Services play an increasingly important role in the US economy. Adding services can be an important strategy for product manufacturers looking to differentiate themselves. However, it’s important to realize that the approach to marketing these services should be different from the marketing of products.
Service offerings and products are very different in nature. It is important to be aware of this, both for the service delivery and for how a firm goes to market with its services.
How Are Services Different?
A product provides benefits to the user because of what it does, the functions it performs. A product has physical characteristics, such as a particular shape, weight, color, texture, etc.
On the other hand, a service offering is intangible. A service can be:
- An intangible act, such as legal services, financial services, education, medical care, or consulting, just to name a few. Although a car repair, for instance, results in a tangible object, the car, having been fixed, the repair process itself is intangible.
- An activity performed by the service provider that requires the presence and involvement of the customer. For instance, a medical procedure, a haircut, or fitness training. In these cases, the customer must to be present and involved in the process, in one way or another, in the delivery of the service.
- An activity applied to someone’s business, home, or other possessions. For example, lawn care, car repair, house painting, dry cleaning, or janitorial services.
Key Characteristics of Services
Services Are Intangible – Services are intangible, products are tangible. A service has no physical size, shape or weight. You can experience a service or see the end results of a service, but the service itself cannot be touched.
Services Are Performed, not Produced – A service is an activity performed by people. The process is the service. Tools and equipment may be used in the service delivery, but someone’s personal activity is essential. There may be a tangible component to the service, e.g., a legal document produces by a lawyer, dental work created by a dentist, but the personal activity is critical to the service delivery.
Services Are Delivered, Distributed and Consumed Simultaneously – Typically, service delivery, distribution, and consumption all happen seamlessly and at the same time. There is no clear distinction between these stages, nor is there typically a time delay.
Services Are Customized – A service is always tailored to a specific customer, their particular needs and situation. Unlike products that are usually produced in volume to a common standard, services are not ‘cookie-cutter’, standard solutions.
Services Cannot Be Stocked – It’s impossible to create an inventory of service offerings prior to delivery. You can’t create an inventory of root canal treatments, haircuts, or car repair for distribution to the customer.
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 surgical procedure, or legal advice. If the service was not done properly or if the customer is not satisfied, the provider can attempt to remedy the situation, basically by redoing the services, or offering a refund, but the initial work cannot be erased.
Services Are Highly Dependent on People – The quality of a service depends on the skills, training, experience, and attitudes of the people providing the service. Lawyers, doctors, hairstylists, car repair technicians, they all need to have the right skills, training, and tools to do the job properly. Often, the customer is a direct participant in the process. For example, you cannot have a surgical procedure done without being present. The customer’s ability and willingness to play their role in creating the service has a direct impact on the result.
Due to these differences between services and products you need to pay extra attention to how services are marketed.
Creating a Service Offering
As the service provider, you need to make sure that the right benefits are offered, to the right customers, and for the right reasons. If you’re developing a service for your customers, consider:
- What does the service entail
- Who is the customer
- What is the customer’s need
- Which benefits are to be provided
- How will the service be performed
- Which resources are needed
The Marketing Mix for Services
Traditionally, when promoting services, marketers used to apply the products marketing approach of the classic “4 P’s” of the Marketing Mix (Product, Place, Price, and Promotion).
The right mix of these elements is still critical. However, in services marketing three more P’s are added: People, Process, and Physical Evidence:
People – Employees need to have the training, skills, tools, and attitudes to provide the service. In addition to technical skills, people skills, good communication and customer focus are important. This not only streamlines the delivery process, it also improves the value of the service as perceived by the customer.
Process – Well-defined processes ensure that the service is provided in a consistent manner. This is important for efficiency as well as for the service quality. Properly documented processes also make it easier to train employees. A service delivery process that runs smoothly is perceived as a sign of quality by the customer.
Physical Evidence – This last “P” of the Marketing Mix deals with anything ‘tangible’ or visual about your service operation, such as the appearance and location of your facility. It even applies to how your employees dress and act.
Customers take notice if your place of business is not clean, safe, well lit, or properly maintained. Your office or store has to look the part and match your company’s positioning and branding. If you want to be a high-end firm, you have to make sure that your office looks the part. Customers have certain expectations that need to be met.
Focus on the People
Service is all about people. In the end, it’s people who buy and use services and it’s people who deliver the service.
Customers – Your customers not only purchase and use services, often they are also participants in the process of creating the service. It is important to manage customer expectations of what will be provided and to clarify what’s expected of them. A first step in doing this is the development of a service description.
Employees – A service description communicates to employees what the service is about. It sets the standard and serves as a training tool.
Every employee interacting with your customers is involved in service delivery. What they do or say (or fail to) and how they act is all part of the customer experience. The service description helps your employees understand what is expected of them and how to engage with customers.
Develop a Service Description
Because of their intangible nature, services do not provide customers with visual clues about function, performance, and benefits. This creates the need for a clearly defined service description to help customers understand what the service entails and its value. Without this the customer may not buy the service.
A service description clearly outlines what a customer can expect as well as why the service is relevant. It outlines how the service addresses their need.
A service description should clearly state:
- What the service is – what is performed or provided
- Why the service is important – the perceived problem that drives customer need
- Benefits of the service – time saved, reduced costs, improvements made
- Deliverables – what the customer can expect, e.g., a report, a certificate, a particular end result such as a fixed car, 24-hour response
As you can see, developing and marketing a service offering requires a different approach from traditional product marketing. Keep in mind that a service is intangible and that service delivery is all about people, in particular the customer.
With thanks to Dee Davey of Creative Ideas Marketing for her original post.