According to the US Census Bureau, in 2013 revenues grew in each of the 11 service sectors in the United States. It’s no surprise that we live in a very service-based economy. Since we are more likely to work for, work with, or own a service organization than ever before, how does marketing a service differ from marketing a good?
Whether I am working on marketing tactics for my own service-based photography business (Prenzlow Photography), consulting with a service owner, or teaching students about marketing services, I have always started with the discussion of the Four “I’s” of Service Marketing.
- Intangibility—can’t touch it.
- Inconsistency—can’t do it the same every time.
- Inseparability—can’t separate it from the provider.
- Inventory—can’t hold onto it.
Every marketing strategy for a service should begin with these differences. However, the tactics used to better manage these differences can vary widely.
Branding: In this era of media clutter and short attention spans, branding is more important than ever for every organization. However, it is even more crucial for intangible services. How can a service share its story and develop a connection with consumers? Tactics may include everything from logo design, to social media content, to a charismatic spokesperson. Since consumers make most decisions emotionally, a service provider needs to continuously consider how to transform its intangible offerings into feelings and memories that consumers can connect with.
Pricing: Why is a $100 haircut better than a $10 haircut? Objectively it may be no different at all, but perceptually it sure is. Properly pricing services should not only increase the tangibility through perceptual value creation, but also manage the idle service capacity that arises from the inability to hold inventory. Due to the associations and consequences of setting prices, it is my opinion that pricing is the most difficult elements of the marketing mix.
Process: Can an intangible massage or haircut achieve the same level of production consistency as a tangible car or smartphone? Due to the variability of employees providing the service and the diversity of customers receiving the service, that level of manufacturing consistency is very difficult to achieve. However, through employee training, standard operating procedures, checklists, and CRM tools, a level of consistency and quality can be improved within very a dynamic service environment. Just walk into any successful service-based franchise to witness many of this processes in action.
People: Not every service has employees. However, businesses that do employ a staff need to realize the immense power of these employees to make or break the organization. A simple concept to understand and a more difficult concept to put in action is the “Service Profit Chain.” In summary, employees who are treated well by their manager or supervisor or more likely to treat customers with the same level of respect. Due the inseparability of a service, these forward-facing employees ARE the service and are exactly what the customer will evaluate.
Literally hundreds of additional marketing tactics focus on better managing the Four “I’s” of Service Marketing—uniformed employees, customer-service training, clean bathrooms, transparent processes, off-peak sales promotions, checklists, and many more. There is nothing revolutionary about this concept, but every service-based marketer should remember to evaluate strategies and tactics against this model.
Here is a short video I produced for my Principles of Marketing class that explains this concept in a bit more detail.
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