Service Marketing Meaning
Service marketing by definition is different than general marketing. When you sell a service you are basically telling your audience: buy something you will never own yourself.
So then what are you actually selling?
Usually, services are purchased based on the perceived value they’ll provide and are generated thanks to professional skills worth the investment. From a buyer’s point of view, the skill competency level itself doesn’t really matter, rather the end result produced by those skills. For example, an online advertising campaign can be optimized manually by an expert or by technology tools. As long as the result of the two actions are the same, the service will say “online advertising optimization”.
As a result of being defined as a value, service marketing means you need to build a high level of trust with your audience, for them to feel comfortable enough to sign the contract and trust you to hold the skills required to deliver the promised value.
In addition, delivering a service usually includes a higher level of human interaction, as opposed to a one-time transaction when buying a product (especially if purchased online). That’s not entirely accurate of course, because a service is included in each transaction, however, when talking about services as the product, the interaction and work process is much more prominent and is perceived as part of the value the customer is expecting.
5 Service Marketing Challenges And Tips
The unique definition of service marketing presents five main challenges one needs to address when planning his/her service marketing efforts:
As mentioned above, trust is one of the main building blocks of service marketing. When marketing a product, your main reason-to-believe is the product itself. People can see or even feel the product, read its legal assurances, go through its features or ask for a demo. When marketing a service, all you have is… words. The best way to create trust then is by using other people’s words about you.
Using customer testimonials is probably the most effective way to do that, and in the case of service marketing, the more, the marrier. Try to get customers that are as similar to the audience you are targeting, a.k.a your buyer persona. People tend to believe and empathize with people similar to them.
Service verification awards or badges can help too. There are various websites that have already gained a high level of credibility and brand awareness that can verify your product, depending on your industry. The most well-known ones in the marketing industry, for instance, are the Google and Facebook Partner badges (respectively).
While what your service is selling is the desired end result, the elements of the process that get you there are definitely part of your value proposition. Service process features like flexibility, responsiveness and kindness can sometimes be so important that you can use them as your main marketing differentiating values.
Usually, delivering the end results of service takes longer than your average product sale and involves a lot more personal interaction. Your customer is expecting to be kept informed on how your service is coming along and not just waiting in anticipation for the end result. Establishing clear communication channels to support your customer relationship is the key solution. This can be done by simple email/phone updates or via designated software tools and solutions.
Service at its core is customizable. The challenge is knowing how to customize enough so that the client will be satisfied, while still maintaining service scope borders and structure. Basically, there is a limit to how much you can “bend over backward” for a customer, but when marketing service they will expect some flexibility. Your service limits might be based on:
- The quantity you promise to deliver while maintaining your professional standards - even a dog walker has a limited no. of dogs, they can manage all at once.
- Pricing modifications you can afford to fit your customer’s budget/ expectations while still maintaining a positive return.
- Desired vs. realistic work pace - when it comes to timeframes the clients will always prefer the service to be completed as soon as possible (meaning now), and it is up to you to decide how soon, will really be possible. Even if you decide to speed things up, your custom deadline must be attainable.
Service end results can be vague. Defining and agreeing upon the desired results is a necessity in order to avoid disappointment. However, when marketing a service, keep in mind that the work process itself is of value all on its own. This process should be included in your value definition and marketing, so it is not commonly overlooked. In fact, many times during the value definition process, you learn new things from your customers’ experience and might decide to change the goals of your project. In that case, it is important to have a meeting to discuss the new goals and how change may affect the process, expectations and work scope.
- Presenting your service as the solution to their problem is the best way to trigger the emotional response that gets your key audience to sit up and pay attention.
- Highlighting the main stages of your service’s process as milestones is a way of conveying the value of your work process beyond the end results.
Service Marketing Importance
Services differ from each other at least as much as products do with their own features and qualities. In a highly competitive and saturated services market, marketers need to differentiate themselves from the competition and attract consumers.
The factors that differentiate your service from a competitor can be extremely impactful on the buyer’s decision making and those are the ones to keep in mind when planning your service marketing. Some examples of service differentiation factors that influence the buying decision are:
- Affordability - finding the right price range that your customers will consider acceptable for your services (and you consider profitable for your efforts)
- Functionality - simply put, that your service and value promise best fit your customer’s needs.
- Credibility - as mentioned above, since service is intangible, a large part of the customers’ buying decision will depend on how much they trust you.
- Experience - in the particular service you are offering, no. of years in the field for instance.
- Convenience - how accessible and easy it is for your customers to use your service.
