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how the marketing of services differs from products

 

marketing of services

by Kenneth Rudich

Are you aware of how the marketing of services differs from the marketing of products?  Especially as it pertains to marketing communications?

the services marketing difference

According to marketing consultant Donald F. Blumberg, perception plays a substantial role in analyzing or evaluating the quality and performance of a service. 

This is partly because services cannot be inventoried, nor is it physically possible to measure (and possibly dispute) quality, performance and functionality before the purchase as one might do when buying a hard good product. 

ability to serve

The process for evaluating a service prior to purchase puts an added emphasis on the criteria of “ability to serve,” which tends to rely more on the perception of future performance fulfillment probability than it does on present moment reality.

Establishing “ability to serve” involves both an internal and an external communications component.  The internal component relies on having the apparent resources and capacity needed to achieve fulfillment.  The external component involves creating a perception that the internal resources will indeed fulfill the external promise they represent.

Communicating the promise of fulfillment means practitioners must frame their words and images to reflect the value satisfying benefits of the service from a customer perspective.   Note that this is quite different from simply telling the customer about the features or attributes of the service (what you have).  Rather, it’s letting them know what they’ll get from it.  It’s about clearly bridging the connection between the internal inputs and the external outcomes in a way that is meaningful to the customer.

For instance, a utility company may have a back-up system that will kick-in if the primary system fails.  The communication objective for the customer, however, is to reinforce “ability to serve” by using that feature to explicitly support the perception of continued or uninterrupted service reliability in the face of a primary system failure.  That’s the benefit to the customer of having that feature, and it may be a key selling point for the customer.

actual service provided

In addition, says Blumberg, performance results must be continuously shared with everyone interested in or affected by the provider’s activities, with the provider offering evidence it has achieved the outcomes the inputs promised. 

This advice reflects the other critical facet of communications for a service enterprise: “the actual service provided.”  It poses the question of how well “the actual service” squared with the perceived “ability to serve?”  Did it fulfill its promise?

If a gap exists between “actual service” and the perceived “ability to serve” (where the outcome does not fit with the promise of the inputs and resources), then the provider must give an assurance the gap will be closed during future service performance (assuming you’ll be given a second chance). 

If no gap exists, then the provider must reinforce its ability to replicate the same service quality and performance.  This is shown in the above graphic as a closed loop cycle that continually repeats itself from past to present to future.  It is worth noting that this task can become more challenging as the provider enterprise matures.

Once a provider appears to have things well in hand, customers frequently grow to feel that an even greater measure of attention should be focused on them and their needs.  It is possible, therefore, that the definition of satisfactory performance can change within a given cycle. 

For instance, while current performance during “actual service” may be regarded as acceptable, the performance stipulations for “ability to serve” may in the meantime be ratcheted up or modified, thereby impacting the requirements for the next “actual service” period. 

This is especially commonplace in a competitive or rapidly changing environment, such as the video rental industry, where customer needs and expectations are subject to change with time and/or across the value chain.  It is the reason a business should regularly perform a market opportunity scan, and pay particularly close attention to the potential for pinpointing upgrades or value-added benefits.

perception, not promotion

With “ability to serve” and “actual service” playing such a critical role, perception replaces the old function of promotion, and it includes everything that can impact a customer’s view of value. 

As such, a finely polished brand image hinges on more than just carefully crafted names and messages.  It is comprised of what is seen, experienced and conveyed across the value chain as a whole.  Every component of it communicates something about the quality and performance of the service, and each must be managed to foster the kind of perception a provider would like to cultivate. 

In a sense the value chain is like implementing a “one-stop-shop” approach for delivering value fulfillment.

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