Back in the 80’s when the federal government deregulated telecommunications by breaking AT&T into several different regional companies (e.g. BellSouth, Bell Atlantic – most of whom have been reacquired by AT&T) faced for the first time in their company history with competition, many of those companies rushed out and hired “expert marketing talent” from P&G, Lever, and other consumer packaged goods companies.
The result was not pretty. The newly hired marketing gurus struggled with a lack of performance data, as well as the lack of marketing culture. Many of them left within 12 to 18 months.
But it wasn’t all about data or culture. Marketing a product (like shampoo or dog food) is a very different challenge than marketing a service (like telephone communications or legal advice). If you want to transition from marketing products to services or vice versa, you have to know, understand, and most of all respect these differences–and understand these differences to effectively promote and sell. Understanding the different challenges in product and service marketing can help you establish the right approach.
6 Key Differences Between Marketing Services and Products
- Products are tangible – they are physical, you can touch, see, feel and smell them. Services are intangible. Often part of the challenge of marketing services is creating tangible elements that connect the consumer to the service brand.
- Need vs. Relationship. Products tend to fill a need or want for the customer. Marketing services is more often about building relationships and trust. When you buy a car, you leave with the car and continue to see it and use it. When you leave your doctor’s office, you might not have anything to take away from the transaction.
- One vs. Many. Physical products usually come in many formulations. Clothes come in different styles, colors, sizes. Dog food comes in different ingredient combinations. Services typically do not offer multiple formulations. As a doctor’s visit is a doctor’s visit, whether you are going for tennis elbow or diabetes. (You might choose different service providers, but the basic elements will be the same.)
- Comparing Quality. It is much harder for consumers to evaluate the quality of the service received than the quality of a product purchase. If you buy an anti-dandruff shampoo and you have less dandruff, it works. But did you lawyer draw up a good divorce for you? You might not know until you get down the road (or back in court.)
- It is much easier to return a product than a service, because a service is consumed as it is offered. It can be done, but it is usually much harder for the consumer.
- Every day that a service is offered and not consumed is lost forever. If I don’t sell my hotel room tonight, I cannot ever sell it – it is gone forever. Products on the other hand have a longer life. If I put a box of cookies on the shelf and don’t sell it today, I can still sell it for some period of time beyond today.
As technology gives more and more products a service element (as in customer service, online sails, instruction manuals, communities, etc.), products begin to take on some of the elements of services. But in general, services and products require vastly different marketing approaches. Understanding the basic nature of what you are selling could lead to interesting and valuable insights for marketers.