Services marketingNOTE: View these pages as Notes Pages for more explanation of the content. The contents of this document remain the copyright of Nicholas Coutts. This document may be copied in whole or in part, provided the copyright holder is acknowledged.
Services marketing Business modelsNOTE: View these pages as Notes Pages for more explanation of the content. The contents of this document remain the copyright of Nicholas Coutts. This document may be copied in whole or in part, provided the copyright holder is acknowledged.
WHY ENROLL IN THE S•O•SSM SERVICESPROGRAM?By enrolling in the S•O•SSM Services Program,a routine sampling interval can be establlishedto build-up a trend of data over time. thattrend allows you to compare sample historyand more easily identify deviations from thenormal trend. This consequently adds value tothe data interpretation process with moremeaningful recommendations andrecommended actions.
IntangiblesComplementary assets 80 per cent of the impact, but only 20 per Quality cent of the costs perceptions Before sales Value service perceptions After sales During sales service service Delivery Guarantees Other Organisation user PRODUCT recommendations Availability Warranties Add - ons Advice Brand name Finance Reputation Corporate Services image Value networks Source: de Chernatony and McDonald
Technical Political Organisational Financial Emotional and social • Barriers to purchase and use are lowered or eliminated by information, experience and by services. • This will tell you if you need to partner with a third party to provide some or all of the services. • Avoid giving away service, in order to sell the product. To sell service, you will need to track time spent on providing services, have a rate card for services and a billing system, to invoice the services. • Note that service marketing is theoretically and practically very different to product marketing. You may need to recruit service marketing skills.
Why blueprint?Ensures the service delivery process matches client requirementsIdentifies required resources people, skills, systems, time, budget, collateralIdentifies up-sell and cross sell opportunitiesIdentifies ways to add valueGets the right people doing the right things at the right time
Why blueprint? 2Enables planning for when something goes wrongEnsures capability and capacity are available to meet the revenue and transaction targets.Identifies minimum time requiredIdentifies the “moments of truth” which need to be managed to ensure the right brand experience Allows the handovers between channels to be engineered
Why blueprint? 3Establishes policy and proceduresIdentified the critical business processesImportant to make the process explicit to customers and partnersImportant for systems design especially customer relationship management systemsA valuable resource for training and communication
The blueprintSwim lanes horizontal swim lanes for each function, department or resource the top lane is usually the customerMoments of truth occur when something involves the customerMicrosoft Visio is a good tool for creating and maintainingthe blueprint document allows spreadsheets to be attached, as required, to show data on time and costThe blueprint may require adaptation for each customer segment
Service types and theircharacteristics Service type Characteristics Professional services Barrier to entry is human expertise Administration and money Financial services management Technical services An infrastructure of technology High volume and based on Consumer services consumer offers
Common mistakes in marketingof services • Lack of differentiation • Services allowed to become commodities • Poor understanding of customer needs • Over-reliance on industry research reports • “One off” services • “Overclaim” • Lack of proposition • Product-led approach • Servility rather than service
The discipline of services marketing Intangibility, Simultaneous consumption, Perishability, American Lack of ownership, Variability, InseparabilityAbout 25 years old Nordic No product, Process outcomes are key French Support, Process, Output • Good application of the scientific process • Related to customer care and customer service • Not well known by industry
How do service differenceschange marketing? • Intangibility • Simultaneous consumption • Perishability • Lack of ownership • Variability • Inseparability
How to address these differences Intangibility brand presence Simultaneous consumption quality of service Perishability capacity planning Lack of ownership control Variability process design Inseparability people selection
Differences in marketing of services Intangibility• Create “presence” through physical things• Brand gives reassurance
Differences in marketing of servicesSimultaneous consumption• Customer care must be real• Service quality: no product to compensate• “Word of mouth”: people talk about experience
Differences in marketing of services Perishability • Capacity planning • Special promotions
Differences in marketing of services Lack of ownership • Value positioning • Environmental design
Differences in marketing of services Variability • Process management • Expectation management
Differences in marketing of services Inseparability of delivery personnel • People behaviour important
A summary of the differences betweenmarketing of services and products • The customer’s need for control • The importance of the service process • The customer learns the supplier’s process • Intangibility of consumption • Simultaneous consumption • Stress makes quality issues more intense • Emotional involvement • The importance of the corporate brand • Interdependency with customer care more intense • Importance of people and their behaviour
Summary of the principles ofmarketing of services Make the intangible tangible. People are part of Turn the corporate the offer. name into a brand. Marketing of services Manage the Manage the corporate brand as a processes. tangible image strategy. Segment customers by service Service must be preference and holistic. emotional needs.
For example: the phenomenon of control • Corporate brand Naive • People • ProcessMarketing to customer • Streamline process Experienced • Deploy technology • Self service The service process takes control from the customer New customers feel vulnerable Experienced customers want to regain control
Case study: Symbol Technologies • Analysed supermarket experience • Created new technology • Compared service • Attracted customers • Reduced costs
Worth reading…Building Routes to Creating Powerful Brands Why Cant You Just Give Building Great CustomerCustomers: Proven Me The Number? An ExperiencesStrategies for Leslie de Chernatony, Executives Guide toProfitable Growth Malcolm McDonald, and Using Probabilistic Colin Shaw and Elaine Wallace Thinking to Manage Risk John IvensPeter Raulerson, 2010 and to Make Better 2005Jean-Claude Malraison, Decisionsand Antoine Leboyer2006 Patrick Leach 2006Managing Hybrid Marketing SystemsRowland T. Moriarty and Ursula MoranHarvard Business Review Nov-Dec 1990