There are several characteristics which differentiate a service from a product. These are Perishability, Heterogeneity, Intangibility and ownership. Here we discuss further 7 characteristics which are critical and help you understand a service product better.
1) Services are sold exclusively on the basis of benefits they offer – Why is it that Accenture has such a high brand equity? This is because of one single thing which they have commanded over time – Trust. Thus this is one benefit to the service of Accenture which other companies can hardly give. Therefore, word of mouth publicity and a good reputation are some benefits which are critical to make a service brand over time. The first restaurant you try, is one recommended by your friend.
2) Services cannot be made available in advance – If you were running a restaurant, can you make all the dishes one day in advance and then serve the customer when he comes? No you cant. All you can do is make the ingredients. Even fast food restaurants take care that the food is replenished every single day. The simple reason behind this is that services cannot be stored. They cannot be given in advance. They can be given only when a purchase of the services has been made.
3) Time utility is critical – If you were a doctor, and you gave half an hour to each patient, talking idle talks just to make him comfortable, you will probably lose the 10 customers sitting in your lobby. In services, you charge by the amount of time a person consumes. Thus the way you utilise your time is critical to the profitability of your business. A restaurant which does not have any customers today, will have lost a lot of money in keeping the restaurant open, in labour charges etc.
4) Services cannot be transferred – Outsourcing is the best example of non transference of services. If you wanted to outsource your calls, can you bring the call centre to your country? You cant. Because again the costing will go high. That is why call centres are in cheaper countries. You cannot separate the process from the source. You will have to keep the call centre services in one place and provide these services in another.
5) Services perish – The point is similar to perishability of services marketing. The concept is simple – if you do not watch the movie now, you wont get a refund of the ticket. If you do not board your plane or your train, you cannot ask back for the charges of the ticket. A service once order, perishes, if it is left unused.
6) A service once consumed cannot be returned – You pay a doctor for consultation and medicines. But your illness does not get cured or he is unable to find the source. Can you ask your money back? You cannot. He gave you the service which you asked for. He might not ask for money anymore or you can return the medicines and receive the money for the medicines. Medicines are not a service. They are a product. The bottomline – you cannot return a service once it has been consumed. In restaurants, you can return the dish if you dont like it, and ask for another same one. But you cannot walk out of the restaurant without paying for the services.
7) Controlling the quality of services is difficult – My local auto service centre has one rule for loyal customers – Do not give your bikes on weekends. The reason is quite simple. He has a heavy workload on weekends as a result of which the quality of service is low. This is human factor and the owner can hardly do anything. Even in a restaurant, the quality of food served or the service given will vary during peak hours. Furthermore, as services are intangible, it is not possible to measure the quality of service given. Thus controlling the quality of services over time is very difficult as long as the human element is involved.
Overall these seven characteristics define a service. A hint here for a marketer / entrepreneur. Go through each of these characteristics and find out where you can bring about an improvement in your organization. I am sure even if you are meeting your customers satisfaction goals, there is scope for exceeding customer expectations by analysing these seven characteristics of services.
Get Daily Marketing Updates in your Inbox