Chapter VII.

Service
Promotion
Introduction
 To successfully market a service, organizations
must have a fully integrated communication
program.
 Communication within the marketing context
involves informing, persuading and influencing
consumer behavior.
 An integrated communications program is the
coordinated use of the various communication
mediums including advertising, sales
promotion and personal selling.
Developing a Communication Strategy

The Role of Communications in Services

The specific role of
communication will vary
depending on:
 The purchase phase
 Stage of the product life cycle
Purchase Phase and Promotion Objectives

At the Pre-purchase Phase

 For brand loyal customers the role of communication
would be to persuade them to purchase sooner.
 For consumers who are not brand loyal,
communication can impact the choice of service
firms.
 Communication can impart information that is a
key factor in reducing the uncertainty in all risky
decisions.
 It can also offer reassurance.
 Communications can be used to try to
influence consumers choice in the following
ways:
 Ensuring that the firm’s service offering is in the
evoked set
 Altering the weights consumers attach to different
attributes to favor those in which the company is
strong
 Altering the score on a given attribute for the
company, particularly if a gap exists between
performance and consumer’s perceptions
 Altering the score on a given attribute given to a
competitor, particularly, if a gap exists between
performance and consumers’ perceptions
In general, the objectives of
communication at this stage
include:
 Reduce purchase risk
 Increase the probability of a
purchase
 Develop a corporate image
 Build brand equity
 Increase awareness
At the Service Encounter Phase
 Communications can be used to ensure
successful performance by giving the
consumer a clear script.
 Although this can be done through
advertising, the presence of the consumer
in the actual service setting gives the
opportunity for a much broader range of
communications channels.
 Communication at this stage may have two
objectives:
 Enhance customer satisfaction
 Increase repeat purchase behavior
 How?
 It may:
 Influence consumer expectation
 Affect evaluation of service performance
 Provide information about the procedure
At the Post Purchase Phase
 Consumers determine satisfaction by comparing
their prior expectations of performance,
particularly predicted service, with the
perceived actual performance.
 Consumer expectations come from a number of
sources, including company’s explicit service
promises.
 Advertising, designed to influence pre-purchase
choice behavior, can set expectations in the
consumer’s mind about the quality of service
that will be received.
 The objective now would be to:
 Reduce cognitive dissonance: by
reassuring customers that they have
made a good purchase
 Stimulate positive word-of-mouth
communications: by offering customers
incentive
 Increase repeat purchase behavior: by
using coupons and premiums
Stage in the Product Life Cycle

