Operations Analytics/

Service Management in Key Sectors

LECTURE 5
Service Marketing and Customer
Relationship Management
Unique Aspects of Service Marketing:
§ Intangibility: Services are intangible and cannot be
touched or seen before purchase. Marketing efforts
often focus on conveying the value of the service
through other means, such as testimonials, guarantees,
or demonstrations.

§ Inseparability: Production and consumption of services

often happen simultaneously, making it challenging to
separate the service provider from the service itself.
Customer interactions with service providers
significantly impact the overall experience.

§ Variability: Services can vary in quality due to their dependence on factors like the service
provider's skills, mood, or the specific circumstances during service delivery.

§ Perishability: Unlike physical products, services cannot be stored for future use. Unutilized
service capacity is lost, emphasizing the need for effective demand management.

Developing Effective Service Marketing

Strategies
§ Service Quality: Emphasizing and maintaining high service quality is crucial. This includes
reliability, responsiveness, assurance, empathy, and tangibles.

§ Customization: Tailoring services to meet individual customers' unique needs and preferences
enhances the overall customer experience.

§ Memorable Experiences: Creating positive, memorable experiences fosters customer loyalty

and word-of-mouth promotion.

Consider Disney. They don’t just sell tickets to a theme park; they sell an entire experience. How
does that impact your decision to go back?

Customer Segmentation and Targeting in

Service Marketing
§ Understanding Customer Needs: Analyzing customer behavior and preferences helps divide
the market into segments based on similar needs and characteristics.

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§ Targeting: Once segments are identified, companies can target specific groups with
customized marketing strategies. This ensures that the service resonates with the intended
audience.

Companies like Spotify have nailed this by providing personalized playlists and recommendations.
How does that keep you hooked on to their platform?

Relationship Marketing and Customer Retention

Strategies
§ Building Long-term Relationships: Relationship marketing
creates and nurtures long-term customer relationships.
This involves personalized interactions and continuous
engagement.

§ Customer Retention: Retaining existing customers is often

more cost-effective than acquiring new ones. Loyalty
programs, exclusive offers, and excellent customer service
increase customer retention.

Let's take Amazon Prime as an example. Memberships encourage loyalty, and the more you use
them, the more benefits you get. How does that keep you coming back?

Leveraging Technology in Customer

Relationship Management
§ CRM Systems: Customer Relationship Management (CRM) systems enable companies to
manage and analyze customer interactions throughout the customer lifecycle.

§ Data Analytics: Data analytics allows companies to gain insights into customer behavior,
preferences, and trends, facilitating more targeted and personalized marketing efforts.

§ Multichannel Communication: Technology enables companies to interact with customers

through various channels, including social media, email, chat, and mobile apps, creating
seamless and integrated customer experiences.

For example, Salesforce helps companies keep track of every interaction, preference, and feedback.
How does that make the customer experience better?

Reference:

§ Service marketing and relationship management. (n.d.).

https://www.thinkhdi.com/library/supportworld/2012/service-marketing