Marketing 102 – Services Marketing

Services are an interesting thing to market due simply to their very nature of being services.

Let me explain, when you buy a service, you’re not leaving with anything physical, or tangible like you would when buy a product.

Therefore the importance of effectively communicating (marketing) these services becomes even more important in establishing customer expectations.

There are 4 differences between product and services marketing that business owners need to be aware of and manage.

• Variability

Because the nature of services is that they are usually performed by people (haircuts, massages, legal services, dog grooming) there exists a greater degree of the variability in the value exchange.

In cases where a service isn’t performed explicitly by people (as in going to a movie theater), there are still people involved in the service which could dramatically impact your level of enjoyment of the service (think of someone talking the entire way through the movie)

• Intangibility

A service isn’t a product (sorry for the obvious statement!) but it’s true, and because it’s not a product, companies need to be aware of all of the factors that affect a service experience so they can better manage them.

Also in many cases, it’s not a bad idea to try to incorporate some sort of product into the service offering, whether it’s a mint after a dinner out (which actually helps raise the amount tipped due to reciprocity, but that’s a whole other story)

When you go to a lawyers office, often the only thing that shows you’ve had a service performed is a bill! The bill is an excellent opportunity to demonstrate the law firms outstanding practice through appropriate branding, good quality paper, clean minimal design, and so on.

• Perishibility

Once it’s over, it’s over.

When a service has been performed (or hasn’t been performed as in empty airplane or restaurant seats) it can never be sold again. This is important to consider when deciding on pricing tactics like fencing or dynamic pricing to ensure the greatest revenue possible, but is even more important when deciding on how to effectively market the service.

This is because without effective marketing and sufficient brand awareness, missed opportunities directly relate to missed sales.

• Simultaneity

A service provider and the customer cannot be separated. This is the case in haircuts, massages, counseling, coaching, training, even travel which requires the use of both an aircraft (service vehicle) and the crew to operate it.

This is important for business owners because by knowing that simultaneity exists in service businesses, they can look to find ways to reduce lead and load times, focusing on delivering the highest value service without needless waste. Many already do this by default by hiring assistants, front office staff, or administrative support to take bookings, greet customers, and prep them for service.

As you can see when combined with the Marketing Mix elements of product, price, place, and promotion, these service elements help to lay the foundation for a companies overall marketing strategy.

While there are some aspects of the mix that are more important to certain businesses, none should ever be ignored. The better you can describe and define them in the context of your own business the better you’ll be able to serve your customers.