Harry Beckwith - Selling the Invisible: A Field Guide to Modern Marketing

Copyright 1997 by Harry Beckwith

All rights reserved.

Warner Books, Inc., Hachette Book Group, 237 Park Avenue, New York, NY 10017

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The Warner Books name and logo are trademarks of Hachette Book Group, Inc.

First eBook Edition: March 1997

ISBN: 978-0-446-93003-1

Book design and composition by L&G McRee

Contents

To Susan, and miracles

You cant see themso how do you sell them?

Thats the problem with services.

I first learned this fourteen years ago when I wrote my first ad for a service. It wasnt a product. So I couldnt show the service roaring along S-curves on Big Sur, draped on Cindy Crawford, or served on fine china. I couldnt show the service doing anything, because services are invisible; services are just promises that somebody will do something.

How do you sell that?

Years of wondering and twenty-two years of working as a service and with servicesincluding with four of Americas best premier service companies led to this book.

This book begins with the core problem of service marketing: service quality. It then suggests how to learn what you must improve, with examples of techniques that work. It then moves to service marketing fundamentals: defining what business you really are in and what people really are buying, positioning your service, understanding prospects and buying behavior, and communicating.

Peering through Harvard Business Schools catalog of marketing case studies, I discover that only one in four cases involves a service.

Two weeks later I see the newest Fortune 500, which for the first time includes service companies. Sixty percent of the companies are referred to as services, but even that figure understates the role of services in our economy, because many of the manufacturers listed in the Fortune 500 are, on closer inspection, something different. Industrial giant General Electric actually derives 40 percent of its revenues from services, for example. Nike, presumably a running shoe manufacturer, does not make shoes. It only designs, distributes, and markets them. Nike is primarily a service company.

Almost three in four Americans work in service companies. By 2005, eight in ten will. But there is the Harvard Business School catalog, implying something different.

In short, America is a service economy with a product marketing model. But services are not products, and service marketing is not product marketing.

A product is tangible. You can see it and touch it. A service, by contrast, is intangible. In fact, a service does not even exist when you buy one. If you go to a salon, you cannot see, touch, or try out a haircut before you buy it. You order it. Then you get it.

You can use your other senses to evaluate most products, too. Take a new car:

You can admire a car from dozens of angles. You can feel the smooth finish against your palm and the comfort of the leather seats against your back. You can hear the steady rumble of the engine, the faint hum of the electric windows, and that special thud of the car doorfor most people, the ultimate test. You buy with your nose, too, seduced by that newcar smell the car makers cleverly sneak in.

You cannot sense much about a service, however. You cannot hear the hum of a tax return being prepared, smell a good divorce attorney, or try on a dry cleaner to see if it flatters you. In most cases, you buy a service touch, taste, feel, smell, and sight unseen.

Few services have price tags. You interview a service to redo your kitchen, revise your companys pension plan, or cater your anniversary party. At that moment you probably do not know the cost and fear what it might be. A representative of the service promises to go back to work up an estimate. At that moment you are not sure you will be able or willing to pay the amount the firm eventually quotes.

As a result, you feel even more uncertain and fearful.

You usually know when a product fails. The stereo stops playing, the clutch stops clutching, the milk tastes terrible. Knowing when a service fails is much harder. Was that good advice from your benefits consultant, or good painting from your house-painterthat is, was it the service you bargained for? Who knows?

Because most product failures are obvious and provable, most products can be warranted. Most services cannot be. As a result, your only recourse for most service failures is either painful negotiation or agonizing litigation.

So you buy a service with no guaranteesand even more uncertainty.

Manufacturers make products using a well-tested and monitored process that ensures consistent quality. Service companies deliver their product through a series of acts that rarely can be routinized into a reliable process. No genius has devised a process, for example, for producing consistently good print advertisements.

And it is very hard to manage those limited processes through which most services are delivered. Take an advertising example again. An agencys account supervisor goes out on a photo shoot, downs four banana daiquiris at the hotel bar afterward, and then tries to lure the female client up to his room. She fires the agency the next afternoon.

What process could possibly have prevented that service failure?

So compared to products, services are loose cannons on deck, capable of pivoting around and blowing up the ship any minute. The poor captain rarely feels in control, and the poor prospect often feels just as worried.

The products we buy are built miles away by people we have never met. So we rarely take product failures personally. The services we use, by contrast, usually are provided by people we have met or at least spoken with. When that person fails to do what she promised, we often take it personally. We ask, How could you do this [to me]? while the service provider explains, prays, curses, and backpedals furiouslyall at the same time.

So as a service marketerdoctor or architect, dry cleaner or accounting firm, broker or house-painteryou face prospects almost shaking with worry, and sensitive to any mistake you might make. That is where your marketing must start: with a clear understanding of that worried soul.

Even if you do not consider yourself a service marketerif your business is pacemakers, cars, or software, for examplethis book applies to you, too. Because chances are you a re a service marketeror should be. If you make pacemakers, you know that every time a salesperson defects to a competitive pacemaker company, the doctors served by your salesperson defect, too. Most doctors do not buy pacemakers; they buy that expert pacemaker salesperson who can go into the OR and advise on the device, procedure, and programming. Pacemaker buyers buy a service.

Similarly, many people who buy Saturn automobiles actually buy the intangible services that Saturn offers: no-hassle pricing and vigilant service and maintenance. The car merely gets Saturn into the game; the service makes the sale. Saturn drivers buy a service.

If you sell software, you know that your core product is the software, but that the critical part of your product is all the augmentations: the documentation, toll-free services, publications, upgrades, support, and other services. Your users are buying a service.

Pacemakers, Saturn cars, and software remind us that we live in the age of commodities. New technologies allow manufacturers to copy products with astonishing speed. Product distinctions, the historic centerpiece of product marketing, exist only brieflyand in the prospects minds, often not at all. Faced with products just like their competitive products, todays product marketers typically have two choices: reduce cost or add value.

And what is that added value, almost without exception? Services. Take, as a vivid example, Levis recent introduction of Personal Pair jeans. With this service, a clerk measures the female customer, then transmits the measurements over the Internet to the cutters, stitchers, and washers who then make the jeans and ship them via FedEx to the buyer. Those old Levis jeans of the old economy were products; these new Levis jeans are a service. Virtually everyone forecasting the future says that customized products like Personal Pair jeans will become even more prevalent. And with that, more and more products will become services.