 The objectives of a firm’s communications mix

often relate directly to the service offering’s
stage within the product life cycle (PLC).
At the Introduction Stage
 General Objective: to inform the customer
 Specific objectives include:
 Introduce the service offering
 Create brand awareness
 Prepare the way for personal selling efforts
 Encourage trial
 the PLC tend to lean toward informational
and persuasive content.
 The specific communications objectives
include:
 Create a positive attitude relative to
competitive offerings
 Provoke an immediate buying action
 Enhance the firm’s image
At Maturity and Decline Stages
 The general communication objective during
the maturity and decline stages of the PLC
tend to utilize persuasive and reminder
communications.
 The specific communication objectives
include:
 Encourage repeat purchase
 Provide ongoing contact
 Express gratitude to existing customer base
 Confirm past purchase decisions
Stages in the Communication Strategy
Development Process
 Developing a communications strategy for
both goods and services involves the
following major steps:
 Selecting Target Markets and
Communications Objectives
 Developing the Firm’s Positioning Strategy
 Developing the Communications Budget
and Mix
 An integrative service communications
program has two primary components:
1. The Promotional Options
2. The Servicescape
 Both components should reinforce the
firm’s sustainable competitive advantage,
operational position, and customer value
package.
 Advertising, Sales Promotion and Personal
Promotional Options
Selling
 Use advertising if the goal is to increase
awareness, customer traffic or develop brand
or image quality.
 The use of sales promotion will enhance the
impact the ad has created.
 Use of personal selling is limited to business
customers due to high cost of hiring, training
and paying a sales staff.
 components
Servicescape
that facilitate performance or
communication of the service.
 The servicescape impacts consumer
expectations, evaluation of service quality,
and purchase intentions.
 Both the human and the physical elements of
the servicescape should be considered in the
communications program.
The Service Personnel
 Should be included in all communication programs since
they represent the firm
 Should be included if the goal is to reduce cognitive
dissonance so that:
 They would interact with customers in a positive way
 They would reinforce the idea that customers have made a
good purchase
 They would solicit customer satisfaction feedback
 To correct the situation following the service recovery
procedures if expectations have not been met
 They can properly implement the sales promotion programs
planned at the head office and advertised by the marketing
department.
The Physical Element
 Customers are very cognizant of the
physical environment.
 Signs, posters, and displays should be
used to reinforce communication efforts.
 communication strategy must take into
Special Challenges
consideration Associated
a number with
of special the Service
challenges
Communications
not typically facedStrategy
by goods-producing
companies.
1. Since services are often consumed as a shared
experience with “other customers,” mistargeted
communications may result in the unanticipated
consequence of having two diverse target markets
responding to the same communication at the same
time.
2. Service managers should also be aware that the
firm’s communications are often interpreted as
explicit service promises that consumers use to
base their initial expectations.
3. Since employees often produce the service in
close proximity to customers, employees
should be considered as internal customers
who are as much a target audience as
traditional external customers.
4. In many instances the service providers who
produce the service also must sell the service
and questions arise concerning the strategic
implications of turning doers into sellers.
 Mistargeted Communications

 Although segmentation is applied in both goods and

service companies, the consequences of reaching an
inappropriate segment with a part of the
communication mix are far less serious for goods
companies than for services
 If the wrong group of consumers buys a particular
brand of detergent, for example, it does not really
affect the company making the detergent; sales are
still being generated
 Suppose, however, that some of the wrong segment
decides to buy the services of a restaurant.
 An upscale concept has been developed, but to launch
the restaurant, management decides to have a price
promotion, and the advertising agency develops
inappropriate advertising. Or, through poor
management, the advertising is unfocused and produces
feature articles in the wrong magazines.
 The result is that the restaurant gets two types of
customers: upscale, middle-aged couples and price-
conscious groups of students.
 The former were the original target, and the latter
were attracted by inappropriate marketing tactics.
 Unfortunately for the restaurant and for many other
services, “other customers” are part of the product.
 The result is that neither segment enjoys the
experience because of the presence of the other, and
  A firm’s communications may reinforce pre-existing ideas
or theyExpectations
Managing may dramaticallyandalter those ideas and be replaced
Perceptions
by a new set of expectations.
 Expectations can be set by something as explicit as a
promise (e.g., "Your food will be ready in five minutes”) or
as implicit as a behavior pattern that sets a tone (e.g., a
cordial greeting upon entering the place of business).
 Many sources of expectations are under the direct control of
the firm. Only past experience and competitors’ activities
cannot be directly influenced in one way or the other.
 Given such control, the firm must determine what the
objectives of the communication mix should be.
 Perception is itself influenced by the same
factors that dictate expectations.
 For example, communications can create
warm feelings toward the organization that
raises perceived service levels.
 In comparison, inappropriately dressed and
ill-behaving staff can deliver high levels of
technical service quality but be poorly
perceived by the consumer, who will
downgrade the perceived service level
 Advertising to Employees

