The Nature of Services 201
see the exact results before the purchase, just as the patient in the psychiatrist’s office
cannot know the exact outcome before treatment.
To reduce uncertainty, buyers will look for signs or evidence of the service qual-
ity. They will draw inferences about quality from the place, people, equipment, com-
munication material, symbols, and price that they see. Therefore, the service
provider’s task is to “manage the evidence,” to “tangibilize the intangible.”^6 Whereas
product marketers are challenged to add abstract ideas, service marketers are chal-
lenged to add physical evidence and imagery to abstract offers. This is why Allstate
uses the slogan “You’re in good handswith Allstate.”
In general, service marketers must be able to transform intangible services into
concrete benefits. Consider Dun & Bradstreet, a $2 billion firm with a database of 11
million U.S. firms that businesses can access to check the creditworthiness of their
commercial customers. D&B’s senior VP of marketing says, “If we’re calling on a
bank’s credit manager, we’ll research the bank’s portfolio of customers, and using
the information in our database, score them based on their creditworthiness and sta-
bility and say, ‘You have X% of customers in the high-risk category and X% in low-
risk.’”^7 This translates D&B’s intangible services into tangible benefits for banking
customers.
Inseparability
Services are typically produced and consumed simultaneously, unlike physical goods,
which are manufactured, put into inventory, distributed through resellers, and con-
sumed later. If a person renders the service, then the provider is part of the service.
Because the client is also present as the service is produced, provider-client interac-
tion is a special feature of services marketing—both provider and client affect the
outcome.
Often, buyers of services have strong provider preferences. Several strategies exist
for getting around this limitation. One is higher pricing in line with the provider’s lim-
ited time. Another is having the provider work with larger groups or work faster. A third
alternative is to train more service providers and build up client confidence, as H&R
Block has done with its national network of trained tax consultants.
Variability
Because services depend on who provides them and when and where they are pro-
vided, they are highly variable. Knowing this, service firms can take three steps toward
quality control. The first is recruiting the right service employees and providing them
with excellent training. This is crucial regardless of whether employees are highly
skilled professionals or low-skilled workers.
For example, the California-based Horn Group handles public relations for
high-powered Silicon Valley software makers and technology consultants. Founder
Sabrina Horn invests heavily in training her employees and in building morale and
enthusiasm. She has developed education programs that include lunchtime seminars
on everything from how to write a press release to how to manage an account.
Employees also receive tuition reimbursement for continuing education.^8
The second step is standardizing the service-performance process throughout
the organization. Companies can do this by preparing a flowchart that depicts every
service event and process. Using this flowchart, management can identify potential fail
points and then plan improvements. The third step—taken by Priceline.com and
many other service firms—is monitoring customer satisfaction through suggestion
and complaint systems, customer surveys, and comparison shopping.