Business Marketing Techniques

Archive for December, 2009

The traditional 4Ps of products, promotion, prices and place remain but three additional variables people, physical evidence and process are included to produce a 7Ps framework. The need for extension is due to high degree of direct contact between the firm and the customer, the highly visible nature of the service production process, and consumption of services. Physical products can be inspected and tried before buying but pure services are intangible. A customer cannot go to a showroom to see a medical operation that he is considering.

This means that customers of services suffer higher perceived risk in their decision making process. They do not know whether they have purchased the right service until they have used it and in some cases like medical service and car service, they cannot be sure whether they have received them right service long after they have consumed the service. The three elements of the extended marketing mix people, physical evidence and processes provide clues about the quality of the service to the customer, and are crucial in influencing the customer’s perception of service quality.

Brand name of a service can also influence the perception of a service. It is sad that service providers do not expend necessary resources and efforts in building strong brands. In situations where customers are unsure of the quality of their purchases, strong brands provide an assurance to customers that the company has a history of good quality.

Customers spend lot of time, money, and effort in ascertaining the likely quality of service they propose to buy and the providers do the same in assuring the customers of high quality of their offering. Both parties would be greatly served if service providers build strong brands. Customers would be less unsure of the quality that they will get. Besides promoting its service, a provider should provide high quality of services consistently so that customers talk about it favorably.

There is need to study service encounter from customer’s point of view. The underlying psychology of service encounters i.e. the subtle feelings that customers experience during service encounters have to be examined more diligently. In any service encounter, from a simple booking of a railway ticket to complex consulting assignments, perception is reality. What really matters is how customers interpret the encounter. Following three psychological processes will help in understanding how the perceptions about service encounters are formed.

When customers recall an experience, they do not remember every single moment of it unless the experience is short and traumatic. Instead, they recall a few significant moments vividly and gloss over the others. The customer carries away an overall assessment of the experience that is based on the trend in the sequence of pain or pleasure, the high and low points, and the ending. Customers prefer a sequence of experience that improves over time. When gambling they prefer to lose first and then win rather than win first and then lose.

Customers also pay attention to the rate of improvement, preferring ones that improve faster. And the ending matters enormously. A terrible ending usually dominates a person’s recollection of an experience. Build commitment through choice: Blood donors perceive less discomfort when they are allowed to select the arm from which the blood would be drawn. People are happier and more comfortable when they believe that they have some control over a process, particularly an uncomfortable one. Patients should be allowed to make an informed choice about the treatment that they will undergo.

Airlines can allow passengers to choose when they would have their meals. Banks can allow customers to work with their favorite teller. Most customers would be happy if they had more choices. Give people rituals and stick to them: customers find comfort, order and meaning in repetitive, familiar activities. In long-term, professional service encounters, rituals like kickoff dinners, elegant presentations and final celebrations mark key moments in the relationship, establish professional credentials, set expectations and get feedback.