 The staff of service firms frequently form a secondary audience for

any firm’s advertising campaign.
 Communications seen by the staff, if they empathize with it, can be
highly motivating.
 However, if communications are developed without a clear
understanding of the reality of the service provider’s role in service
delivery, it can imply service performance levels that are technically or
bureaucratically impossible; that is, it can set expectation levels
unrealistically high.
 This has a doubly detrimental effect on the staff since:
1. It shows that people who developed the communications (the marketing
department) do not understand the business;
2. It raises the prospect that customers will actually expect the service to
operate that way, and the staff will have to tell them that the reality
differs from the level of service portrayed in the firm’s communications.
 In order for service firms to succeed, they
must first sell the service job to the employee
before they sell the service to the customer
 Although the communications are clearly
targeted toward customers, they also send a
message to employees regarding appropriate
role behavior.
 In the end, service communications not only
provide a means of communicating with
customers, but also serve as a vehicle to
communicate, motivate, and educate
employees.
Selling/Operation Conflicts
The conflicts associated with selling versus
operations are at least twofold.
1. The Economic Considerations
 Typically, service providers are paid for
providing services and not for time spent on
communications activities.
 Clearly, the provider must engage in marketing
activities in order to generate future customers,
but the time spent on marketing does not generate
revenues for the provider at that particular point
in time.
 Complicating matters further, the time spent
on communications activities with potential
new customers often occurs while an ongoing
project is conducted.
 This means that the time dedicated to
communications activities must be considered
when estimating completion dates to current
customers.
 Often the firm’s communications efforts must
occur while previously sold services are being
processed in order to avoid shut-down periods
between customer orders
2. Role considerations
 Many professional service providers
believe that communications activities
such as personal selling are not within
their areas of expertise, and in some
cases beneath them!
 Consequently, some providers feel
uncomfortable with communications
activities.
Specific Guidelines for Developing Service Communications
There are several communications guidelines that were
developed as solutions to challenges created by the
intangibility, inseparability, heterogeneity, and
perishability inherent in service products:
1. Develop a word-of-mouth communications network
2. Promise what is possible
3. Tangibilize the intangible
4. Feature the working relationship between customer and
provider
5. Reduce consumer fears about variations in performance
6. Determine and focus on relevant service quality dimensions
7. Differentiate the service product via the service delivery
process
8. Make the service more easily understood
Develop a Word-of-Mouth Communications Network
 Consumers of services often rely on personal sources (e.g., friends, family,
co-workers) of information more than nonpersonal sources (e.g., mass
media) to reduce the risk associated with a purchase.
 Given the importance of personal sources, communications should be
developed that facilitate the development of a word-of-mouth network.
 Communications that feature satisfied customers and promotional
strategies that encourage current customers to recruit their friends are
typical.
 Other communication strategies such as presentations for community
and professional groups and sponsorship of community and
professional activities have also been effective in stimulating word-of-
mouth communications.
 In many ways, today’s customers and service firms can access and
generate more personal sources of information through the Internet via
blogs, social networks, and review and opinion websites than any prior
generation
 Promise What is Possible

