The service industry is the largest and fastest-growing area of business in Germany. In 2019, the service sector generated more than two-thirds of the total economic added value. Service marketing, however, must be communicated differently than product marketing. After all, customers of services take their (future) decisions based on different criteria than for products.
Which aspects these are, which basic differences need to be considered, and which factors lead to success are revealed to us by professor Dr Michael Bernecker in this Visable interview. He is the managing director of the Deutschen Instituts für Marketing (German Institute of Marketing) and head of the Online Marketing (B.A.) programme at SRH Fernhochschule in Riedlingen.
Mr Bernecker, what are the basic differences between product marketing and service marketing?
The main difference: when it comes to service marketing, the customer is integrated into the marketing process much more intensively from the start. The product doesn’t play a role; the service affects either the customer themselves or one of their offices. Good service marketing therefore focuses on the customer to a much higher degree; terms such as personas or customer journey are much more relevant then in traditional product marketing.
Does this go for all services in the industry?
Roughly speaking, yes. Generally, there are two groups of services: trust-based services and experience-based services. In the B2B segment, the first would be, for instance, company insurance. This cannot be tested in advance. Therefore, companies have to place their trust in the fact that the insurance will cover damages in the face of a claim. An example of an experience-based service is IT services.
What are the special challenges for companies which want to market such trust or experience-based services?
Within the service sector, you cannot show a product, and a service is very difficult to illustrate. So, it’s necessary to fall back on criteria that can help. An example for B2B: a solicitor, who would like to make his knowledge available to companies, advertises using the building where his firm is situated. A modern villa is more impressive than a normal office and gives potential clients the impression that this solicitor performs his job well.
Are there any other special characteristics of service marketing for the B2B segment?
An important trend over the past few years has been communicating work using seals and certificates. Marketing with these kind of aids is particularly valued in Germany. Here, it is nearly impossible to sell a service that does not have good reviews from or is certified by some kind of organisation, trade magazine or similar.
What’s more, decision-makers in the B2B business are informing themselves about the service on offer before the purchasing decision much more extensively today than was the case ten years ago. Particularly online. In the past, it was standard practice to gain information more or less from the consultancy talk with the sales person in the initial sales phase – and not more than that. Customers’ need for information is much higher today.
What’s more, decision-makers in the B2B business are informing themselves about the service on offer before the purchasing decision much more extensively today than was the case ten years ago.
What does this mean for the advertiser in the B2B service sector?
He has to make his services much more transparent. This includes communicating more and, above all faster, via the various channels. To grab attention among the ever-tougher service competitors, this communication should also be more emotional than is the case in most areas today. The simple focus on datasheets, explanatory videos and specialist text is not enough anymore in B2B, as customers are used to different communication from the B2C business.
Marketers should also keep in mind that the sales force does not come into contact with the customer until later in the customer journey. Broad content like digitally available white papers helps the customer to gain detailed information in advance. This means that traditional media is continually losing importance for marketing measures.
The local search for services is becoming more and more important. How can service providers create a top-of-mind “near me” brand experience for potential customers?
Whether localisation is meaningful for the B2B segment or not is a topic that is highly discussed. I think it depends on the target group. If its business is focused on the region as well, then it places greater store in regional service providers too. But as soon as we get to structures which are no longer bound regionally, the trend goes in the other direction – for instance to country-wide or even global platforms.
But to go back to the question: customers with a regional mindset can be reached above all via Google My Business. This channel has developed intensively and offers a host of useful functions. On top of this, social media marketing plays a leading role. Facebook and similar are visited mainly via mobile end devices and these can be localised well. In this respect, each entrepreneur should present their company on these channels for the B2B segment as well.
Dr. Michael Bernecker managing director of the Deutschen Instituts für Marketing
How will B2B service marketing develop in the coming years?
Personalisation and individualisation will continue and adapt to the consumer area. There are already specific B2B online shops where customers can log in and then access their individualised price list and other data exclusively for them. This will be the rule in future rather than the exception.