Services Marketing

Explore the Strategy of Services Marketing

Services marketing

In the United States, tourism is a trillion-dollar industry. However, selling an intangible product is a challenging task for most cities in the country. How can you sell a product that a consumer will never own?

The most successful tourism campaigns don't sell products, but experiences. Consider the “What Happens Here, Stays Here” campaign by the Las Vegas Convention and Visitors Authority. The LVCVA is responsible for bringing millions of people to the city every year and “What Happens Here” is its most successful advertising campaign to date. Launched in 2004, it preceded a record-breaking visitor rate of 37.4 million people to Las Vegas in just a single year.

“The emotional bond between Las Vegas and its customers was freedom,” noted marketing agency R&R Partners after conducting extensive research. The campaign may not sell a good, but it still promises consumers that they will get something they can take home with them: An experience unique to the city of Las Vegas. (See also Marketing Tourism)

What is Services Marketing?

Services marketing is a broad category of marketing strategies focused on selling anything that is not a physical product. This includes everything from personal services like medical care and spa treatments, to the rental of vehicles and spaces, to experiences like concerts and dance lessons. Any method that can communicate a service's appeal and benefits to customers is a valid approach, including informational content, promotional deals, advertisements, and many other kinds of marketing materials. (See also Informational Marketing)

In the case of the “What Happens Here” campaign, the LVCVA sold the experience of visiting Las Vegas in an attempt to generate customers for hotels, restaurants, and other local businesses. The campaign consisted of a wide variety of materials, like television commercials, magazine ads, Internet ads, billboards, and others marketing materials that communicated the campaign's message consistently.

Goods vs. Services

A company that produces goods has an easier time setting a price for its products than a service provider. Goods cost a discreet amount of money to manufacture, package, and ship. Services can vary greatly in the real and perceived value of what they offer. Presentation, consumer beliefs, and rarity of expertise in the service provided can all affect the price of a service.

Who Uses Services Marketing?

All organizations that provide services of some kind use services marketing strategies. These fall into the two, broad categories: organizations that provide services to individuals (business-to-customer, or B2C), and organizations that provide services to other organizations (business-to-business, or B2B).(See also B2C Marketing)

Services marketing is most commonly used by companies that sell to individuals. They research consumer behavior to create advertisements that appeal to certain demographics, allowing companies to narrow the marketing focus to a concentrated effort.

For example, a company that provides swing dance lessons would use services marketing strategies to research what kinds of people are most interested in swing dancing, and then create advertising materials and promotions designed to appeal specifically to those kinds of people.

Organizations that provide services to other organizations will apply these marketing techniques in their industrial marketing efforts -- a field dedicated to B2B marketing efforts. This usually requires an approach that involves more person-to-person contact, as a sales representative from the service provider negotiates with a representative from the client business. A company that provides technical support for another company's computers, for instance, would use services marketing to convince clients that its service is somehow necessary or a good investment. This is likely to include meetings, presentations, and contract negotiations in addition to creating advertising materials that appeal to businesses that use computers. (See also Industrial Marketing)

The United States Service Industry

The majority of the U.S. economy depends on the service industry. Moreover, the service sector in America has been growing steadily for years. It accounts for 80% of all jobs in the country and much of the total amount of money generated in the nation at home and abroad. Of the total gross domestic product (GDP) of the United States, 68% of it comes from the service industry.

Source: www.ustr.gov

Using Services Marketing

Regardless of what specific kinds of advertising and sales techniques a company uses in conjunction with services marketing, the general plan will follow three steps: Research, Materials, and Evaluation.

The Message of the Logo

Service providers need to communicate the message of their company and its products with the same visual immediacy as goods manufacturers, but they don't necessarily have products they can photograph. A good logo can communicate that message instead.

  • Allstate Insurance is known for its logo depicting the hands from its slogan, “You're in good hands.”
  • Google has its instantly-recognizable lowercase “g” in a variation of the uncommon Catull Pro Regular font.
  • The World Wildlife Fund uses a simple black-and-white panda logo to evoke a complex message of global wildlife awareness, remind viewers of endangered species, and encourage sympathy without using any words at all.