 In its most basic form, customer satisfaction is developed

by customers comparing their expectations to their
perceptions of the actual service delivery process.
 Making promises the firm cannot keep initially increases
customer expectations but subsequently lowers customer
satisfaction when those promises are not met.
 Two problems are associated with overpromising.
1. Customers leave disappointed, and a significant loss of
trust occurs between the firm and its customers.
 Moreover, disappointed customers are sure to tell
others of their experience, which increases the fallout
from the experience.
2. It will have negative impact on the service
firm’s employees
 Working for firms that routinely make false
promises places employees in compromising and
often confrontational positions.
 Front-line personnel are left to explain repeatedly
to customers why the company cannot keep its
promises.
 Given the link between employee satisfaction and
customer satisfaction, creating expectations that
cannot be met can have devastating long-term
effects.
Tangibilize the Intangible
 Given the intangible nature of services, service products are
often abstract in the minds of potential customers.
Consequently, one of the principal guidelines for advertising
a service is to make it more concrete.
 Insurance companies face this challenge on a daily basis
— how to tangibilize the intangible? One possible
solution for many insurance companies has been to
utilize tangible symbols to represent their companies
 Other service firms have tangibilized their service
offerings by using numbers in their advertisements, such
as, “We’ve been in business since 1925,”or “Nine out of
ten customers would recommend us to a friend.”
Feature the Working Relationship between
Customer and Provider
 Service delivery is an interactive process between the
service provider and the customer.
 Because of inseparability, it is appropriate in the firm’s
communications to feature a company representative and a
customer working together to achieve a desired outcome.
 The tax accounting firm H&R Block’s advertising
commonly shows a company representative and a customer
interacting in a friendly and reassuring manner. Many
financial institutions, legal firms, and insurance companies
also follow this same model.
 The advertising of services must concentrate not only on
encouraging customers to buy, but also on encouraging
employees to perform.
Reduce Consumer Fears about Variations in
Performance
 The firm’s marketing communications can also minimize the
pitfalls of heterogeneity in the customer’s mind.
 To enhance the perception of consistent quality, the firm’s
communications should provide some form of
documentation that reassures the customer.
 Typical examples include stating the firm’s performance
record through numbers as opposed to qualitative
testimonials.
 The use of “hard” numbers in advertisements reduces the
consumer’s fear of variability and also tangibilizes the
service, as mentioned earlier.
 For example, statements such as 9 out of 10 doctors agree
that service “X” is the best, or our company maintains a 98
percent customer satisfaction level helps to reassure
customers about the consistency of the firm’s performance.
Determine and Focus on Relevant Service
Quality Dimensions
The reasons customers choose among competing services are often closely
related to the five dimensions of service quality — reliability, responsiveness,
assurance, empathy, and the quality of the tangibles associated with the
service
However, it is common that some features are more important to customers
than others.
 For example, 30 percent of today’s airline customers list “safety” as one of their
top five considerations when choosing an airline. Consequently, it would be
appropriate for airlines to emphasize the assurance dimension of service quality
by featuring the airline’s safety record, maintenance and training programs, as
well as any certified aspects of their particular airline operation.
 One marketing communication campaign that backfired promoted a hotel as one
of the tallest hotels in the world. Although this reinforced the tangible
dimension of service quality, this particular tangible component was not very
important to customers in choosing hotels. In fact, many customers who had
even the slightest fear of heights avoided the hotel for fear of being placed on an
upper floor.
 Differentiate the Service Product via the Service
Delivery Process
 Identifying the various inputs into the process, which contributes to a
competitive or quality advantage, and stressing these inputs in the firm’s
advertising is likely to be a successful approach.
 For example, on the surface, it appears somewhat difficult to differentiate one
tax accountant from the next.
 However, if we consider the process of obtaining a consultation, which consists
of calling to make an appointment, interacting with staff at the front desk, the
appearance of the office in the reception area where the client is waiting, the
appearance of the accountant’s office, the interaction between the client and the
accountant, and the payment procedures, several potential areas for
differentiation arise.
 Outlining the various inputs within the service delivery process may indicate
key competitive and/or quality advantages that traditionally have been
overlooked.
 As a result, these competitive differences can be stressed in the firm’s
marketing communications and establish a key positioning strategy in the
market.
 Make the Service More Easily Understood
Services can be more fully explained to potential customers via the
communication mix by presenting the service as a series of events.
 When questioned, consumers often break down the service experience
into a series of sequential events. Understanding the sequence permits
the service provider to view the service from the customer’s
perspective.
 For example, bank customers may first view the external building,
parking facilities, landscaping, and cleanliness of the grounds. When
entering the bank, customers notice the interior furnishings, odors,
music, temperature, and service personnel. While conducting bank
transactions, the appearance and demeanor of specific contact
personnel become additional quality cues.
 Hence, perceptions of quality are assessed at each stage of the service
encounter. Communication strategies developed from the sequence-of-
events perspective consider the customer throughout the process and
highlight the firm’s strengths in each area.
 END OF
CHAPTER
SEVEN