Everything should be service

Posted: December 3rd, 2009 | Author: Sami | Filed under: The Disruption of Marketing | Tags: goods, myths, services, The Disruption of Marketing | 3 Comments »

During the servicization-bound times we’re heading, the following presentation hits the right nerve. According to the thesis, marketers should look at all marketing as service marketing:

This reminds me about earlier work on service logic in marketing as written by Stephen Vargo and Robert Lusch, who break down borders between marketing goods and services (and on whose work the above presentation is also based). One of the their most compact sets are e.g. the four myths – a quick summary below:

1) THE INTANGIBILITY-MYTH:

Services lack the tactile quality of goods.

The Truth:

Services ofen have tangible results and products are bought for their intangible benefits. In the end people always buy services –be it produced with or without physical products.

Implication for marketers:

If tangibility doesn’t bring any significant benefits, it should be diminished or eliminated. An example of this is iTunes or Spotify: who needs physical records anymore (no, not even the DJ’s)?

2) THE HETEROGENEITY-MYTH:

Unlike goods, services can not be standardized.

The Truth:

Also physical goods are often heterogeneic and all the more as personalization and customization become more common. Many services are also already very standardized. In the end the customer always experiences even the standardized products in a unique way every time.

Implications for marketers:

Marketers should focus on personalization and customization, not standardization. As an example, there are over 20 elements on any Amazon page that vary according to who’s on the page. In other words, almost the only element that doesn’t change is the Amazon logo.

3) THE INSEPARABILITY-MYTH:

Unlike goods, products are produced and consumed simultaneously.

The Truth:

The customer is always involved in the value creation process.

Implications for marketers:

Marketing should maximize customer involvement in value creation and support and leverage on this.. An example is the Finnish Demi magazine, whose customers produce 95% of the content on the web site and also supervise on the content themselves.

4) THE PERISHABILITY-MYTH:

Unlike goods, services can’t be produced beforehand and inventoried.

The Truth:

Also goods perish and services often create very long-term benefits. Nowadays also intangible capabilities can be inventoried. In the end value is never created in the ware house but during consumption.

Implications for marketers:

Marketing should focus on minimizing inventories and maximizing service flows between the marketer and the customers, but also amongst customers and the marketers’ partners. An example is the iPhone, which comes in one version at a time, but whose value is largely based on countless and cheap software applications, which can be used to personalize any handset in infinite ways.

To think: how do the abovementioned myths and truths affect your business? How deep are you on the way to servicizing your business? What more could you do?

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