1. Trends from the Best Practices of World Class Service Marketing Organizations
By Al Hahn
Approximately every two years, my company undertakes to determine the best practices
of the world's leading service marketing organizations. We literally search the globe for
the best performers and document their techniques so that readers of our study can
upgrade their own processes. We are currently finishing such a study, to be published in
January of 1998. Out of the dozen case studies being developed, we can detect some
common themes that disclose trends in marketing services that I am reporting in this
article. The companies selected represent many different market segments of high-
technology, including computers, software, medical equipment, broadcast television
equipment, analytical instruments, independent service providers and distributors. That
we should find some commonality among such a diverse group is not entirely surprising.
It is a reflection of marketplace challenges that cut across this broad spectrum of
companies; challenges such as increasing product reliability that makes the need for
service contracts less apparent to customers, and the increasing difficulty of selling
services, whether you are marketing break/fix maintenance or professional services.
Issues like these cut across all segments and have provoked many responses. Our study
identifies the techniques that are working and have proven results. Adapting them to your
situation can help you to avoid the wasted effort of techniques that may not bear fruit and
to swiftly implement solutions that have a high probability of success. While this year's
study is not quite completed, and a few more trends may be identified in our final report,
we have enough information to report on five specific trends:
• Applying product marketing techniques to services.
• Branding services.
• Internal marketing of services and service organizations.
• Niching service.
• Direct sales of services internationally.
Applying Product Marketing Techniques To Services
This is a very important trend that we sincerely hope continues. It is not necessarily
something that marketers set out to do specifically, but is a byproduct of using good
marketing practices and trying to use better marketing communications to coworkers and
customers alike. Probably none of the companies we spoke with said to themselves,
"Let's use product marketing techniques to market services." They just did it in response
to their needs. Having the opportunity to observe several companies using similar
techniques, we are in a unique position to label this trend and report it to you as a
recommended technique.
What do I mean by product marketing techniques? Things like branded product lines
(described in more detail later in this article), packaging, good data sheets and brochures,
articulate presentations, simple and consistent pricing, and good competitive positioning

2. and information. As mentioned, these are all just good marketing practice. So what's the
big deal? Well, we have discovered an amazing result when such techniques are used.
The product sales force responds enthusiastically! Think about it. They are used to
product information flowing to them in certain ways and having some consistency in
approach. When services are marketed like products, sales people understand them better
and are more comfortable with them. We always have the challenge of our services being
intangible. That does not disappear with this approach, but some of the sales force
confusion is dissipated and they respond better. This is not the holy grail, but it is a big
help. Studies and our own experience have found that the major cause of new service
program failures is the lack of buy-in by the sales force. The product marketing approach
can greatly increase your success rate when launching new services. It can also help
improve the effectiveness of marketing and selling of existing programs. Customers are
affected in the same way. Your company probably has a fairly consistent product
marketing approach. Aligning service marketing with product marketing allows you to
gain strength from synergy and leverage from each other's efforts. This does not translate
into a recommendation that you let product marketing take over service marketing.
Experience has found that to have a dismal track record. Just tie into their techniques. Try
it, you'll like it!
Branding Services
One of the techniques mentioned above is branding. This has become such a hot topic
among service marketers that it merits its own special section. While there is still more
talk in the industry than action, we are seeing companies brand their services with
exciting results. The best programs we have seen have established an umbrella identity
and name for their entire service product line. When used most effectively, the company
announces the services product line by name ( Sony Electronics uses SupportNet, Waters
Corporation uses Connections) right along with its branded product family names. This
gives equal weight to services as to products. It also helps to make services more tangible
to salespeople and customers. We have heard compelling testimony from salespeople
who have related that service organizations are finally making their programs lucid and
understandable to the sales channel.
Successful implementation requires work on two levels. Service marketers must craft a
careful, detailed branding campaign. Some important elements include good naming,
consistent reinforcement at every opportunity, inclusion of all or most services under one
umbrella (more than one creates confusion, negating the positive effects), strong
marketing communications and clever packaging. Put the brand on everything! On parts
boxes, brochures, data sheets, hats, T-shirts and Web sites. I haven't seen tattoos on
technicians yet, but I wouldn't be totally surprised! Don't forget to serve some sizzle with
your steak, either. Most service presentations, particularly from executives that have risen
from the ranks, are too factual and boring. Presenting your new program to the sales force
should be accompanied with the same kind of fanfare and fun as other products (see

