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By Indeed Editorial Team
Updated July 8, 2022 | Published May 11, 2021
Updated July 8, 2022
Published May 11, 2021
The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed’s data and insights to deliver useful tips to help guide your career journey.
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Service-based companies enable customers to purchase the skills or services of their employees, such as a plumber, a lawyer or consultant. Since services are intangible and differ from physical products you can purchase, the marketing strategies advertisers use to promote them also differ. If you work in advertising, then understanding services marketing may help you increase sales, generate more leads and improve brand awareness.
In this article, we define services marketing, explore how it differs from product marketing and share tips to help you create an effective services marketing strategy.
What is services marketing?
Services marketing is a form of marketing businesses that provide a service to their customers use to increase brand awareness and sales. Unlike product marketing, services marketing focuses on advertising intangible transactions that provide value to customers.
Advertisers use effective services marketing strategies to build trust with their customers and show them how their service can benefit them. Businesses may base their services marketing strategies on the promotion of ideas, benefits and promises to help them sell their services.
For example, a company that provides wellness coaching may promote the benefits of adopting a healthier lifestyle, the promise that they can help their customers achieve their fitness goals and the idea that incorporating an effective wellness routine is easier with the help of a certified coach.
Related: 12 Marketing Tips for Your Marketing Campaign
Who uses services marketing?
Companies that provide a service use services marketing strategies to reach potential customers. Popular examples of service-based industries that use this form of marketing include:
Health and wellness
Tourism, leisure and entertainment
Design, marketing and sales
This type of marketing may include both business-to-consumer (B2C) and business-to-business (B2B) advertisements, depending on the service. Marketing and sales professionals who work in these industries can use services marketing strategies to increase brand awareness, generate leads and acquire new customers.
Read more: 15 Service Business Examples
How services marketing differs from product marketing
While companies use both services marketing and product marketing to acquire new customers, marketing services differs from marketing products in a number of ways. Some of the key differences between these two types of marketing strategies include:
1. Tangible products vs. intangible services
Tangible products may be easier to market than intangible services because advertisers can easily show them and demonstrate how they work. It can also be easier for customers to assign value to physical items. Since services are intangible, advertisers often focus on marketing the people who provide the service and building relationships with potential customers. This can help build trust and generate sales.
Related: Goods, Services and the Differences Between Them
Unlike products that are often designed one way and sold to customers as is, businesses can customize their services to meet the unique needs of each customer.
Example: A company that offers digital marketing services may customize which platforms it focuses on to fit the needs of each individual customer. As an advertiser, your services marketing strategy can highlight this by focusing on how you can adapt a service to better suit a wide range of different customers.
When a customer purchases a product, they own it. This means they can continue to use the product for as long as they see fit and resell the product if they desire to do so. When a customer purchases a service, the business still retains the employees, skills and capabilities that provided the service. While product marketing may focus on why a customer wants to own an item, services marketing focuses on building the brand and the personality of the service provider.
Example: A business that provides personal counseling services may highlight how empathetic, professional and well-educated their staff is to encourage potential clients to schedule a session with them.
Related: What Is the Service Marketing Triangle and How Does It Work?
While customers who are unhappy with a product may return it, customers who are unhappy with a service cannot return it after they have used it. This is why services marketing focuses heavily on building trust with their customers and continuing to provide an excellent customer experience at every interaction with their audience. Service-based businesses also want to ensure their customers are happy so they continue to purchase services from them.
Example: A hair salon that hires personable and talented hairdressers can increase the number of repeat customers and referrals they receive because customers trust them to provide excellent service.
Related: 7 Ways To Gain Customer Trust (And Why It’s Important)
Usually, businesses provide services to customers at a specific time or for a specific duration. After this, customers must renew the service agreement to continue receiving the service. However, a customer may purchase a product once and continue using it indefinitely. Because of this, services marketing typically focuses on selling subscriptions, encouraging referrals and retaining customers instead of selling customers a product one time.
Example: A hotel might offer customers who have recently booked a stay with them a free night to use on a future reservation. This can encourage customers to return to the hotel during their next vacation.
6. Market size
The market size for service-based businesses may be smaller than the market size for product-based businesses. This is because most businesses can ship products to customers globally, while many businesses provide services only to a specific geographic region.
Example: A landscaping company may only serve customers within a 50-mile radius of their business location. As a result, advertisers who market services may place a heavier emphasis on developing strong relationships with their customers to earn referrals and repeat business. They may also focus on promoting upgrades to increase the amount of revenue they can collect per customer.
Related: How To Calculate Market Size
Tips for creating effective services marketing strategies
Here are some tips to help you create an effective services marketing strategy for your next campaign:
Incentivize potential customers. One strategy to market your services is to provide customers with an extra incentive. Consider offering new customers a one-time discount or a free gift as part of a special promotion.
Implement a referral program. Another great way to market your services is to encourage your current customers to tell their friends, family members and colleagues about your business. You can offer customers a discount, upgrade or another incentive for every person they refer that signs up for your service.
Nurture existing customer relationships. Continue to check in with your current customers regularly to ensure they are happy with your service and identify any additional needs they may have. You can reach out to them via email, phone call, survey or by providing exclusive discounts to current customers.
Embrace digital marketing. In addition to creating a professional website to promote your services, consider creating business pages and profiles on popular social media platforms. This can make it easier for potential customers to connect with you and learn more about the services you provide.
Get involved with your community. Get involved by attending trade shows, networking events and volunteer opportunities. This can help you showcase your values as a service-based business, meet potential customers and increase referrals. It can also help you form valuable partnerships with other businesses in your area.
Ask for customer testimonials. Incorporating customer testimonials into your services marketing strategy can help you generate trust with your target audience. Customer testimonials can be effective because they show people how you have helped other customers who may have similar needs.
Showcase your awards and badges. If you’ve received any service verification awards or badges that set your business apart from your competitors, consider incorporating them in your services marketing strategy.
Focus on the process. While your customers are interested in the end result your service can provide, the way you offer your service can also provide value. Let potential customers know about unique features you offer such as flexibility, responsiveness, personalized services or payment plans.
Highlight your people. Show the people behind your services through employee advocacy. Include employees in your marketing materials. You can use professional photos of your team, video interviews or quotes from your employees.