What is Service Marketing & Why is it so important to the Economy?

Summary

In this video, Professor Wolters explores the unique challenges of service marketing, which differs significantly from product marketing. He highlights the importance of customer experience in services like education, financial advising, and healthcare. The professor explains how service marketing often revolves around customer relationships rather than the product itself, using examples like favorite restaurants and accountants. He also introduces key concepts in service marketing, including external, internal, and interactive marketing, emphasizing the role of employee training in customer interactions. Ultimately, the video underscores the critical role services play in the economy and marketing strategies.

Takeaways

• 😀 Marketing services like financial, medical, and educational services is very different from marketing products.
• 😀 Products can be touched, seen, and experienced directly, while services are intangible and depend on customer experience.
• 😀 Over 75% of the US economy is driven by services, which is why the economic impact of the Coronavirus was so significant.
• 😀 Service marketing focuses on delivering a positive customer experience rather than just the product or service itself.
• 😀 The service experience, such as visiting an amusement park or attending a class, is often more about the feeling and relationships rather than the tangible aspects.
• 😀 Different perspectives and expectations can lead to vastly different customer experiences with the same service.
• 😀 Service marketing emphasizes customer relationships, as repeated interactions and trust can lead to loyalty, as seen with personal accountants or service providers.
• 😀 Internal service marketing is important, as companies should also market their services to employees to improve internal culture and morale.
• 😀 Interactive service marketing focuses on the direct interaction between employees and customers, where the quality of the interaction plays a critical role.
• 😀 Employee training is crucial in service marketing, especially when handling upset customers, to ensure positive interactions and customer retention.
• 😀 Service marketing spans across various industries, including education, finance, healthcare, and even garbage collection, emphasizing the broad importance of services in the economy.

Q & A

What is the key difference between marketing products and services?

Marketing products is focused on tangible aspects like features, appearance, and usability. For example, a phone can be marketed based on its speed, screen, and functionality. In contrast, marketing services involves intangible factors, such as the experience and customer relationship, which are harder to showcase and measure.

Why are services so crucial to the U.S. economy?

Services are a driving force behind the U.S. economy, accounting for over 75% of it. Industries like financial, medical, educational, and legal services contribute significantly to economic activities. The impact of service-based businesses was evident during the Coronavirus pandemic, where many services were halted, resulting in economic downturns.

How does the delivery of a service impact the customer experience?

The delivery of a service can drastically affect customer satisfaction. For example, two people may undergo the same surgery with different outcomes based on their expectations and the doctor's delivery of care. The experience of the service, including the interaction with employees and the context, influences how the customer perceives the quality of the service.

Why is building customer relationships important in service marketing?

In service marketing, customer relationships are key to retention. For instance, customers tend to return to the same service providers, like accountants or doctors, because of the personalized care and established trust. This relationship goes beyond just the service provided; it's about the ongoing experience and connection that encourages repeat business.

What is the concept of external service marketing?

External service marketing refers to the traditional marketing efforts made by a company to attract customers. This includes advertising and promotional activities aimed at promoting the company's products or services to the external market.

What is internal service marketing, and why is it important?

Internal service marketing involves promoting services within an organization to its own employees. This can include informing staff about benefits, internal events, or new programs. It is important because it helps employees feel engaged and valued, which can lead to better customer service and a more positive work environment.

How does interactive service marketing differ from other forms of service marketing?

Interactive service marketing is focused on the direct interaction between a customer and an employee. Unlike external marketing, which is more promotional, interactive service marketing emphasizes personal selling and customer engagement during face-to-face encounters. Employee training is crucial in this context to ensure high-quality interactions.

Why is employee training essential in service marketing?

Employee training is essential because it equips service employees with the skills to handle customer interactions, especially in challenging situations. For instance, well-trained staff at airports can remain calm and professional even when dealing with frustrated passengers, helping to diffuse tension and improve customer satisfaction.

What are some examples of services that rely heavily on customer experience?

Examples of services that rely heavily on customer experience include amusement parks like Disney World, healthcare services, and educational services. In these cases, the overall experience, from the quality of interaction with staff to the environment and emotional response, plays a critical role in how the service is perceived.

What role does perspective play in service marketing?

Perspective plays a crucial role in service marketing because customers often perceive the same service differently based on their personal expectations. For example, one patient may be satisfied with a surgery result, while another may have unrealistic expectations and be dissatisfied, even though the service provided was similar.