Page 47 - DMGT510_SERVICES_MARKETING

Services Marketing

Notes Further, service organizations have identified customer segments that do not want to take the
co-production responsibilities and are even ready to pay higher prices.

Task Consider any one national and one private bank. Notice the differences in
their promotions, people and process.

Physical Evidence

Service customers experience a greater perceived risk as they cannot rate a particular service
until it is consumed. Therefore, service providers should try to attach an element of tangibility
to their service offering. The physical evidence can be in any form, for example, brochures or TV
commercials showing the details of a holiday destination, pleasant and courteous behaviour of
the service personnel in a bank, the location and ambience of a food outlet, etc.


Turning Your Services into a Product
Caselet
One of the biggest challenges in selling professional services is that what you are offering
is intangible. Your product can’t be seen, touched, or tasted. Until your prospective clients
experience what you do, they have no way of knowing if it will turn out, whether they
will like it, and how well it will work in their situation. To make a buying decision, the
client must first trust that your work will produce the result that they need.
The most common way to package professional services is by the hour or day. The client
pays for your time, and they keep paying until the project is declared complete. But clients
are often resistant to this. You will hear them say, “I don’t want to leave it open-ended,”
“That seems high for an hourly rate,” “I’m not sure my budget will allow for this,” or even
“I’m not quite clear what it is I’d be getting.”
You can overcome these barriers to making a sale by “productizing” your services. This
awkward term simply means that you make your service look more like a product, so that
it becomes easier for your clients to buy. You give it a defined scope, fit it into a limited
time period, assign it a definite price tag, and attach a distinctive name.
Let’s say you are an image consultant, and you’ve been selling your time for $75 per hour.
Instead, you offer a “One-Day Makeover” at a price of $495, and include a wardrobe
assessment, colour consultation, and shopping trip. You’re giving your clients a defined
result with a clear timeframe and set price, making it easy for them to buy. Plus, you are
able to let clients experience a range of the services you offer and suggest additional ways
they can work with you.
A market research consultant working with corporate clients at $150 per hour could instead
provide a “Market Position Blueprint” for a flat fee of $2500. The package would include
a comparison matrix of three key competitors, qualitative data from interviews with six
loyal customers, and recommendations for improving the client’s market position, all to
be delivered with 30 days. Clients know in advance exactly what they are paying and what
they will get for it.

When buying your services in a package, the client runs less risk. They don’t have to
worry about cost overruns or getting an unexpected result. They know how soon the
Contd...

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