What is Service Marketing?

Service marketing is a process that applies tangible characteristics of touch, taste, smell and sight to intangible services in telecommunications, finance, hospitality, car rentals and health care in order to promote sales, build relationships and give value to customers.

How Service Marketing Works

  1. It distinguishes between products and services

    There are two main differences between products and services. Products are tangible and services are intangible. Products cater directly to a customer's needs or desires because the customer can see, hear, feel or taste the product giving immediate satisfaction. The customer understands the value that the product delivers because the product is tangible. Service marketing encourages and promotes intangibles like health care or financial services. In these situations, the customer may not immediately perceive the value of the services resulting in a more challenging marketing strategy.

  2. It promotes an entire customer experience

    Service marketers need to gather enough information so that a holistic picture of the customer emerges. In this way, marketers can devise strategies that appeal to the customer not as one service but as an entire journey. For example, airlines not only sell customers tickets. They also deliver service by developing apps that advise customers when it's time to check-in for a flight, give pre-boarding options and, upon request, allow customers to connect with a taxi, Lyft, or Uber at the destination. Hospitality, travel and E-commerce are ideal vehicles for promoting the entire cycle of a service.

  3. It encourages team-sharing across disciplines

    In regular marketing, teams work solely within their specific groups on product development or e-Commerce during a promotional campaign. Service marketing is different because it encourages a cross-agency approach. Teams brain-storm and work across disciplines to get a more total picture of what kinds of services work best for customers. The agency is not just promoting a product. The agency is promoting an experience with a variety of ways for the customer to take actions resulting in an ongoing relationship with the brand. The total experience of the service, then, has great value for the customer.

Why Service Marketing Matters

  1. It enhances the brand

    Although the product caters to customers' immediate wants and needs; service marketing reinforces the good feeling, reliability, great customer service, reduced price or the convenience of the service brand. Services are intangible and it may be more challenging for a marketer to create campaigns that help customers see a service's value. With an effective campaign, the brand is enhanced and the customer may follow the brand over the long term.

  2. It helps marketing agencies design better services

    Effective service marketing results from cross-agency cooperation. When teams work collectively to analyze and discuss customer data, wants and needs; design teams can develop more productive content. This encourages repeat business from customers because they know that their feedback matters at every step of the creative process.

  3. It takes the customer on a journey

    Service marketing addresses the entire buying experience for the customer. The value of that experience may not be as obvious to the customer as purchasing an actual product. In service marketing, the customer is attracted not only to the service itself; but also to available add-ons. For example, customers may link to a private residence rental agency and not only book a home for a short-term lease but also click on links for bicycle rentals or area tours on the same website. This is a complete journey for the customer and leads to a greater sense of value for the money.