3. above). The same exciting approach should be extended to PR campaigns, borrowing yet
another product marketing tactic.
On another level, branding strategies require buy-in at the highest levels within a
company. Many CEOs don't truly understand the strategic value of services, and we need
their sponsorship. Instead of the usual 15 minutes at the week long sales kickoff, we need
equal time and status with tangible products. Sales execs have to be on our side for this to
happen. Certainly service marketers can work with their product marketing peers to gain
cooperation, but high-level support is essential, which leads naturally into our next trend.
Internal Marketing of Services And Service Organizations
The need for better positioning of services within companies is well established. What
has been lacking is some good ideas on how to accomplish this. Service organizations
and our leaders are part of the problem. Those of us who have risen from the ranks tend
to be conservative, solid and process-oriented. When we reach the executive level, we
tend to be regarded the same way as accounting executives. Solid and reliable, but not
noted for our strategic leadership. We need help. In an article in this past October's
edition of The Professional Journal entitled "How To Avoid Becoming Roadkill on the
Services Superhighway," I suggested that service marketing could assist us in becoming
more strategic and in selling ourselves and our organization. Working together with our
leaders we can elevate our position in the company and get the attention to our efforts
that we need.
Working with one of our clients to develop a strategic plan for their services
organization recently, we came to the conclusion that we had no hope of achieving the
plan without repositioning the whole services organization within the company. We
would never get the resources we needed, nor the cooperation of different departments.
What we needed, we decided, was an internal marketing plan. This is constructed much
the same as any marketing plan, but is directed at the internal customers, such as
company executives and other departments. By the way, they should be researched much
like external customers, i.e., What are their needs? Most service organizations have
missed this step. They are thinking only of their own needs, not what other departments
might be trying to do. Aligning service with other departments will produce remarkable
results. This does not mean that you actually provide everything they might want. It
means taking the time to understand others in your company and using this insight to
better sell them on your programs. Let them know how cooperating with you will benefit
them and the rest of the company. Generally, sales will want to know how you can help
them sell products. Finance will want to know about your financial contributions. The
CEO will want to understand how supporting service will help him or her achieve their
goals. We all compete for resources. Service organizations can use internal marketing to
better compete and reposition themselves internally.
Niching Service

4. Niche marketing has been around for a while. Recently we have seen it applied well to
service providers, especially in professional services. The key element has been in
deciding what not to do. It is easy for some manufacturers' service organizations: they
just service what the company sells. For others, there has been a confusing array of
opportunities including multivendor service, asset management, systems integration,
consulting and a slew of others. The temptation is to go after too much. This is one
reason that many service providers have failed to successfully launch professional service
programs. It is also one of the reasons that professional services, on average, are about
half as profitable as traditional services.
International Network Services (INS), one of the participants in our Best Practices
study, has niched themselves well. They only provide professional services for
networking applications. As an independent services company, they sell no tangible
products and do not offer maintenance services. Recently named as one of the fastest
growing technology firms in Silicon Valley with over $100 million in revenues, INS has
disciplined themselves to routinely turn away from opportunities that would take them
out of their chosen market. Burrowing deeper into their niche allows them to focus all
their energies and resources very tightly. Given the breadth of networks, it is clear that
they would not have achieved their success without this focus.
In the marketing and selling of professional services, we have learned from experience
that it takes dedicated efforts to succeed. Trying to have the same people sell tangible
products and professional services, for example, does not seem to work. The selling
cycles are different, and so are the buyers. In addition, you can demo products, but that
doesn't work for services. Niching your services makes a lot of sense for some providers,
and we are seeing companies like INS and others forego traditional services completely.
Direct Sales of Services Internationally
As services have gotten more challenging to sell, we have seen many companies
responding by adding both telesales groups and field located service sales specialists. At
first, this was just a U.S.-based phenomenon. Lately we have found some spectacular
successes in other geographies. Despite local objections that "it will never work in France
(or Germany, Japan, Taiwan, etc.)," telesales of service and support contracts is working
just about everywhere that it is being seriously tried. One company convinced their
dubious French counterparts to try it in just one small product area for one month—
December, no less. The results were absolutely convincing—on the order of a 40 percent
increase in this admittedly small market. The same company convinced their German
peers to try a more expansive six-month test, with similar results across a much broader
front.
Oracle has used telesales very aggressively to sell support contracts, to the tune of
millions of dollars per year per person. At the same time, their European counterparts,
who had gone a different route, were very successful using dedicated field-located people
to sell support directly. Recently they have been teaching each other their techniques and
setting up groups in Latin America, the Far East and Europe that are using blends of both
methods. The results have been gratifying and Oracle sells over a billion dollars worth of
support each year.

5. We first noticed this trend to have dedicated sales people sell services a few years ago
when preparing our first Best Practices report. The longevity, extension into other
geographies and growing pervasiveness of this activity cause us to label it as one of the
most significant trends in marketing services today. If you have not tried it, we urge you
to consider it. Telesales, in particular, is relatively inexpensive and easy to set up. Even if
you are not fully convinced it would work for your business, try a test. Chances are you
will become convinced.
Summary
These are not all the trends in services marketing today, but they are good ones. We will
probably identify more for our final report, due out about the time that you read this. I am
pleased to note thatAFSMI will offer the report for sale, and probably at a discount to
members. Give AFSMI a call if you're interested. In the meantime, there are some good
ideas to try in the above material. Maybe we will be reporting on your best practice next
time.