Management consultant, blog writer, dreamer
Are you adopting service marketing strategies? If not, now is the time…
Consumer markets are more turbulent and unpredictable than a couple decades ago. Indeed, as Matthew Meacham and others reflected recently: “Twenty years ago, competition in the consumer products industry looked like professional tennis. You faced opponents with business models that were similar to yours. You had been playing against them for years. It was tough but predictable and manageable”.
But now, it’s different. After all, it seems that everything is disrupted. Advances in digital technology has changed the playing field and rules in consumer markets. As a result, most products can easily be copied and sold anytime and everywhere at ridiculous low prices. How on earth can SMEs differentiate themselves with same-old products and copycat competitors? The answer is right in front of their eyes – their customers.
The customers in the market have remained mainly the same. In spite of having more choices and access to multiple channels, they still have the same needs and wants. SMEs need to convince their customers that they are the best firm to do business with. So, if SMEs want to steady their ships to calmer waters, they need to pay much more attention to serving their customers better.
Indeed, they can be on course to achieve a sustainable competitive advantage.
What is a competitive advantage?
A firm that enjoys a competitive advantage is a firm with a strong market position because its products create unique value for purchasers 3. Achieving a competitive advantage has all to do with how you compete in your marketplace. Also, how you use your strengths to counter threats and utilizing opportunities in your marketplace.
Examples of sources of sustained competitive advantages and companies that made them their own (ProfitableVenture.com):
- Strong research and innovation – Apple and Sony
- Brand Popularity – Virgin, Apple and Coca Cola
- Corporate reputation – Price Waterhouse and Berkshire Hathaway
- High volume production – Dangote Group
- Access to working capital – Oracle
- Barriers to entry – Multichoice
- Superior product or customer support – IKEA
- Exclusive re-selling or distribution rights – Google
- Ownership of capital equipment – Tesla
- Flexibility – Microsoft
- Speed and Time – Amazon and FedEx
- Low pricing – Wal-Mart
- Superior database management and data processing capabilities – Google and Facebook
The companies and brands that enjoy a sustained competitive advantage are well-known globally and by far leaders in their marketplaces. The question is: “How can you get some of their customers to support your (small) business?
You need to offer your customers a unique, unforgettable experience. Solve their problems and make them feel good – by giving them extraordinary good service.
Therefore, to achieve a sustainable competitive advantage in your (niche) marketplace, you need to give more attention to your service marketing strategies.
Service Marketing Strategies
Astute owners of SMEs use service marketing strategies to add more value for their customers and also to build brand equity.
There is no generally accepted and complete definition of services. Services could basically be referred to as dynamic activities and processes, while goods are static things 1. Therefore, are marketing services quite different from marketing products because products are tangible and services are intangible.
So, the value created for the buyers of products is not so much about the features and price of identical products. Indeed, most of the value for the customers will be how they ‘experience’ the intangible part of the product, customer service. Not surprisingly, for a while now, there is a construct called service marketing.
Service marketing share the four ‘P’s of the marketing mix. However, the People, Processes and Physical Evidence elements are added to complete the seven ’P’s of the service marketing mix.
What are the seven ‘P’s of the service marketing mix?
EPM explains the seven ‘P’s of services marketing as follows:
- Product – refers to the service a company wishes to sell. This could be flights in the case of an airline or rooms in the case of a hotel.
- Price – refers to the price a customer pays for the service. Pricing for services can be little more complex than for products.
- Place – refers to the ease of access that customers have to a service.
- Promotion – refers to the different ways you communicate, describe, and advertise your service. Because they are intangible, services can be more difficult than products to promote. This is because there is nothing physical that can be assessed by a potential customer.
- People – those people who are directly or indirectly involved in the delivery of the service. This typically means employees of the company. But it can also mean subcontractors with direct interaction with customers.
- Physical evidence – services are intangible. Despite this, their delivery often involves tangible elements. Physical evidence is defined as both:
- The environment or place where the service is delivered.
- Any tangible elements that facilitate the service or provide information about the service.
- Processes – refers to the procedures, mechanisms, and flow of activities that occur when the customer and the business interact with each other.
Now then, let’s see how SMEs can achieve sustainable competitive advantages by adopting service marketing strategies.
Achieve sustainable competitive advantages by offering your customers extraordinary service experiences
It may be easier said than done…
A truly extraordinary service experience is often a direct result of the interpersonal interaction between the front-line employee and the customer, whereby the employee provides something to the customer that other providers will not, cannot, or refuse to do 4.
The thing is – your front-line employees can make or break your business. However, in order to win over the customers, they need the whole company behind them, from the CEO to the floor sweeper. If not so, well then mediocrity, at best…
Responsibility, as it should be in any business, begins at the top.
Getting started with your service marketing strategies by being a good leader
Your leadership style is important to help create and a “service climate” in your organization. Indeed, here are some of the qualities that effective leaders in a service organization should have 5:
- Love for the business. Excitement about the business will encourage individuals to teach the business to others and to pass on to them the art and secrets of operating it.
- Your core values. If your core values are related to service excellence and performance, it will be visible in your organization.
- Believe in your employees. Recognizing the key part that your employees play in delivering service to your customers.
- Consult with your team. Effective leaders are able to ask great questions and get answers from the team, rather than just relying on themselves to dominate the decision-making process.
- Be a role model. You should role model the behaviors that you expect from your team.
- Communicate well. Effective leaders have a talent for communicating with others in a way that is easy to understand.
If you surprise you customers with a service experience they did not expect or paid for, they probably reward your business with patronage and loyalty. In fact, these customers will be profitable ones and will defend and advocate your brand, in any business channel.
But you should know your customers from inside out. How they behave; what makes them laugh and cry. What makes them angry. Because getting a sustainable competitive advantage by adopting service marketing strategies and with a little help from your customers is priceless…
Read more: Managing a Business in this Chaotic Era
A Marketing Plan helps you to communicate the right content to the right audience.
1 Gummesson, E. 2007. Exit services marketing-enter service marketing, Journal of Customer Behaviour, 6(2):113-141.
2 Grönroos, C. and Ravald, A. 2011. Service as business logic: implications for value creation and marketing, Journal of Service Management, 22(1):5-22.
3 Nilsson, F. and Rapp, B. 2005. Understanding competitive advantage: The importance of strategic congruence and integrated control, Springer Science & Business Media.
4 Collier, J.E., Barnes, D.C., Abney, A.K. and Pelletier, M.J. 2018. Idiosyncratic service experiences: When customers desire the extraordinary in a service encounter, Journal of Business Research, 84:150-161.
5 Jochen, W. 2016. Winning In Service Markets: Success Through People, Technology And Strategy, World Scientific.