As marketers, are products and services any different? Well, to answer this in one word – Yes.
However, let’s answer the broader question – what is services marketing?
A Service might be an activity or benefit passed on which is intangible and does not translate to ownership. Banking, medical care, hospitality, travel, retail, IT, advertising etc are just some of the most crucial forms of services out there.
Products also include related services and value-added benefits that helps people solve their problems. However, in this article I would be focusing more on the ‘Services’ aspect.
Moreover, in India services are an integral part of the GDP as the services sector develops vigorously over the last few years. There are services out there on offer by the government such as schools, hospitals, courts, postal services etc. Private companies offer other essentials like airlines, banks, consulting, insurance, real estate, delivery services etc
I will elaborate more on how services in marketing is an entirely different ball game.
In order to understand how marketing works for services, you should take a look at vital characteristics of services.
Intangibility of Services
This means that consumers don’t get to see, taste, feel or hear – basically try out the services. How do you decide on the efficiency of such services?
You simply rely on factors such as reviews, or signals of quality to be sure.
Say you want to try a new airline (Vistara) for travel. You can only purchase a ticket and hope that your flight is on time and luggage is handled safely.
Variability of Services
Variability is when there are a lot of providers for a single service. It depends on ‘who’ provides it as well as 'where, when, and how' they provide it.
Consider the buffet services at any good restaurant.
In Kolkata, I might prefer Barbeque Nation over Absolute Barbeque because their service is fast, humble & it has multiple outlets. Similarly, you might prefer the later for its volume and variability of dishes.
Inseparability of Services
If the services are produced and consumed at the same instant, this is Service Inseparability.
For example, you go to a salon for a haircut.
Can you just avail the service without the barber (who produces it)? This results in provider-customer interaction that plays an active role in determining service quality.
Perishability of Services
Perishability is when one cannot have ownership like products, they merely consume it. Consumer demand drives the strategic decisions of a service-provider due to its perishability.
Does your doctor allow you if you book an appointment and don’t show up on time?
There are hospitality services like hotels and resorts that pitch their offerings on a limited basis based on season or demand.
Probably, now you might have a clear idea about what is services marketing.
Additional 3P’s of Services Marketing
To start with, the marketing mix is a key foundation that helps you draw a marketing plan for product/service. For products, the 4P’s (Product, Place, Price, Promotion) hold good while for services, it extends to 7P’s.
While the initial 4Ps have similar connotations for services just like products, the three additional P’s for services are critical.
Let’s dive deep into the 3 P’s to gain more insight on what is services marketing.
When I refer to ‘People’ in services – I am talking about the employees. Ones who deliver the service in any form are key to determining quality service experiences. That’s the first form of interaction a user has while availing a service.
Imagine that you run a customer grievance redressal service.
If the customer representative patiently hears out complaints and gives solutions politely, that adds to the brand equity of your service.
However, grumpy, unwelcoming, and cold behaviour from staff at any mall, hotel, bank etc ensure their services have lesser share of consumers.
A process for a service describes the set of events that take place to execute the service. You would love a quicker, hassle-free, and simple process while availing any service.
For example, you urgently need two or three items from your nearest supermarket. You find that you need to stand in a queue for 30 mins to get them billed. Further, the payment is restricted to cash while you love to transact digitally.
These red flags ensure you would switch your choice of supermarket soon.
Ideally, a brand should streamline and optimize the processes. Like the sales funnel for that service at every point. That’s how services gain trust and loyalty of users.
It is essential for consumers to know that the brand they’re purchasing from actually exists.
Thus, this validation essentially refers to visual aspects or quantifiable features of your brand.
Your website, your logo, business cards, brand merchandise for your service would serve the essential purpose. Ambience, spatial layout, and the environment where the service is consumed determines this peripheral aspect.
That’s why there is an emergence of theme-based restaurants and cafes these days. People love to get a feel of the ambience and co-relate it with the quality of service they expect.
I hope these 3 additional P’s are helping you find the broad answers to the question – what is Services marketing?
Branding a Service
As discussed above about various aspects of services, let’s see how you can go ahead branding a service.
There are challenges you face in case of branding a service over a product because of the following –
- Services are delivered and irreversible while products are bought & can be returned.
- The services provide intangible experience while products are tangible.
- Services cannot be owned and do perish if not used on time.
Can you really control quality while dishing out services? If you’re a big player in your industry, you might say Yes (like Jio in telecom, Amazon in online retail). Practically, it’s quite complex.
Do you observe how quality gets compromised at restaurants or banks if there are a lot of customers to attend? A human aspect of error creeps in gradually.
Can you fix that by increasing work force for these seasonal demands?
You can only hope to build a consistent reputation over time and establish your brand.
Again, time utilization is crucial for services.
Say you own an equipment repairing service. If you sit down with one user for longer than usual as they might have lots of questions or doubts, you lose out on business and serving more people at the same time.
Again, catering to your users is key for increasing the trust in your brand. It is a fine line that you tread on to brand your service.
