Book Review: Services Marketing, Integrating Customer Focus Across the Firm

The heart of the book is to develop strong customer relationships through quality service by integrating customer focus across the firm.  Services marketing is different from goods marketing in significant ways and it requires strategies and tactics that traditional marketing do not  fully reflect.

There are many techniques and methods discussed  in the book by the authors, but we are concentrating this review on Relationship Marketing and Service Blueprint. These form the bedrock of any service marketing, because for services to be well marketed, good relationship with customers is of high importance  which requires strategies that will make it happen alongside with the blueprint of the services that will enable customers to have a clearer picture of  the firm’s offerings. The authors described the two highlights extensively and are reviewed below.

Relationship Marketing

Marketing today has gone beyond transactions. More focus are now on building relationships with customers, maintaining this relationship with long term commitment to it, improves the quality of service delivered and as well increases the level of innovativeness generated thereby, making customers part of business development.

Relationship marketing has changed the traditional marketing from just an act of acquiring and transacting business with customer but also leveled it up with keeping and improving relationship with the customers. This has changed the focus of firms in looking for new customers every time to building healthy relationships with old ones who will in turn bring new customers and infuse new ideas and innovation that will help increase the value of services rendered.

It has been observed that most firms open the front door for in flow of customers but do not always remember to close the back door for the outflow of the same. Closing the back door is an important part of marketing known as relationship marketing that has substituted the traditional method. The goal of relationship marketing is to build and retain the committed customers who are valuable to the firm having undergone different customer relationship transitions levels (Strangers – Partners)

Metaphor of customer relationship

Studies have revealed that there are different stages of customer relationship. These stages evolve from strangers to acquaintances to friends and finally to partners. These different stages are considered in details below.

Customers as strangers

This group is comprised of those who have not had connection with the company at any point in time either by service purchase or service awareness. This group is probably customers of the other companies rendering similar service. It is very important for firm to develop awareness strategies that will communicate the service to them in a way that they can easily buy into it. At this stage, firms will look for methods to bait them to know various offerings they have and as well the possibility of getting them into the service.

Customers as acquaintances

 The moment customers are brought into the firm’s services, connection pole has been erected. Customers and the firms ignite acquaintances that established good platform for relationship transaction. At this stage, this is necessary for firms to create strategies that will give this acquaintance customer continuous satisfaction. Firms are more focused on giving value proposition to their customers relatively to the ones offered by their competitors. When this relationship and experience lingers for a long period, customers get more acquainted with the various offerings in the firm and trust is established.

Customers as friends

Getting to know and understand the need of a customer becomes easier as the customer engages in continuous purchases and as well getting additional value to purchases in terms of good relationship. This will help firms to create or develop services that will meet the customers’ need directly. Hence, relationship changes from acquaintances to friendship as firms engage in creation of special services with differential value that meet customers’ needs. The main objective of firm at friendship stage of relationship is how to keep the customer (Customer retention). At this stage, higher trust is established and more competitive advantage over competitors.

Customers as partners

The trust level of customer increases as the customers engage in continuous business with the firm. This allows the firm to provide more satisfaction for customers through customized service of product offering and transactions. This transforms the trust level acquired in the friendship stage relationship into commitment. This deeper trust and commitment customer-firm relationship develop into partnership. This type of relationship leave customer with no option of finding a better alternative to solve customer’s need.

The main success factor at this stage of partnership relationship is the ability to harness the individual customer’s information more effectively over competitors. Commitment level of the customers to this end, relationship deepens as firm continues to use the knowledge of customer’s need to create personalized and customized services and this means that customers continue to perceive the sensitivity of the firm to their need and meeting them.

This type of relationship advances into making both parties inter-dependent and at this point, it grows into customers getting price premium by paying some amount of membership fee for a long period of time and as such continue to get first hand service or preferential offerings from the firm.

Benefits for Customers and Firms

In the customer-firm relationship, the benefits are symbolical in nature. This means it is not only the organization that will benefit from retaining a committed customer. The customer also have a long term benefit derived from the association.

