Marketing Strategies for Different Services
Recall when I introduced service marketing strategies earlier in the week, I mentioned 3 types
- Services based on unskilled labor, such as gardeners and housekeepers
- Services based on skilled labor, such as interior designers and auto mechanics
- Professional services, such as physicians and attorneys
Because of basic differences in customer expectations and service environments, marketing strategies differ across these three service types.
In many ways, customer expectations for unskilled services look a lot like utilitarian products and the marketing strategies are similar. Among customer expectations are:
- Low price
Customers are not going to go out of their way to search for unskilled services in part because they view them as commodities. Hence, advertising needs to be continuous, targeted, and composed of multiple media outlets to reach prospective customers easily whenever they might want service.
Price competition is a prevalent element of marketing strategy so firms need to ensure they remain price competitive. Since most consumers can do unskilled labor themselves, this applies further pressure to control prices. Also, since consumers can likely do the service themselves, creating credibility for the firm might be problematic and consumers might resist efforts to pursue a particular path regarding the service. For instance, a consumer might want a particular lawn service even though it might damage their landscaping or they might resist efforts by the lawn service to make improvements. When the results don’t match customer expectations, the customer will likely blame the lawn service, even though the service recommended against the course of action leading to dissatisfaction.
Prospective customers are looking for convenience in hiring unskilled service firms. Hence, anything the firm can do to make ordering and obtaining service easier will help the firm’s marketing strategy succeed. For instance, Roto Rooter allows customers to schedule service at their convenience online and has 24 hour emergency phone service. Service providers should also be able to give customers a definite arrival time, arrive on time, and communicate delays with the customer promptly. Providing this convenience has a major strategic advantage over competitors. For instance, a recent advertising campaign centered on the convenience provided by a 2 hour window for arrival introduced by Cox Communications to compete with rival, Verizon, which told customers they would be at their homes anytime on a given day. Of course, if Cox fails to deliver on this promise, the strategy will backfire and create a strong negative attitude toward the firm and negative word of mouth.
Satisfaction may be somewhat elusive, but this marketing strategy is the fundamental driver of repeat business in unskilled services.
Expectations for skilled services may look very different, requiring different market strategies.
Advertising may have less impact then word of mouth recommendations for skilled services, since these services are seen as varying significantly in quality. Hence, more effort should be made to ensure satisfaction and positive word of mouth.
The impact of pricing on skilled services can be complex. This marketing strategy really relies on generating value — benefit less cost — than on being “cheap”. Evaluating skilled services is complicated by the lack of knowledge on the part of consumers relative to service providers. Sometimes price is used as a surrogate for quality in this context. Hence, a hairdresser who is inexpensive may be viewed as poor quality, while a more expensive hairdresser is seen as higher quality. Often, the appropriate marketing strategy involves targeting consumers and charging prices that match consumer expectations.
Convenience may also have a strange impact on customer evaluations of the service. For instance, I once made a reservation at a five star restaurant for a friend visiting from out of town. The friend had specifically requested this restaurant as he had heard amazing things about their food and wine list. I called back to say we were able to book on our preferred date and time. He then had me cancel the reservation, stating that they must not be a very good restaurant if they had that much availability.
Evaluating skilled services often relies heavily on prior experiences of the customer. Hence, marketing strategy involves developing a deep understanding of customers and providing services they desire. It also may mean providing different services to different segments of the market. For instance, the restaurant I mentioned earlier was much valued for their desserts so they opened a dessert restaurant a block away from their main restaurant to capture this market, leaving their restaurant free to focus on serving dessert to those who wanted a full meal, as well.
Professional services are further complicated, making their marketing strategy even more complex. Evaluating professional services is difficult because, not only do consumers lack any knowledge about the service, they may lack a gauge for whether the service was good or not. For instance, an attorney who looses your case may do so because you were not able to prove your case or because the other side had overwhelming evidence against you. Did the attorney do a good job? a bad job? Meanwhile, the attorney may have won the case, but was difficult to reach, standoffish, and sometimes hostile in conversations. Did the attorney do a good job? Would you recommend them?
Marketing strategy in terms of pricing becomes even more complex. Do you really want the cheapest CPA representing you when you go to an IRS audit? With physicians and dentists the situation is further complicated by third party payers who absorb most of the cost.
Successful marketing strategy for professional services revolves around ensuring the credibility of the service provider. This may involve displaying diplomas or law books or having plush offices that say you are successful.
An important aspect of marketing strategy for professional services is providing the human element in contacts with clients/ patients. For instance, my kids went to an orthodontist who made a point of knowing each patient’s name, telling them how beautiful they were, giving them choices in band colors, even hosting their birthday parties in the media room of the office. He held contests for iPods and other desired items for patients submitting pictures of themselves wearing his t-shirts at exotic locations. He paid for and displayed pictures of patients who completed treatment. He gave patients an ice cream cone when they earned points for keeping appointments, taking care of their braces, and wearing their t-shirts during visits. Even though he was one of the more expensive orthodontists in the area, his offices were packed. In terms of marketing, he sponsored bus trips for kids from local elementary schools to tour the offices and watch a movie in his media room.
Maybe these things would only work for kids, but adults like to feel like something more than a number to professional service providers. For instance, hospitals are beginning to deliver newspapers to patient rooms and behave more like hotels. Physicians who listen to patients, introduce themselves and shake hands, show they care about their patients, and display other socially dictated behaviors not only get more loyal patients and more recommendations, their patients are more likely to share openly about their health and take their doctor’s advice.
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