Strategies For Service Marketing
Service marketing strategies are the marketing strategies used for service products. To satisfy customers the service organizations should provide services as desired by the consumers.
Since the service is intangible, it is very difficult to adopt suitable strategies and measure the level of satisfaction of the customers. However, if you own a service business or just want to know, the following marketing strategies are essential to follow for service products as well as service companies for the effective marketing of service offerings.
- Service profit chain
- Managing service differentiation
- Managing service quality
- Managing service productivity
- Management of people, physical evidence, and processes
The Service-Profit Chain (SPC)
The service-profit chain stresses the importance of people – both employees and customers – and how linking them can leverage corporate performance. It is a framework for linking service operations, employee assessments, and customer assessments to a firm’s profitability.
The SPC provides an integrative framework for understanding how a firm’s operational investments in service operations are related to customer perceptions and behaviors, and how these translate into profits.
More than 10 years ago, James L. Heskett, W. Earl Sasser, and Leonard A. Schlesinger created positive awareness about “The Service Profit Chain”, which is generally summarized as happy employees create happy customers create happy shareholders.
The Service Profit Chain is a great way of illustrating the correlation between employee satisfaction, customer satisfaction, and profits. It’s true; customers tend to have a better experience with organizations that have higher levels of employee satisfaction and engagement.
The service profit chain model of business performance enacts relationships between profitability, customer loyalty, employee satisfaction, employee loyalty, and productivity.
More specifically, the SPC strategy for service marketing can be understood as below:
- Internal service quality drives employee satisfaction.
- Employee satisfaction drives employee loyalty.
- Employee loyalty drives employee productivity.
- Employee productivity drives value or external service value.
- Value drives customer satisfaction.
- Customer satisfaction drives customer loyalty.
- Customer loyalty drives the growth and profitability of the firm.
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Managing Service Differentiation
Next, one of the important strategies for service marketing is managing service differentiation. How do you differentiate your services from those of the competitors?
It is easier in products where variables are tangibles but pretty different in the case of services. When the physical product can be differentiated easily, the key to competitive success may lie in adding valued services and improving their quality which is the outlook of service differentiation.
The major factors that can be used for service differentiation are:
- Make ordering products easy: Making ordering products easy refers to reducing complications associated with placing an order with the company. It is one of the key ways to differentiate your service from your competitor.
- Quick Service Delivery: It is related to how well the product or service is delivered to the customer covering speed, accuracy, and customer care.
- Product Installation Service: It refers to the work done to make a product operational in its planned location. Buyers of heavy equipment expect product installation service.
- Customer Training: It refers to how the customer’s employees are trained to use the vendor’s equipment appropriately and efficiently. For example, General Electric not only sells and installs expensive X-ray equipment in hospitals but also gives extensive training to users of this equipment.
- Customer Consulting: It refers to data, information systems, and advising services that the seller offers to buyers.
- Helping Customers in Maintenance and Repair: It describes the service program for helping customers keep purchasing products in products working order, an important consideration for many products.
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Managing Service Quality
Third, one of the important strategies of service marketing is managing service quality. Service quality involves a comparison of expectations with performance. It is a measure of how well a delivered service matches the customer’s expectations.
The primary reason to focus on quality is to meet customer needs while remaining economically competitive at the same time. Satisfying customer’s needs is paramount for the enterprise to survive. The outcomes of using quality practices are:
- Understanding and improving operational processes.
- Identifying problems quickly and systematically.
- Establishing valid and reliable service performance measures, and
- Measuring customer satisfaction and other performance outcomes.
Criteria of Service Quality:
Word of mouth, personal needs, and experience create an expected service. The perceived service will be compared with the expected service by the customer and leads to the perceived service quality as a result.
Between the expected and perceived service can appear a gap if the perceived service does not match with the expected service. Factors that influence the appearance of the gap are shorty mentioned below:
- Tangibles: It refers to the physical evidence of the service. It includes the appearance of physical facilities, tools, and equipment used to provide the service, the appearance of personnel, and communication materials.
- Reliability: It is the ability to perform the promised service dependably and accurately. It is related to the consistency of the performance and dependability.
- Responsiveness: It refers to the readiness of the organization’s employees to help customers and to provide prompt service, timelines of service, mailing a transaction slip immediately, and setting up appointments quickly.
- Assurance: The knowledge and courtesy of employees and their ability to convey trust and confidence to customers are defined as assurance. It includes courtesy, competency, trustworthiness, and security.
- Empathy: It is the provision of caring, individualized attention to customers, informing the customers in the language they can understand, understanding customers’ specific needs, providing individualized attention, etc.
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Managing Service Productivity
Fourth, one of the important strategies for service marketing is managing service productivity. The productivity of a process is related to how efficiently input resources are transformed into value for customers. For the needs of manufacturers of physical products, there are widely used productivity concepts and measurement instruments.
However, in in-service processes, the underlying assumptions of these concepts and models do not hold. For example, manufacturing-based productivity models assume that an altered configuration of input resources in the production process does not lead to quality changes in output (the constant quality assumption).
However, in a service context, changes in production resources and production systems do affect the perceived quality of services. Service productivity is a function of:
- How effectively input resources into the service(production) process are transformed into outputs in the form of services (internal efficiency),
- How well the quality of the service process and its outcome is perceived (external efficiency or effectiveness), and
- How effectively the capacity of the service process is utilized (capacity efficiency).
Management of People, Physical Evidence, and Processes
Fifth, one of the important strategies for service marketing is managing the additional 3Ps of the marketing mix. For effective marketing programs, service-based businesses need to manage and integrate these additional 3Ps of the marketing mix properly.
When we talk about the “people” element of the marketing mix we are talking about the two groups, below:
Service Personnel: A marketer always should make his service personnel customer-oriented and loyal to the customers. Service personnel should always try to provide quality services and make customers delighted. For this, the marketer needs to motivate service personnel by providing them with better facilities, sales orientation, and training from time to time.
Customers: A marketer should always try to establish a good relationship with the customers. He should treat them as good friends and seek to develop an everlasting relationship from a strategic point of view. The shift of an existing customer towards a competitor may cause a huge loss for the company, hence, establishing a good relationship with the customer is crucial to retain them.
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Physical evidence is also becoming more important to all organizations. Physical evidence or atmosphere consists of:
- Maintaining proper office room conditions,
- Better office furnishing,
- Attractive office layouts,
- Provision of customer complain box,
- Lighting and ventilation system in the room,
- Appropriate office sizes,
- Provision for a waiting room for customers,
- Association of many services that the customer demands over time.
Such an atmosphere may impact the psychology of the customers. If the psychological impact is positive, it may promote business opportunities and vice versa.
More specifically, physical evidence describes keeping office premises resourceful and comfortable to motivate the customers. It also improves the level of efficiency of the office personnel in their work performance, which makes them capable of satisfying customers.
Service organizations are increasingly getting innovative and operations management ideas are now an essential input to their control of cost, systems improvements, and levels of customer service. The general principle is that the service delivery process should be short and simple.
There are two major aspects of the process element of the marketing mix, which have a strategic dimension, they are:
Degree of Customer Contact: Marketers should try to reach customers from time to time even after the products are sold to them. Customer contact is critical as marketers need to understand the customer’s reaction to the company’s products or services. This effort may make the customers more loyal to the company, salespeople, and the company’s offerings.
Quality Control Standards: Most customers prefer to buy products or services from companies, which are capable of maintaining the upgrade standards of the products and services. Because customers always give preference to the quality of products or services. Quality can be maintained not only on the products, but also on the production process, information processing, and purchase of quality raw materials.
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