- Variety - customers love the ability to choose, but be mindful to define the right balance between too little and too much.
- Self-service - how much of control your customer has over their service experience, what they can and cannot do for themselves.
Customer profiling can provide the factors influencing the buying decision in your market for your type of service. This research is accomplished either by questionnaires, polls, designated tools or external service providers.
Service Marketing Strategy
Service marketing strategy, like any other marketing strategy, must begin with a deep understanding of your customers, your service’s strengths and competitive advantage.
Understanding your customer
Build customer personas, mapping what might influence their purchase decision. This can be anything from gender to age range and profession. It should also include a review of your customer’s common pain points, possible obstacles they need to overcome to complete a purchase and how your service solves these. Don’t forget to include information about possible contact points - where and when you are most likely to reach this or that persona (yes, there can be more than one).
Your service’s strengths
This should include the end results your service promises to deliver as well as the quality offering of your process getting there. As mentioned this can include a mixed array of characteristics: affordability, functionality, credibility, expediency, and flexibility.
Your service’s competitive advantage
It can be uncovered using the known S.W.A.T analysis to map where you are positioned compared to your competition and where your opportunities to shine above them may reside.
A service marketing strategy is not complete without defining your positioning. Most commonly known as the 4p’s it has since expanded to 7’ps to include service marketing positioning parameters (and there is even talk of an 8th…) that define how your service is presented.
The Service Marketing Mix
What are the 7p’s of service marketing?
Your key service offering, the solution you provide that solves your customer’s needs. The attributes of your service on their own and in comparison to competing service providers should be included under the scope of this section and are the basis on which to build your service marketing strategy.
These can include design, technology, UI/UX, perceived usefulness, securities and so on.
Price is a key decision that will influence both customer acquisition and subsequent satisfaction. You will need to be aware of your target audience’s price sensitivity range (and what prices your competitors are offering). While the price is often taken as an indicator of quality in general, price perception is heightened when it comes to an intangible service. It’s like putting a price on happiness, where happiness is the result of the service you provide.
- Common service price strategies:
Penetration pricing: starting low to acquire market share and then increasing as you grow.
- Economy Pricing: setting a low price that’s hard for your competitors to beat (if you can remain profitable doing so)
- Premium pricing: High-end pricing, justified by unique value in return.
- Product Line Pricing: breaking down your service into service tiers with separate prices that increase as your offered services and value expand.
(There are more which you can read about here)
When it comes to offline services (healthcare providers, household upkeep, legal services, etc.) proximity is a determining factor. The closer (and more accessible) you are to your targeted audience the high your purchase probability. As the saying goes - location, location, location. When in reference to online services the purchase is made virtually, but the ease of purchase and accessibility are still determining factors to consider: secure payment, type of transaction, account management and more.
When it comes to services, promotion often refers to placement, as in where your online presence should be in order to reach your target audience. And positioning completes the “what” you will be showing. For instance, where you might run promotional ads or content (Adwords? Facebook? Content syndicator?) and what messaging they will contain.
People are the main focus when it comes to service marketing. As we’ve mentioned above your service credibility and success rely on your ability to develop a healthy relationship with your audience. That is why you must pay close attention when defining your customer communication protocols, it is one of the factors by which your service will be measured.
As you now know, with service marketing, it’s not just about the end result but how you get there. Process defining ensures that your service is perceived as being dependable and that expectations will be met. Do you include customer support and how is that carried out is just one example for this point?
What we referenced above as trust is built by proving you’ve kept your promises in the past, and have unbiased evidence to support your claims.
Service Marketing Types
Service marketing often requires more explanation as to why the customer needs the product, how it works and why you are the best entity to deliver the service. However, customers are not the only target audience that needs to be educated about your service.
Service marketing education flows 3 ways, also known as the service marketing triangle:
- Internal marketing – marketing from the company to the employees. Getting employees on board and behind what your service offers. This is done through training, building trust, and empowering employees to become ambassadors of your service.
- External marketing – the more obvious marketing flow from company-to-customers. This is achieved through advertising, sales promotions, public relations, direct marketing, and online marketing.
- Interactive marketing – marketing between the customers and the employees at their various touchpoints in the marketing funnel. This includes personal selling, online customer support and interacting with customers on social media.
The service marketing triangle represents all possible interactions within the services sector, and how different types of marketing can be used based on interaction participants all to accomplish the end goal of service sales.
Inbound vs Outbound in service marketing
Another common marketing flow distinction is between Inbound vs. Outbound marketing, which refers to the manner in which your marketing message gets attention.