As a brand, you can ensure quality & hassle-free interactions with users at every touch-point of the service. You can attract users with offers and bundling services. Provide a stimulating ambiance if your main offering isn’t the best to retain users. Train the employees and service providers to treat customer as ‘king’ and delight them with warm gestures.
Classification of Services
I have tried to classify the services out there based on their salient features and their deliverability. The services can be either tangible or intangible; people-oriented or product oriented.
- People based services - It refers to the services which require the user to be present while the service is delivered.
For example- To enjoy a comforting massage or spa experience, you must be physically present to avail it.
- Product based services – This kind of services requires no or limited presence of the user, and rather are based on products. This is more of Service as a process offering.
Say, you want to get your lawn cleaned or your AC serviced. People might visit your premises and get it done. The user can afford to be not involved in such cases to avail services.
- Stimulating Services – The services which affect one’s mental growth as well as behaviour and perception are stimulating services. It requires only mental presence of the user.
You might need counseling sessions or therapy to get over depression. You visit a theater to broaden your creative horizons. Religious or educational institutes if they offer such services also fall under this category.
- Information Processing Services – These are the services which work on the assets or information of users.
Here information is processed for user requirements with a certain level of risk here. For example, Information technology firms, banks, insurance services fall in this category.
These classifications might further enlighten you about services and elucidate what is services marketing.
How to make an effective strategy for services?
Broadly, you can follow these steps to make sure your services are perceived as quality in consumer minds.
- Effective hiring - The employees must possess right skill sets which meets the goals of the organization. It helps if you cater to exact needs and deliver the service promptly. Pleasing interactions with users to build a connect with them is not an inherent skill.
- Imbibe a Service vision - Clearly communicate the vision of the service to the employees regularly.
- Accountability – As a service-providing firm, you must take full accountability of the offerings. If services are not as promised, one must simply make up for it instead of suppressing the same. Social media bashing of services is a common trend these days. Remember, the users can switch at an instant to a plethora of other available options.
- Service Excellence – One way to retain your set of consumers and ensure loyalty is to uphold sheer excellence. A service should be consistent, fast, and effective. Meet your deliverables and you’re rolling.
Just look at how Amazon is the most-trusted online shopping website due to its impeccable service and on-time deliveries.
Do go through : SWOT Analysis of Amazon
- Internal service quality – Superior employee treatment is essential for continuous excellence in services. Keep your employees happy and half the job is done.
Recently, Swiggy declared that they would take the tab for vaccinating their 2 lakhs delivery partners. This elevates Swiggy’s brand equity as well its pursuit of service excellence.
How can Services Differentiate themselves?
Today, being a service provider is challenging proposition given there is no dearth of similar providers. Users can just flock to a service whichever is convenient at that moment.
Let’s analyze through examples how services can differentiate themselves.
Service firms can stand out by consistently delivering excellence and higher quality experiences over time. Ex- TCS in the IT sector encompasses trust and reliability.
Information processing services like banks can streamline their processes to deliver a superior experience. Opening a bank account and managing finances has become completely digital nowadays through applications. Banks like Citi Bank which reduce the physical visits for users through seamless internet banking leads to service differentiation.
Food delivery and online retail services offered by likes of Zomato, Myntra, Amazon attract millions of users by their discounts and offers. They find a way to have sales all throughout the year and reduce delivery times to enable more orders.
Similarly, a pro-active and concerned customer feedback and redressal system helps a service stand out. If you promise to resolve an issue or ticket within 3 days, make sure you keep the promise. Example – Indigo air lines keeps sending mailers and SMSs asking for feedback and experience after taking flights.
Streaming services have found lot of success when they offer 1-month free trials like Netflix, Amazon Prime had.
Most users might not renew; however, the streaming platforms get the chance to impress users with their excellence. Social media presence of such services in taking user recommendations and adding content accordingly helps the cause.
In this article, I delved into how the services differ from products and how marketers can adapt accordingly.
Services being intangible and time-bound pose challenges for users to evaluate its quality. You can only build reputation as a services brand over a long stretch of time. One small mistake or non-delivery of promised actions would dent the brand severely.
Marketer must consider the various characteristics of service like perishability, variability, & inseparability. Why? Because these dimensions help you analyze where one can add value and excellence for users.
Moreover, physical evidence, the entire process as well as the people delivering the service are key components. One can have great service quality, but cold, amateur personnel or complex methodologies can sour the whole experience.
I also talked about methods that would help plan strategy for services.
You must realize the service profit chain which includes satisfied and efficient employees as non-negotiable elements. Give your users delightful experiences, offer more than promised and satisfy their innate needs with services. This would build a great brand equity for your company.
Open your mobile and list down the services offered by the various applications involved. Benchmark them with the parameters you learnt in this article. I am sure you must have got great clarity on the question – What is services marketing and how it works.
Go ahead and tell us which service-providing firm is your favorite and why!