to the marketing mix for services:
- Physical Evidence
Customer-facing employees need to have the proper training, skills, tools, and attitudes to provide the service, effectively and efficiently. In addition to technical skills, they should know how to deal with people, have good communication skills, and be focused on the customer.
These hard and soft skills not only streamline the delivery process but also improve the quality and value of the service as perceived by the customer.
Another aspect is the service delivery process. Well-defined and documented processes ensure that the service is delivered in a consistent manner. This is important for efficiency as well as for service quality. Proper documentation of the service delivery process makes it easier to train employees.
Customers perceive a service where everything goes smoothly as a sign of quality.
The final “P” – physical evidence – deals with anything ‘tangible’ about your services business, such as the appearance, location, and cleanliness of your facility, the appearance of the reception area, the look and feel of your company’s website, documents produced, etc. It even applies to how your employees behave, dress, and interact with the customer as well as with each other.
Keep in mind that customers notice if your business facility is not clean, safe, well lit, or properly maintained. Your office has to look the part and match your firm’s positioning and branding. For instance, if you want to be a high-end firm, you have to make sure that every client experience with your firm matches that image.
How to Promote Services
Now, what does this all mean as far as promoting your services?
The inbound and outbound marketing communications that work for products apply to services as well, such as the need for a compelling website, putting effort into SEO, running email campaigns, blogging, etc.
However, because of the intangible nature of services there are some specific aspects to be aware of and pay attention to.
Here are a few thoughts:
Highlight the emotional benefits
Create an emotional connection to the service by highlighting the benefits. For instance, showing how your service improves the client’s life, benefits their health, beauty, safety, financial security, legal situation, etc., will generate an emotional response.
The stronger the emotional response, the greater the perceived value in the eyes of the customer.
Also, try to make the service and the service experience more tangible in the mind of the customer by using flyers, brochures, diagrams, videos, etc., showing the process, etc., that clearly demonstrate what the service is for, how the service is delivered, the tangible benefits, etc.
Emphasize experience and qualifications
Build confidence in you, the service provider, by highlighting your experience, training, education, and qualifications. Make the potential customer feel comfortable with your ability to do the job.
Provide proof-points of the service
Using images, videos, before and after shots, etc., you can show the end results and quality of the services offered.
Also, customer testimonials endorsing your firm can be very powerful in creating a level of trust.
Offer a free trial or money-back guarantee
If appropriate for your type of business, offering a free trial might make sense. This lets the customer experience what the full service may look like and the benefits they would receive.
Also, a compelling money-back guarantee reduces the risk to the customer and can be a strong motivator to try your service.
Offer a freemium pricing plan
If you can make it work for your business, offering a freemium pricing plan allows customers to become familiar with your basic service and the benefits at no cost. Premium features are made available only in the paid option.
Conduct demos or tours
You may also want to think about conducting demos or tours to explain what’s involved in the service, the benefits, and how it will be delivered. This can trigger a customer’s emotional connection with your firm and services. Anything with a “wow” factor is worth showing off.
I hope this post provided some insight into how services marketing is different from product marketing and how you could fine-tune your firm’s services marketing.