By: R. Lynn Burkholder
Marketing a service—such as a stay at a hotel, a meal at a restaurant, or a sightseeing excursion—is much different than marketing a tangible product. Services and experiences are intangible, inseparable, variable, and perishable; if you market them, you have to understand each of these unique characteristics.
Unlike a tangible product, services cannot be seen, heard, tasted, smelled, or touched before purchase. In other words, the consumer can’t try the product before deciding whether or not to buy. Service providers can address this issue by providing customers with virtual tours, guest reviews, and service guarantees.
Being “inseparable” refers to the fact that services are produced and consumed at the same time, whereas physical products are typically manufactured and stored before they are sold. The customer is typically involved in the delivery of the service and, therefore, must be trained to ensure a positive experience occurs. For example, hotels, restaurants, airlines, and rental car companies have trained customers to use kiosks for faster service—and even resolve service issues and make payments. This results in better service with less employees, which translates into higher satisfaction for the customer.
Since human beings play a large role in producing a service, the quality can vary significantly from minute to minute. To reduce this variable, service providers must hire the right employees, invest in employee training, standardize the service process, and monitor customer satisfaction through surveys and feedback.
Services are perishable and cannot be stored. As a result, if they are not sold on any given day, that revenue is lost forever. For example, if a 100-room hotel sells 75 rooms one night, it cannot sell an additional 25 rooms the next night to make up the lost revenue. A restaurant cannot overbook tables on a Saturday night to make up for the meals it didn’t sell during the week. To eliminate this loss, service providers can enable consumers to purchase across a variety of channels (by phone, online, and on mobile apps), require reservations and advance deposits, and sell excess inventory at a discount.
Understanding the unique characteristics of marketing a service is vital for marketers who want to deliver quality experiences with their customers in mind.
R. Lynn Burkholder is president of RLB Marketing LLC, a business development firm specializing in strategic planning for the hospitality, entertainment, travel, and professional services industries.