Businesses with past success built upon the quality and innovation of their products may falter if their concept of service (repair break/fix) is only as a support to the manufacturing operation. However if the quality and innovation of product is supported by a similar level of quality and innovation in service, this can provide an excellent way to build and sustain long-term relationships. Retaining customers means that a reputation has to be sustained over an extended period, and the service aspect of the relationship can provide a bridge should there be a problem with a faulty product. If the concept of service has evolved simply from one of reducing the cost of manufacturing errors, and does not focus on the optimum value derived by the customer from the application of the product, the relationship may not be sufficiently robust to resist a stress. This is best illustrated in figure 1, which shows the effort required to build satisfaction in a product into long-term loyalty. Unless satisfaction and loyalty are high, the value of a customer as a promoter is minimal, but promotion by a customer will have immense value.
Service Marketing Strategy
How to turn your customer into your best marketer (Summary)
Many companies have split personalities over defining service as a marketing tool. On the one hand they recognise that good service brings value to their customers and might be used as a reason to purchase; on the other hand advertisements and salespeople rarely talk of service preferring to focus on the Brand and features. Once an item is purchased, excellent service becomes a real motivator of satisfaction and serves to reinforce loyalty.
It is becoming apparent that the best service is marketed through customers (Viral marketing) offering recommendation, referral and opting to re-purchase. Marketing the service offering is still considered by some as anathema and probably stems from a heritage of opinion based on outdated service systems. This legacy is detrimental, particularly if the consequence is that service is not marketed and business efficiency is sacrificed. Service organisations were established to remedy manufacturing errors, so marketing service (if at all) was often simply the offer to fix a problem promptly so the impact on the user was minimal: the level of warranty on offer, usually only the minimum required to satisfy legal requirements. Once outside warranty, the customer would be expected to meet the cost of repair or replacement, so service evolved as a revenue opportunity for the business. As equipment became more reliable, the margin on service improved with little effort, but as quality improves, margins are narrowed, customer expectations and demands increase – resulting in the current scenario in which maintaining margins is a constant struggle.
