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Services Services

marketingmarketingmarketingmarketing

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Services marketingServices marketing

Business Business Business Business

modelsmodels

NOTE: View these pages as Notes Pages for more explanation of the content.

The contents of this document remain the copyright of Nicholas Coutts. This document may be copied in whole or in part, provided the copyright holder is acknowledged.

WHY ENROLL IN THE S•O•SSM SERVICES

PROGRAM?

By enrolling in the S•O•SSM Services Program,

a routine sampling interval can be establlished

to build-up a trend of data over time. that

trend allows you to compare sample history

and more easily identify deviations from the

normal trend. This consequently adds value to

the data interpretation process with more

meaningful recommendations and

recommended actions.


The offerThe offerThe offerThe offer

What is the

difference

between a between a

product and an

offer?

© Nicholas Coutts August 2010

PRODUCT

Intangibles

During sales service

Before sales

service After sales service

DeliveryGuarantees

80 per cent of the impact, but only 20 per

cent of the costs

Complementary assets

Qualityperceptions

Valueperceptions

OrganisationOther user

PRODUCT

Services

Warranties

Add - ons

Finance

Advice

Availability

Value networks

Source: de Chernatony and McDonald

Organisation

Brand name

Corporate image

Reputation

user recommendationsPRODUCT


ExerciseExercise

What are the barriers to purchase

and use?

15

Technical Political

and

social

Organisational Financial Emotional

• Barriers to purchase and use are lowered or eliminated by information,

experience and by services.

• This will tell you if you need to partner with a third party to provide some or

all of the services.

• Avoid giving away service, in order to sell the product. To sell service, you will

need to track time spent on providing services, have a rate card for services

and a billing system, to invoice the services.

• Note that service marketing is theoretically and practically very different to

product marketing. You may need to recruit service marketing skills.


The life cycleThe life cycleThe life cycleThe life cycle

The life cycle

high higher marginlower volume

margin


higher volumelower margin

low time

margin

volumelow high

The life cycle

high

margin


low time

margin

volumelow high

The life cycle

high

margin

Demand creation Fulfillment


low time

margin

volumelow high

The life cycle

high

marginvalue €

volume


low time

margin

volumelow high

actualforecast

The life cycle

high

margin


value €

volume


low time

margin

volumelow high

actualforecast

The life cycle

high

margin


value €

volume

r2

r2


low time

margin

volumelow high

actualforecast

Product and services life cycle

high


retained

margin

higher

risk

lower

risk

higher

risk


margin

retained

marginlow

low

naive user

knowledge in the market

time

product volume

high

expert user

complexity

Product and services life cycle


channel capability

channel capacity

SEGMENT A B C

message

Example: technology product distribution

Quantity

ValueValue

Margin


ExerciseExercise


Service Service Service Service

blueprintingblueprinting

Blueprints Examples

1 Design engineering Celoxica

2 Account management Hill&Knowlton

3 Marketing and sales UKeU3 Marketing and sales UKeU

4 Financial services Style

5 Telecomms BTWholesale

6 Retail Post Office

Why blueprint?

Ensures the service delivery process matches client requirements

Identifies required resources

people, skills, systems, time, budget, collateral

Identifies up-sell and cross sell opportunities

Identifies ways to add value

Gets the right people doing the right things at the right time

Why blueprint? 2

Enables planning for when something goes wrong

Ensures capability and capacity are available to meet the revenue and

transaction targets.

Identifies minimum time requiredIdentifies minimum time required

Identifies the “moments of truth”

which need to be managed to ensure the right brand experience

Allows the handovers between channels to be engineered

Why blueprint? 3

Establishes policy and procedures

Identified the critical business processes

Important to make the process explicit to customers and partners

Important for systems design

especially customer relationship management systems

A valuable resource for training and communication

The blueprint

Swim lanes

horizontal swim lanes for each function, department or resource

the top lane is usually the customer

Moments of truth

occur when something involves the customeroccur when something involves the customer

Microsoft Visio is a good tool for creating and maintaining

the blueprint document

allows spreadsheets to be attached, as required, to show data

on time and cost

The blueprint may require adaptation for each customer segment

Customer interface

Customer- legal- engineering- product management/

marketing- project managemenet

Celoxica

Projects team

Project Management

Legal

Senior management

Support

Account Manager

Inside sales

ApplicationsEngineering Manager

Sales operations

CustomerEnquiry

ReviewEnquiry

Progressopportuni

ty

Legaldocument

s

Preparequotation

Proposalprocess

Developsolution

Clarifyrequireme

nts

Rejectionletter

notifyaccountmanager

Reviewcustomer

PO

Review

Orderplaced?

no

reject

accept

Issuerelevantmaterials

FollowupDesignservices

opportunity?

Designservicesprocess

special te

rms?

copy

Approvequotation

Issuequotation

yes

ApprovePO

Process PO

queries

File

File

Manageaccount

notify

end of sales process

ReviewPO

???

