Service offerings have kept me academic this week. I have been delving into the marketing greats to refine and kick around classic differentiation and it’s been blindingly interestingly scary.
I started my research by ogling Goggle, then tired of this and rang around a bit, doing what we know here as fixing; finding experts, asking dumb questions and squeezing them of opinion. I kicked off lucky with a particularly assertive Prof. telling me that “benefit selling is history and a 1970s hangover”, and that “marketing departments should grow up if we think this is going to continue”. I ended with a very friendly man in Halfords HQ explaining to me the difference Wefit has made to them both culturally and as a business.
If you agree that differentiation is competitive advantage, and you probably should do (unless you are a member of a swarming species). You should know that the world of how we differentiate is one that is on the move. Academia is leading marketing is some instances, and those commoditised product marketeers are providing us with loads of practices we can learn from.
The decline of product-based differentiation can be attributed to a couple of factors that both have some relevance to the brands we work with. Firstly, new levels of transparency are coming back to haunt us, the massive amounts of competitor intelligence is making us all morph into the same. We no longer can claim, be or propose product advantages without our competitors seeing them. Advantages that are now seen to be successful can be emulated, approved and broadcast in breakneck speed. I see claims and message data across a disease area, that tells me what’s working, what’s not, what’s hitting home and what is being discarded all the time. Those days of studying materials to try to figure out a competitors marketing strategy are long gone. The research guys, are pushing us towards what Mike my old economic teacher would call a perfect market – all of us seeing all. No geographical or physical divides to hide behind. We are all faster to react and as a result its simply much more competitive.
Alongside this it’s taking us a shorter time to develop products. The ability to shorten the product development cycle means that product based differentiation declines further, in essence we develop products that’s are at least as good as our competitors faster. In this environment, yesterdays prescription winner is today’s prescription qualifiers or whats we now relegate to ‘hygiene factor’ status. Our environment is pushing us towards a saturated state where product differences are homogenizing. So where does that lead us as marketeers?
In the commodised consumer world they have been investigating new concepts and techniques of differentiation for ages. And the results are challenging the character, substance and stability what we know as marketing. It’s forcing marketeers to look to new models, to look beyond the clichéd set of rational and emotional benefits to a brave new world where we look for other ‘stuff’ to bolt close to our offering. In this world many consider product benefits (those hygiene factors) and seek differentiation in the strange world of utilising service components within their offer. Giving us a new equation of marketing Product benefits + service components = differentiation.
In healthcare we are no strangers to service offerings. Having spent a few hours last week in a room of clients discussing this evolution, ,the over arching feeling was one of frustration. Service offerings have been used ad infinitum to little effect in our world. From nurse training, to patient materials, to service redesign packs. The view was one of anti-ROI and the massive need was how to wrap service offerings in something beyond corporate social responsibility. Tie them closer to marketing and kick the CSR approach, which tends to hope for some halo effect on relationship improvement into touch.
I dug out a couple of old masters. Levitt and Quinn. Both shouted this stuff all the time. 1972 saw Levitt giving us choruses of “There are no such things as service industries. There are only industries whose service components are greater or less than those of other industries. Everybody is in service”. And Quinn this time in 1990 who came over all Harvard with a “Management must break out of the mindset that considers manufacturing as separate from the service activities that make such products possible and effective” cry. Perhaps it’s time we took a good look at service, and saw what it could offer those of us who rather desperately need differentiation. Me too products queue up this might be the answer.
With this in mind, I thought here we should come to some consensus about service offerings, their development, how they interact, how to tie them into ROI. Actually make it ownable. More than just a composite of the competitors activities or a scavenger hunt of what’s good and glossy but actually a process to derive and develop a service offer that’s worthwhile, ownable, and evolving.
It’s been interesting stuff, and for those of you who haven’t fallen asleep by now. I think we have found a few sensible principles. This world of service differentiation requires us to evolve our approach from adding added value services to integrating service offerings. Rather than consider them as tactical activities, designed to bolt on alongside branded promotion, filling gaps, brought to us by reps, and advisory boards, we need to consider them NPD. Treat them like a product in the making. Give them the largess they deserve, they are after all going to be the big shifter in terms of sales. So we need to shift them upwards and alter our strategic development process to facilitate and develop them. There a whole process behind this – but it’s all seems to still make sense even when I give this the overnight test.
Additionally to this, service offerings need longevity, need to be active and genuinely fulfilled. Lessons from first Direct show us that it’s enough to get the delivery of a call centre experience bang on to make a tangible difference to the product experience.
The term experience dangles and interesting carrot here. I have been wanting to write a biggie on the role of experiences for some time I am not sure that this is the place. But it’s a interesting place where service offerings meet a planned user experience – it’s progressive planning and for me really sexy. Moving from the transactional world of benefits, requires us to assess and evaluate the experience around our products, and see whether elements of this experience can be influenced, improved and owned. It’s daunting to realise that what we must know is the sum of all experiences our customer has with a supplier of goods or services, over the duration of their relationship with that supplier. From awareness, discovery, attraction, interaction, purchase, use, cultivation and advocacy. Mapping consumer journeys is a tough task for us, and it rare that we are provided with a idea topographically of what’s around for us to get involved in. But it’s one that for the time being at least can provide us with the lead on the competition. An unrealised insight found here can lead to the all together important objective connection that the benefit game has failed to deliver.
There was quite an interesting article in Campaign last week on Tesco. As I’m sure you are all aware it’s a brand that only a couple of years ago was a powerhouse in a number of sectors – it’s now facing tough times. This demise is made all the more surprising (in my mind) as about 8 years ago it was being lauded as being a brand that could do no wrong, a brand that was conquering sectors that no other retailers, let alone a supermarket could touch. This wasn’t luck – the Tesco management was razor sharp – as indeed were the agency – The Red Brick Road – set up by a bunch of chaps from Lowes including Sir Frank Lowe – who were probably some of the best in the business. Needless to say they are now having to re-pitch….
Seth Godin has been described by many as one of the ultimate entrepreneurs for our Age.