Before embarking on campaigns, companies typically research their customers to develop projections of their interests and needs. For the “What Happens Here” campaign by the city of Las Vegas, the LVCVA hired the R&R Partners marketing firm to survey people in several U.S. cities to determine how they felt about Las Vegas as a tourist destination.

Once a company compiles and review market research data, it can create marketing materials based on the message it believes will appeal to a target demographic. The data R&R Partners gathered for the LVCVA strongly suggested that people associate Las Vegas with freedom and indulgence that, while not acceptable at home, is permissible in Vegas. R&R Partners developed a series of advertisements across multiple media that communicated this message, tied together with the tagline “What Happens Here, Stays Here.”

The final step in a services marketing plan is to evaluate the success of the plan. The service provider should set specific goals for sales, conversion rates, advertising cost per customer, and other concrete metrics. After a certain period of time, the campaign should end and the company should measure any changes in the metrics it hoped to effect with the marketing campaign.

In annual evaluations of the “What Happens Here” campaign, the LVCVA found that it had diminishing returns. The first year of the campaign was a success, returning $26 to the city for every $1 spent on the campaign, but its impact on consumers became less pronounced each year, leading the LVCVA to scale back the campaign by the end of the decade.

Careers in Services Marketing

Market Researcher

At the beginning of any services marketing campaign, a market researcher will gather the data necessary to identify a service's target demographic and craft a meaningful message for that demographic. Market researchers need to have good communication skills to conduct surveys and interviews, as well as technical skills to process data and create projections.

Education/Experience

Services Marketing Salaries

  • Market Researcher
    Starting: $39,000
    Median: $51,000
    Top Earners: $65,000
  • Copywriter
    Junior: $28,000
    Senior: $55,200
    Top Earners: $109,000
  • Data Analyst
    Entry Level: $33,350
    Median: $60,570
    Top Earners: $111,440

Source: Bureau of Labor Statistics

A market researcher should have a bachelor's degree in marketing, business, psychology, sociology, or communications. Previous experience in any public-facing position like in retail or call centers can be very valuable.

Copywriter

Copywriters are responsible for the creation of the advertising and other communication materials in a services marketing campaign. This includes taglines, commercial scripts, ad text, and other items. Copywriters must have excellent written and verbal communication skills and the ability to be creative under tight deadlines.

Education/Experience

A copywriter should have a bachelor's degree in marketing, business, English, psychology, or communications. In addition to prior experience in any writing-focused position, a good copywriting resume should include a portfolio of work samples.

Data Analyst

Throughout a services marketing campaign, a data analyst will evaluate metrics and other information related to the campaign. This includes demographic data gathered by market researchers, website analytics during the campaign, and assessment of the campaign's overall effectiveness. This is a highly technical position that requires high computer literacy and the ability to explain complex information to those with less technical backgrounds.

Education/Experience

A data analyst should have a Bachelor of Science degree in marketing, statistical analysis, math, or computer science. It is helpful to have experience in database management, systems administration, or another computer-focused position, as well as comfort in learning how to operate new technology.

Learning Services Marketing

Understanding the various aspects of the services marketing field requires an in-depth education in marketing. Many marketing programs provide the expertise to enter the workplace with a concrete understanding of modern marketing practices. Marketing education programs offer a diverse range of hands-on learning experiences to teach the technical, creative, and administrative skills of a marketing team.

Those who are interested in technical positions like data analysis and web design will enjoy courses like:

  • Next Generation Qualitative Tools
  • Research Methodology
  • Tools and Techniques of Data Analysis

These courses focus on learning business software, the logic of research organization, and the presentation of data.

For professionals who want to concentrate on creative roles and management career tracks, there are courses like:

  • Brand Development
  • Advertising Communications
  • Marketing Strategy and Resource Allocation

Along with topic-specific courses, a marketing program will present students with case studies of real-world marketing campaigns and the opportunity to create simulated campaigns in student-led groups. This takes the education out of the abstract and into the realm of meaningful experience. A hands-on approach to marketing education is what shapes skilled professionals and gives them an advantage in the fast-paced world of modern marketing.

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