WRITER: Byron Sharp
WRITER: Eirian Chapman/The Jacky Winter Group
We’ve heard it all before, “services are different”. Yes, they are, but the important question is how much do the differences matter for marketing strategy? The answer is not much.
Professional services all have their peculiarities, but how different is marketing strategy for products and services?
Marketing professional services requires knowledge of how brands compete, grow and decline, and this is the same for both products and services. Understanding your service brand's distinctive assets will help amplify the effectiveness of your marketing strategy.
Without doubt, professional services have their peculiarities. All markets do. From universities to dental practices there is a great deal of personal contact between client and provider — relationships really do matter. Price competition exists, but it isn’t as obvious among services as it is among products on supermarket shelves — as management consultants and advertising agencies seldom publish price lists. In fact, many professional services, from legal to medical practices, do very little advertising at all.
Learning about the peculiarities is essential for someone starting in professional services marketing because they can affect tactical implementation. But it’s also essential to know how brands compete, how brands grow and decline, so that the right strategic goals are set.
These strategic fundamentals are based on discoveries of marketing science; discoveries that have been emotionally confronting for product marketers, yet interestingly, haven’t been anywhere near controversial for professional services marketers.
It seems hard to believe today, but many professions first refused to believe the first scientific discoveries: doctors first denied the need to wash our hands to prevent germs and infection; and engineers were initially sceptical of the need for science — after all they’d built pyramids without it, so where did it add value?
Many professions refused to believe the first scientific discoveries.
It was the same for marketing science. When the empirical discoveries of the Ehrenberg- Bass Institute started attracting global attention there were, unsurprisingly, some marketers who found the evidence hard to believe. Brand consultants felt particularly threatened and wanted to avoid the implication that they’d been giving bad advice. So, there were claims to justify why they should ignore the science: it’s different in B2B markets; it’s different in France; banking is highly regulated; luxury brands have different rules; consumer behaviour is different in developing markets.
But, when the same law-like patterns appeared across all these conditions, their views began to change – where buyers choose from competing brands, they always vie for custom and loyalty.
The discovery that receives most attention is that brand growth comes largely from winning more customers. For service marketers who deal with intermittent purchases, this seems logical, but for product marketers it was a revelation. To quote from an internal briefing document from a large US household product marketer: “we used to think that growth came from targeting loyal heavy users and getting them to buy more, but now we know the marketing science.”
Brand growth largely comes from winning more customers.
Some years ago, a sponsor of the Institute, Kraft USA, checked this discovery against their brands and confirmed that when any of their brands grew it was almost always achieved by increasing the size of the brand’s customer base. Yet, when they did an analysis of their brand plans, the vast majority were aiming to increase loyalty rather than win new customers. A lucky find.
Interestingly, this discovery was completely uncontroversial for professional services marketers, who instinctively work to reach more customers. Of course, professional service providers work hard to impress their clients so that they gain even more work from them (otherwise the business goes backwards), but no one expects to grow their professional practice without winning new clients. As such, winning new clients is usually the number one goal for the marketing and sales function of any professional services firm.
A less well known but even more confronting discovery of marketing science is that differentiation is of far less strategic importance than claimed by marketing textbooks. Practically all the greatest brands in the world are not perceived as particularly differentiated by their customers, yet these brands survive, earn trillions in revenue, are profitable, and have billions of loyal customers.
A number of marketing science discoveries reinforce this low differentiation picture: competing brands sell to strikingly similar customer bases (measured via demographics, attitudes, beliefs, media consumption, and so on); competing brands share customers in line with their size (unaffected by brand image differences and even many functional differences); and brands all have similar loyalty levels depending on their size, not their differentiation.
To say this was a shock to consumer product marketers would be an understatement. These are the people who bought books with strong (and scary) titles like ‘Differentiate or Die’. Their market research providers tortured data to highlight tiny differences in brand perception data because the idea that brands compete directly, was simply not in line with ‘theory’.
Yet again, in the world of professional services this was far less controversial. Each year, thousands of new accountancy and legal graduates enter the workforce. Yes, they vary in their abilities, but they work in practices that offer much the same services as rival practices; they deliver services within the laws and conventions of their country; their clients look for a good, sound, compliant, lawful service (few of us are looking for an accountant who does things in a dramatically different way, indeed the term ‘creative accounting’ is not a positive one). Even in a creative area, rival advertising agencies or architectural design practices offer a very similar suite of services and deliver them in very similar ways. The firms even have similar sounding names — Bogalty, Taylor & Simpson could be an advertising agency, a patent attorney, a management consultancy, or an interior design partnership.
The challenge for all brands is to get a potential customer to think of you at all.
Of course, there are differences between professional services providers because they employ different individuals, and people vary considerably. There is also geographical differentiation. Plus, many firms choose to specialise in particular types of services. So, while there is some differentiation, it’s hardly the sort of brand image differentiation or category-disrupting functional feature differentiation of marketing textbooks.
In terms of marketing strategy, the world of professional services marketing is not unlike consumer product marketing — something many professional services already knew: growth comes from expanding the client base, and that requires winning many new clients; maintaining sales revenue requires winning new clients; and professional service firms compete largely head on within their geographical markets.
If there is one surprise in all this for (some) professional services marketers, it’s that like ‘low involvement’ product categories (such as groceries) are competing to build a brand and to become known by as many potential clients as possible. As with consumer brands, it’s an ongoing battle for attention.
The lesson for professional service providers then, is that building reputation depends less on convincing potential clients to think well of you, and more about getting potential clients to think of you at all.
DISTINCTIVE ASSETS: MAKING SERVICE BRANDS TANGIBLE
Writer Professor Jenni Romaniuk
One of the key challenges for a service brand is making something intangible (like insurance) have tangibility for the customer. Tangibility gives a brand a stronger anchor in the minds of buyers, making it easier to attach messages to build the brand’s mental equity. By giving physical qualities to an intangible service, distinctive assets can help people identify and find the brand in all its environments, thereby amplifying the effectiveness of all other marketing activities.
DISTINCTIVE BRANDS ASSETS CAN:
- BOOST CREATIVE: Distinctive assets provide more creative alternatives to directly showing the brand name. For example, the Alexandr Orlov meerkat, best known for his presence in comparethemarket.com, provides a focal point for creative over many different campaigns.
- EXPAND BRAND FOOTPRINT: Distinctive assets make the brand footprint larger when used in conjunction with the brand. For example, the 'Ahhh' preceding 'Allianz' heralds what's coming, but can also work on its own. Similarly, Industry SuperFunds' use of the open diamond hand gesture provides ongoing branding moments at critical points of an advertisement.
- ENHANCE MEMORABILITY: Non-word elements such as colour, visual images and sound, provide a multilayered process for entry into consumer memory. This can enhance brand memorability. So, the speech mark symbol for Vodafone can visually signal the brand while you read the text on an outdoor advertisement.
- ENABLE EASY IDENTIFICATION: Distinctive assets can also be used to make brand identification easier outside of the advertising context. For example, when you see yellow diamond with a little black piece in the corner, you know that a CommBank ATM or branch is close by.