Service Marketing 101: How It Works

Service Marketing 101: How It Works

Tactics for Service Marketing

There has never been a better time to learn about service marketing than now. This is because all over the world a shift has been occurring in the past few decades. The contribution of the service sector to the world economy has increased drastically. In fact, according to Statista, an online portal for consumer and market statistics, nearly 80% of the American workforce was employed in the service sector in 2020.

Service Marketing 101 How It Works

What Is Service Marketing?

To understand what service marketing is, it is essential to understand the meaning of “services”. After all, in the simplest terms, service marketing refers to the marketing of services. 

A service is an exchange where value is provided to the customer without there being an exchange of anything tangible or physical. For example, going to a spa to receive a massage is a service provided by the masseuse. The customer avails the relaxing experience without obtaining anything tangible. 

Any activity or strategy used to market  services is known as service marketing. It is now recognized as a separate subset of marketing. This is because marketing services is different from marketing products.

Let’s look at some of the characteristics of service marketing that distinguishes it from product marketing. 

What Are the Characteristics of Service Marketing?

The characteristics of service marketing originate from the inherent characteristics of the services being provided. These are:

  • Intangible: A service has no shape or physical form, unlike a product. A customer cannot see, taste, smell, or hold a service the same way he can a product. A service is abstract. An experience that the customer can only go through. 
  • Inseparable: The service, service provider, and the customer are inseparable. A product can be separated from the manufacturer and stored for consumption at a later date. However, service is generated at the same time as the customer is receiving it. For example, when a consultant is advising a client. The advice of the consultant is the service that cannot be separated from him and also requires the client to be present at the same time.
  • Variable: Since service providers create the service and no two service providers are the same, services are highly variable in their nature and quality. This feature of services can also be attributed to the highly varied nature of the customers. A product, however, is usually consistent in quality despite the differences between various consumers.
  • Perishable: A service cannot be stored, it has to be provided. It cannot be stocked for use at a later date either. A product, however, can be stored and stocked to be consumed at a later date. This makes services highly perishable.  

Service Marketing and Its Importance

The most challenging aspect of a service is its intangibility. When a potential customer cannot see, hold, or feel what he’s buying, it becomes difficult to imagine its benefits. Further, when the customer cannot see the benefits, they fail to see the value of that service you offer.

What Is Service Marketing

This makes service marketing essential. It allows organizations and companies providing those services to promote their services in a manner that the customer can visualize and connect with. If the companies do not market their services, the customer may not even feel the need for the services that the company provides. 

Role of Service Marketing

Within the business milieu, service marketing plays a critical role. 

Firstly, it is emerging as a differentiating factor between businesses. If competitors offer similar products, marketers can use services offered along with the products to better position their business.

For example, if two electronic companies are offering laptops of similar configuration, one can easily increase their brand value by offering better post-sales services.

Service Marketing

Secondly, services marketing has a bigger impact on customer retention because services can be customized and tailored to the customer’s needs. This leads to the building of trust between the customer and the company.

Further, since the customer is directly involved in the utilization of the service, there is much more scope for a service to not only satisfy but also exceed customer expectations.

What Are The 3 Types Of Service Marketing?

Service marketing can be understood as the interaction between three parties, i.e., the company, employees, and the customer. The dynamic interaction between the three parties involved determines the quality of service. Here are the three types of marketing within service marketing:

  • Internal Marketing: The employees of a company come in direct contact with the customer and are inextricably tied to the service. The process by which a company educates and  trains them to deliver the service is known as internal marketing. 
  • External Marketing: The processes involved in customer outreach, product awareness, and sales are known as external marketing. This aspect also includes the packaging and pricing of the service.
  • Interactive Marketing: This is the stage where the actual delivery of service takes place from the employee to the customer. The success of this interaction depends on the quality of internal and external marketing. External marketing sets the customer expectations and internal marketing decides whether those expectations are met or not. Customizing and tailoring the service to the needs of the customer takes place at this stage too. 

How Marketing and Customer Service Departments Can Collaborate

Gone are the days when the customer service department was far removed from the marketing activities. In today’s business scene all activities are considered opportunities for marketing. Here’s how the customer service and marketing departments can collaborate for greater customer satisfaction and hence business success:

  • The customer service department has information about customer needs and pain points. So, it can assist the marketing department with generating ideas about how to market their services better as well as generating leads for sales.
  • Every marketing department uses the buyer’s persona to target their marketing efforts. The customer service department can improve and enrich this buyer’s persona by providing details and feedback to the marketing department. 
  • When customer services representatives talk to the customers, they get a good understanding of what the customer expectations are and whether or not they are being met. This feedback, if provided to the marketing department, can help in improving marketing messages.
  • The customer service department is not only for complaints but also positive feedback from the customers. It helps to create customer intimacy and collect important insights. This positive feedback regarding customer satisfaction and customer success stories can be used for marketing purposes by the marketing department.

Brief Summary:

  • Marketing of services is known as service marketing. Marketing of services is, however, different from marketing of products. 
  • This is because services are intangible, inseparable from the service provider and recipient, variable depending on the customer, and cannot be stored, therefore, perishable.
  • Services have to be marketed because their intangible nature prevents the customer from imagining the features and benefits that he can potentially receive.  
  • Internal, external, and interactive marketing processes combine to form a service marketing triangle.
  • Customer service and Marketing departments can collaborate in generating leads, enhancing buyer’s personas, improving marketing messages, and sharing success stories. 

Other Resources:

CustomersFirst Academy offers comprehensive customer service training designed to help you grow your skills and advance your career.

To keep learning and developing your knowledge of customer service, we highly recommend the additional resources below:

How to build your professional reputation via email
How to Host a Successful Lunch and Learn
How to Succeed in a Customer Facing Role
Customer Focus: How to Put Your Customers First

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