Raise orderacknowledgment and sendto customer

Receivesorder

acknowledgment

accepted

Receivesorder

acknowledgment

Notification received



Licencekeyissued

Licencekey

received

Activatesupportservices

non-s

tandard

?

ServicesProposal

preparation

serv

ices re

quire

d? e

.g.IP

core

s,

bespoke tra

inin

g, e

ngin

eerin

g support

??

Invoicereceived

Example blueprint – design engineering - Celoxica


Finance

Senior management

Sub-contractors

Timeline

Lead qualform

Evalprocess

File

quotation File

Finance

Receivesorder

acknowledgment

Order fulfilment,stock controland productmovementprocesses

Preparedocumentation

Despatchproduct

Notification of

despatch

Supportservicesprocess

Trainingprocess


Invoiceraised

Example blueprint – account management

Hill & Knowlton

Example blueprint – UKeU

Example blueprint – financial services Style


Example blueprint - BTWholesale


Awareness Active Selling Signed Contract Fulfilment After Sales

Example blueprint – Post Office

Services Services

marketingmarketingmarketingmarketing

Administration and money

managementFinancial services

CharacteristicsService type

Barrier to entry is human expertiseProfessional services

Service types and their characteristics

managementFinancial services

An infrastructure of technologyTechnical services

High volume and based on

consumer offersConsumer services

• Lack of differentiation

• Services allowed to become commodities

• Poor understanding of customer needs

• Over-reliance on industry research reports

• “One off” services

Common mistakes in marketing of services

• “One off” services

• “Overclaim”

• Lack of proposition

• Product-led approach

• Servility rather than service

The discipline of services marketing

About 25 years old

Intangibility, Simultaneous consumption, Perishability,

Lack of ownership, Variability, InseparabilityAmerican

No product, Process outcomes are keyNordic

• Good application of the scientific process

• Related to customer care and customer service

• Not well known by industry

Support, Process, OutputFrench

• Intangibility

• Simultaneous consumption

• Perishability

How do service differences change marketing?

• Lack of ownership

• Variability

• Inseparability

How to address these differences

Intangibility brand presence

Simultaneous consumption quality of service

Perishability capacity planningPerishability capacity planning

Lack of ownership control

Variability process design

Inseparability people selection

Differences in marketing of services

Intangibility

• Create “presence” through

physical thingsphysical things

• Brand gives reassurance

Simultaneous consumption

• Customer care must be real

• Service quality: no product to


• Service quality: no product to

compensate

• “Word of mouth”: people talk

about experience

Perishability

• Capacity planning


• Special promotions

Lack of ownership

• Value positioning


• Value positioning

• Environmental design

Variability

• Process management


• Expectation management

Inseparability of delivery

personnel

• People behaviour important


• People behaviour important

A summary of the differences between

marketing of services and products

• The customer’s need for control

• The importance of the service process

• The customer learns the supplier’s process

• Intangibility of consumption

• Simultaneous consumption• Simultaneous consumption

• Stress makes quality issues more intense

• Emotional involvement

• The importance of the corporate brand

• Interdependency with customer care more intense

• Importance of people and their behaviour

Summary of the principles of marketing of services

Make the intangible

tangible.

Turn the corporate

name into a brand.

People are part of

the offer.

Marketing of

services Manage the

corporate brand as a

tangible image

strategy.

Service must be

holistic.

Segment customers

by service

preference and

emotional needs.

Manage the

processes.

For example: the phenomenon of control

Marketing to customer

• Corporate brand

• People

• Process

Naive

The service process takes control from the customer

New customers feel vulnerable

Experienced customers want to regain control

• Streamline process

• Deploy technology

• Self serviceExperienced

Case study: Symbol Technologies

• Analysed supermarket experience

• Created new technology

• Compared service

• Attracted customers

• Reduced costs

Se

rvice

s

“The Seven Ps”

Product

Price

PlaceP

RO

DU

CT

S


People

Presence

Process

Se

rvice

s

Promotion

PR

OD

UC

TS

Nature and roles of product marketing

Pre-production

marketing

Production

Post -production

Create awareness

Induce trial

Demonstrate

Word of Mouth

communication


Post -production

marketing

Consumption

Demonstrate

benefits

Build brand

preferences

Nature and roles of service marketing

Pre-sale

marketing

Create awareness

Induce trialWord of Mouth

communication


Demonstrate

benefitsPost-sale

marketing

Production Consumption

Build brand

preferences

A framework for marketing services

Marketing to

existing customers

Marketing to

employees

Marketing to

new customers

• Managing the evidence

• Branding the company

Maximising

marketing

potential

Turning marketingBuilding a

marketing


Turning marketing

into a line functionmarketing

organisation

Doing the service

very right the

second time

Managing and

exceeding

customers’

expectations

Doing the service

right the first time

Identifying

the right service

Delivering

quality

service

[email protected] www.nicholascoutts.co.uk 44 77 24 398 675

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