Michael Blumberg is president of Blumberg Advisory Group Inc., a management consulting firm specializing in field service and reverse logistics. In this guest post, he explains the difference between service marketing and product marketing — and why effective service marketing requires a distinct strategy.
Service marketing is one of the biggest challenges facing service managers and executives today. The conventional wisdom is that operational excellence in service delivery will produce more satisfied customers, and thus more sales. But customer satisfaction is only part of the equation. Service providers still need to engage in the basic activity of marketing their companies’ services to current and prospective customers.
However, many service leaders have a difficult time when it comes to marketing their services. This is because much of our marketing knowledge is based on products, but trying to market a service like a product is like trying to hammer a square peg into a round hole. It just doesn’t work. Product marketing has its foundation in the “Four Ps” of marketing: price, product, place and promotion. But services are intangible, which means the “product” component of the service marketing mix is difficult to define.
Service as a Product
To effectively market your company’s services, you need to understand how to define a “service product.” (Hint: it can have more than one meaning.):
- Portfolio: Often described in terms of a service-level commitment, such as 24/7 with a four-hour response time. The more distinctions you can make to define your service portfolio, the more likely you will be to fulfill the needs of your prospective customers.
- Provider: Tangible elements of your service infrastructure, such as your call center, self-service portals, enterprise systems and service technology that make it possible to deliver on the promise of your service portfolio.
- Process: The steps your customer must take to request the service, and the tasks that occur to deliver the service. For example, performing front-end call screening and diagnostics before dispatching a field technician.
- Performance: Evidence that you can deliver on your promise, such as KPIs, customer satisfaction results and customer testimonials.
Customers are not just buying service outcomes. Instead, they are purchasing the underlying infrastructure (namely technology, systems and processes) that make all of these principles possible. As result, these aspects of the “service product” need to be incorporated into the marketing mix.
Service Includes Underlying Technologies
Let me share a real life story to help you understand this relationship. A client was having trouble closing new business with large accounts. Apparently, the company’s prospects perceived that the company lacked the systems to deliver the desired level of service. My client could not understand how their prospects reached this conclusion.
The client, after all, did not spend any time reviewing the company’s IT capabilities. I pointed out that it wasn’t necessary because their prospects could infer this information from the marketing collateral and sales presentations. All the prospects had to do was ask a few basic questions about their service portfolio, delivery process and underlying infrastructure to rule them out as a qualified provider. It was a valuable lesson that caused my client to upgrade the company’s systems and marketing efforts.
Even if your company is a manufacturer and dominates the after-sales service market, it is still important to consider the strategic value of the underlying infrastructure on your service marketing activities. A modern service management system that effectively manages different service levels, improves service delivery processes and measures operational excellence can be leveraged from a marketing perspective to improve perception — and service revenues.
If you’re interested in learning more, view Blumberg Advisory Group’s free, four-part educational series on the keys to successful service marketing.
Interesting article. I’m used to hearing about the 7 P’s of service marketing where the additional 3 P’s are people, process and physical. Aftermarket businesses are particularly challenging because they incorporate all the traditional product marketing needs e.g. for the sale of parts; with the new service ones for the service aspects. The clever bit is how the two are combined into homogeneous offerings for customers and there are a variety of ways of doing this.