Service marketing, as the name suggests, refers to efforts to promote and sell intangible services, as opposed to tangible products.
Lawyers, architects, insurance providers, and management consultants are examples of professionals that traffic primarily in services. In addition to intangibility, services are distinct from products in that the production and consumption of services are inseparable, inherently variable, and perishable. Using these four distinguishing characteristics follow the four primary objectives of service marketing: building trust, empowering service delivery personnel, establishing uniform processes, and promoting customer satisfaction.
Since services are intangible, determining value and quality can be difficult. This is particularly true for services such as insurance, which may be purchased years before any benefit other than peace of mind is realized. As such, service customers look for tangible signs of quality to make purchasing decisions.
Building trust in customer's eyes through tangible signs of quality is one of the principle objectives of service marketing. Cynthia Coldren, managing partner of ReThink Marketing, identifies several tangible indicators of quality and value, including "personal interaction, trusted recommendations, clear communications, equipment used or processes followed, pricing, and the physical environment in which the business operates."
The production and consumption of services are inseparable, meaning that a customer's experience of a service occurs simultaneously with its delivery. As such, service delivery personnel play a critical role in customer satisfaction and retention. Service marketing should focus on empowering these key players to ensure that they are able to communicate effectively with customers, respond appropriately to feedback, and instill confidence throughout the service delivery process.
As Jeffrey Tarter, executive director of the Association of Support Professionals, notes, "Our perception of the service company’s people largely defines how we feel about the service itself."
Establishing Uniform Processes
The provision of services is inherently variable, since each instance is distinct from all others, varying by service delivery personnel, the circumstances of delivery, and the service environment. In order to minimize variation, service marketers must establish uniform processes to provide consistent delivery services.
Cynthia Coldren recommends service marketers achieve consistency by developing special service packages tailored to the differing levels of service required by differently situated customers. Additionally, she suggests that service marketers can overcome customer concerns about consistency by leveraging case studies and positive customer recommendations to build trust, by responding quickly to remedy customer complaints, and empowering personnel to make customer-focused decisions.
Promoting Customer Satisfaction
Services are perishable, meaning they cannot be stored for later use. If the ticket you purchased for a concert goes unused, its value is lost. Greg Clarke, managing director of Smarter Marketing Ltd., suggests that the transient nature of services requires service marketers to manage the peaks and valleys of supply and demand to ensure optimal business performance. According to Clarke, the best way to manage variable demand is by cultivating repeat business from satisfied customers.
Kim Gordon, marketing coach at Entrepreneur.com, points out, "it costs considerably less to keep a customer than to win a new one," so promoting customer satisfaction should be a primary goal of service marketers.