Marketing Challenges in the
Services Business
- Clients can’t see or touch
services before they purchase them: This
makes services difficult to conceptualize and evaluate from the client
perspective, creating increased uncertainty and perception of risk. From
the firm’s perspective, service intangibility can make services difficult
to promote, control quality, and set price.
- Services are often produced and
consumed simultaneously: This creates special
challenges in service quality management that product companies do not
even consider. Products are tested before they go out the door. If a
product has quality problems while in production the company can fix them
and customers are none the wiser. Service production happens with the
customer present, creating a very different and challenging dynamic.
- Trust is necessary: Some
level of trust in the service organization and its people must be
established before clients will engage services. This is as important,
sometimes more important, than the service offerings and their value
proposition.
- Competition is often not who
you think: Competition for product
companies are other product companies. Competition for service companies
are often the clients themselves: Sure, sometimes you find yourself in a
competitive shootout (some firms more than others), but often the client
is asking ‘should we engage this service; at all’ and ‘if so, should we
just do it in-house’.
- Brand extends beyond marketing: Brand
in service businesses is about who you are as much as what you say about
yourself. And internal brand management and communications can be equally
as vital to marketing success as are external communication.
- Proactive lead generation is
difficult: Many service companies have
tried, and failed, at using lead generation tactics that work wonders for
product companies. Implemented correctly, traditional product techniques,
such as direct marketing and selling, can work for services, but the
special dynamics of how clients buy services must be carefully woven into
your strategy.
- Service deliverers often do the
selling : Many product companies
have dedicated sales forces. For services, the selling is often split
between sales, marketing, professional, and management staff.
- Marketing and sales lose
momentum: Most product companies
have dedicated marketers and sellers. They market and sell continuously,
regardless of the revenue levels they generate. In many services companies
the marketers and sellers also must manage and deliver. This can often
lead to the Services Revenue Rollercoaster-wide swings between revenue and
work overflow, and revenue and work drought.
- Passion is necessary yet
elusive: The more passion, spirit,
hustle, and desire your staff brings to the organization every day, the
more revenue and success you will have. The correlation between staff
passion and financial success is direct and measurable
