Many services businesses are small (such as shoe repair shops and hair salons) and don't use formal marketing techniques. There are also plenty of professional service businesses such as accounting and law firms that thought it was unprofessional to use marketing, and some still do, but this is changing.
The classic four Ps marketing approach works well for physical goods, but service companies need to pay attention to additional elements. Marketing gurus Boon and Bitner identify 3 additional Ps for service marketing:
- People: If the service you offer is provided by people, then the selection, training, and motivation of your employees has a huge effect on customer satisfaction. Employees should be competent, caring, responsive and have problem solving abilities. See our articles on managing people well for tips in this area.
- Physical Evidence: As a service company, you need to demonstrate your service quality through physical evidence and presentation. For example, hotels develop a look a visible style of dealing with customers that projects the desired image and value, such as cleanliness or speed.
- Process: You can choose among different ways, or processes, for your service company to deliver your service. For example, restaurants have developed different formats such as cafeteria-style, fast-food, buffet, and candlelight service.
Differentiating Your Service
Service marketers sometimes complain about the difficulty in differentiating their services. For example, a dentist office might wonder how it can differentiate itself from other dentists. It might be tempting to compete on price, but this often ends up hurting business more than helping because competitors will cut prices to match. An alternative to competing on price, is to develop a differentiated offer, delivery, image and/or quality.
- Offer: The offer can include innovative features. What customers expect is called the primary service package, and to this, you can add a secondary service feature. A coffee shop might offer free internet access and comfortable couches as secondary services.
- Delivery: A service company can hire and train better people to deliver its service, a more attractive physical environment or design a quicker delivery process.
- Image: Service companies can also differentiate their image through symbols and branding. If your company is reputable and provides a valued service, use a good logo and symbols to help customers associate high quality to your services.
- Service Quality: You can win over the competition by delivering consistently higher-quality services and exceeding customer expectations. These expectations are formed by their past experiences, word of mouth, and the messages you deliver through advertising. If you don't meet or exceed customer expectations, your customers will lose interest in your services.