Marketing Challenges in the Service Business

by Chris Joseph; Updated September 26, 2017
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Those who work in a service business often face greater marketing challenges than those who offer tangible products. The service marketer typically does not have the advantage of demonstrating the physical features of a product, so it may be difficult for the prospect to comprehend the benefits of the service. Additional creativity is often required to market services successfully.

Marketing Intangibles

Unlike the marketing of products, which allows the prospect to use five senses as part of the evaluation process, selling services requires an explanation of an intangible product. As a result, it may be harder to envision how the service can benefit your potential customer. The prospect also may have difficulty determining if the value of the service is worth the asking price.

Developing Trust

Marketers of services may have a more difficult time in developing the trust of the prospect. For example, an insurance agent is essentially marketing a promise that his company will deliver when it comes time to pay a claim. If the agent does not appear trustworthy or if his company has a poor reputation, he will have a hard time convincing the prospect to purchase a policy.

Extra Competition

Service companies are not only competing against other companies in the same market, but sometimes against their prospects as well. For example, a company that markets a bookkeeping service for small businesses may run into a situation where the prospect decides to do the accounting as a way of minimizing expenses.

Emphasizing Service Instead of Features

Marketers of services need to focus on the customer service aspect of what they are selling, as opposed to the features. For example, instead of emphasizing a multi-car discount or first accident forgiveness, which are offered by many insurance companies, the agent should make the prospect feel that personal attention will be given in the time of need to ensure that the policy provisions are executed properly.

Creating a Need

Service marketers may have more of a challenge in creating a need for what they are selling. While an individual may understand the necessity to purchase a new car, such as when a current vehicle breaks down, the business owner may not understand why the purchase of advertising is necessary. The salesperson must create a need for the service by showing examples of how other businesses increased revenues with an advertising campaign.

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