Also known as “push” marketing, places your service marketing message “in your customer’s face” at the time and place where you believe they are most likely and ready to interact and purchase your service. Examples would be Print/TV/radio advertising, social media advertising, cold calling, direct mail, email blasts and other methods that are sent to a large audience in hopes to catch a few, like casting a fishing net.
Also known as “pull” marketing, attracts customers who are actively looking for a service like yours. Inbound marketing nurtures educates and guides them towards your service. This is done via website content, blogs, downloadable white papers, guides, tip sheets and more.
When using an inbound approach, content is often aligned with specific points in prospects’ buyers’ journeys from generating awareness through comparison and education about your service up to the final purchase decision.
There are advantages and disadvantages to both methods, and the best service marketing would be a combination of both. Either way, the messaging you need to keep in mind will always be your service differentiation factors.
Service Marketing Examples
B2C Service marketing examples
Airbnb is an online marketplace for lodging and tourism experiences. The company’s “product” is their brokerage service, which matches travelers with vacation listings of all sorts according to their needs (location, duration, costs, accommodations). The listings are screened and vetted according to Airbnb standards, which builds trust with their users when booking a location. The marketplace business model means they don’t own any of the offered listings but collect a commission from each booking.
Their service targets two distinct audiences from both sides of “the deal”: travelers and listing owners, each benefiting from a separate set of service values. Travelers, get to choose from a variety of trustworthy listings that fit their specific needs (affordability, trust & customization, remember?). And listing owners enjoy exposure and booking management via the platform, which is conducive to positive customer experience and boosts their standing and reviews in return.
Uber is an on-demand transportation technology that connects driver-partners with riders. For riders, Uber is a great service that helps them get exactly where they need to go faster while drivers benefit from their time behind the wheel and earn some income. The core value here being flexibility for everyone involved (rider and driver).
However, Uber also works on building credibility and trust. It builds credibility with rider built-in reviews, and trust with safety guarantees for both riders (driver screenings and safety tools) and drivers (incident response teams, insurance, and other safety tools and services).
B2B Service marketing examples
HubSpot offers a full stack of software for marketing, sales, and customer service, with a CRM at its core for businesses of all sizes. This type of “all-inclusive” solution is a common B2B service model who’s allure of having everything under one controllable hub is great.
Their service marketing focuses on several differentiating factors such as:
Affordability - Hubspot opted with Product Line Pricing - offering a core functionality for free, with additional “hubs” for the rest of the marketing and sales as part of the “helping companies grow” concept, which is part of their brand and value proposition.
Credibility - Showing achievement statistics of no. of users, certifications alongside case studies.
Convenience and self-service - all marketing, sales, and service activities are simple and easily set up by the customer.
Variety - while Hubspot is essentially an “all you could want” solution, they do leave the customer the option to pick and choose their customized combo. So you decide how involved you want to be.
Facebook Ads is the advertising platform for Facebook, where businesses and brands create targeted advertising based on audience characteristics (demographics, interest, web activity and so much more).
It is marketed as a highly self-service and convenient advertising service, which is also extremely customizable for any size business for any purpose (from promoting a cause to selling online). It utilizes the information Facebook has on its users to generate income by “selling” marketers the opportunity to “push” their most relevant outbound marketing ads in front of the most relevant audiences. The more targeted the ads, the higher their conversion rates, and the lower the cost per conversion becomes for the advertiser.
The 5 most important tactics for service marketing in 2020
As you have seen service marketing can be challenging without a tangible product to display, and what you are selling is, in fact, your word that you can keep a promise. As you move forward with your service marketing keep these 5 tactics in mind:
- Know your audience: find out everything about them that is relevant to your service. You need to use this knowledge to decide where to find them and how to approach them to be convincing.
- Define your service values: this includes the end results you promise to provide, but should also include the steps in the process of getting there. Put yourself in your customer’s place and keep asking ‘why?’ to uncover these values.
- Build a relationship with your prospects and customers: plan out your communication channels and customer support. Nurture prospects with inbound marketing until they can make an educated purchase.
- Familiarize yourself with your surroundings: chances are your service has some sort of indirect or direct competition. Keep an eye on the competition, their weaknesses could be used in your service marketing as advantages.
- Continuously build trust and credibility with customer reviews and service ratings, appearing in credible & relevant service listings, creating and sharing case studies, and encouraging customers (find the right incentive) to act as service ambassadors. Building a good reputation is a great asset to your service marketing.