Five Signs of Good Service Marketing
by Al Hahn

Crafted Services, The First Sign

As marketers tend to do, I will approach the subject via the Marketing Mix, or the “Four P’s” of marketing.
     Let’s begin with Product, which, in our case, is service. Good marketers will have wonderfully crafted service products. Define “wonderful,” you may well say. To a marketer, a wonderful service is one that meets customer needs and wants very well. Services that fit customers well are easier to sell (another sign of good design).
     Another tip-off to good marketing is that the service portfolio has some unique offerings. It is easy to fall into the common pattern of three levels of services, commonly named bronze, silver, and gold. There is nothing inherently wrong with this approach, but really good marketers know that the number of different services should follow something called market segmentation. Each segment defines a group of like-minded customers who need a particular selection of service features. There is no magic number of segments; it depends upon your particular market. Companies like Hewlett-Packard, often characterized by great service marketing, sometimes have more than three varieties of services to tempt discriminating buyers. They also may offer some truly different packages, ignoring snoozing competitors who have missed the emergence of a new market segment.

Pricing, A True Distinction

Pricing is where it may be easiest to recognize something unusually good going on. Over the past 10 years as a consultant, I have become aware that we tend to underprice our services. Good service marketers don’t make this mistake. They price services to their fullest value. This leads to another characteristic—value-based pricing. This is a sophisticated technique that requires a seasoned marketer at the top of his craft. It is much more difficult to pull off, but it has the seemingly impossible combination of higher prices and happier customers as benefits. This marketing wizardry is too complex to explain in this column, but it is highly recommended.
     Discounting, while not, strictly speaking, a pricing technique is worth noting here, as it dramatically affects prices. Good marketers will understand this and attempt to install an earned-discount program that allows customers with multiple-year service contracts and big (service) spenders the best deals. This system rewards the best customers instead of the best negotiators. It also is consistent and fair to all your customers since any customer can get the same deal if they meet the criteria. Random discounting can destroy value-based pricing and earned discounts help to preserve pricing integrity. Good marketers also will be evident in smaller discounts overall and improved margins.

Channel Programs

Place is the confusing “P” of the Marketing Mix. In our industry, this means channels, as in distributors, resellers, and now the Internet. Since three “P’s” and a “C” didn’t have a melodious, catchy sound to it, we use Place as the fourth “P” instead. A well-designed marketing program will have the other three “P’s” implemented to match the channel. This means that reseller service programs have different features, different prices, and different promotions.
     Good marketers have carefully designed channel programs that fit the needs of each channel. This means that your new Internet services cannot be just warmed-over standard programs. If you are in two-tier distribution, it means that distributors need a pricing level that allows them to make some margin, too. Good marketers understand this and have programs crafted to match their channels.

Promotion

Often called marcom, short for marketing communications, promotion includes sales tools, such as brochures, data sheets, presentations, your Web site, advertising, and public relations. Good marketers will produce good tools. Services are intangible and this creates a greater need for tangible tools to help make them real to customers and easier to sell. Brochures need to convey overall service capabilities, position services, and generate credibility.
     Data sheets need to help prospects understand service programs and direct them to their best choice. Advertising may create interest and PR may provide credibility. Good marketers understand these tools and know how to craft them. Other tools, such as custom spreadsheets, may help salespeople demonstrate the value of services. Marketing organizations that invest heavily in promotion are on the right track for services.

Internal Selling, the Most Important Sign

The single, most significant killer of service programs is the sales force. When they don’t accept the validity of a new service, it dies. The best service marketing organizations understand this and put considerable effort into selling internally. They launch new services in the same manner as launching new tangible manufactured products. The best marketers, in fact, position and sell service within the entire company and sell it internally to all other organizations. They help the company to better understand service and help service to get needed resources.
     Because of its overall effect, this may be the most important trait of good service marketing. Failure to do this may negatively impact the entire service organization regardless of good execution of all other actions. It can impact the ability to deliver services as well as sell them.
     So I have noted five areas to check for signs of good services marketing. Take a look around and see how your company and others measure up. This column could be used as a high-level self-assessment. If you don’t like what you find, it may be time to call for help. If you find many good signs, give your marketers some well-deserved recognition. They’ve earned it.