Benefits for Customers

1)  Confidence benefits: This is described as total trust the customers have developed in the service provider. It minimizes the tension level in customers that could result from uncertainty in the quality service or satisfaction in terms of other values attributed with the service. This helps customers to reduce coast and invest that time on other matter of concern.

2)   Social benefits: It is very easy for someone to do business with service provider one is used to. This is as a result of the level of personal intimacy the service provider has developed with the customer. It is very important for service provider to knit together in emotion with the customer giving them social support as additional value. It makes customers to have a sense of belonging with the firm that the service provider not only has interest in their money but also in their well being. When this benefit is constant, there is likelihood for customers not to change service provider even if competitors are offering same with better quality or at reduced price.

3)   Special treatment benefit: This is some level of preferential treatment that loyal and committed customers get from their service provider as incentives for their loyalty to the firm. This could be in form of first hand information or service, special package, moderate price and flexibility in service terms.

Benefits for Firms

1) Economic benefits: It has been observed through various studies that the overall return on investment of traditional transaction oriented firms are far less than that of the relationship oriented firms. These benefits are deeply rooted in the;

a  Increase in revenue generated over time. The more loyal a customer is to a firm, the tendencies are that the customer will increase purchases over time. With the level of trust and commitment they have built on a firm over time, the longer for the services or firm offering will increase which will in turn increase revenue generated by the firm.

b   Lower cost of marketing: studies have also revealed that repeated purchases by loyal customers requires about 90% less marketing expenditure. Attracting new customers require many start-up cost such as advertisement and promotion cost, operation cost and time cost. All of these at initial level have huge impact on the economic status of the firm but as time goes on, there is sharp reduction of cost which in the long run gives the firm much economic benefit.

  Highly satisfied customers are willing to pay more for the services rendered to them.

2) Customer behavior benefits: The impact of customer behavior goes beyond the physical value that could be accounted for. This includes;

a   Word of mouth marketing: Any satisfied loyal customers do more of this type of advertisement to their friends, families or total strangers especially when the product looks so complex to them at first. The loyal customers give others endorsement about the firm’s product and even convince others to see benefits attached to using the product. This reduces firm’s marketing cost and as a matter of fact, makes more impact than the paid advert.

b   Customer voluntary performance: This is a voluntary act of service that comes from the loyal customers to the firm so that other customers do not see the firm’s shortcomings. It could be a little information supplied to the firm to erase failure or mistake or a total act of service.

3) Human resource management benefit:

a   Satisfied and committed customer assist in service delivery through their experiences over time on the service they could also contribute to improving the service and co-create new service with the firm.

b  They also foster employee retention when customers are well satisfied, employees are also happy and stable. People tend to continue working more for organization whose customers are happy and loyal because there is not going to be much complain which could affect them emotionally-

Service Blueprint

Service Blueprint is a technique used for service innovation. The technique was first described by Lynn Shostack, a bank executive, in the Harvard Business Review in 1984. The blueprint shows processes within the company, divided into different components which are separated by lines. It is an operational tool that describes the nature and the characteristics of the service interaction in enough detail to verify, implement and maintain it.

Blueprints are flexible and powerful in that they depict a service at multiple levels of analysis – they can facilitate the refinement of a single step as well as the creation of an entire service process. It is a way of ‘seeing’ the service from the customer focus; the key part of the compliance outcome. In creating the current and future state blueprints it allows the Team to articulate and act upon customer insights, and focus on what’s working, what’s not working and what needs to be changed.

Example-Self-Service-Technology-Blueprints

In conclusion, Services Marketing book wirtten by Valarie A. Zeithaml, Mary Jo Bitner and Dwayne D. Gremler is very useful and educational for everyone who is interested or involved in the services industry. It gives good and understandable guide and solutions to service problem with lots of real life cases that could help individual and firms learn and improve their service delivery in a way that will satisfy,increase and maintain customers as well as growing the business.

Blog post by SID students Isikaiye Deborah and Pingshan Hu-Pentikäinen

This book review was written as an assignment for the course New service development and innovative service systems.

References: 

Zeithaml, V.A., Bitner, M.J. & Gremler, D.D. (2009), Services Marketing, Integrating Customer Focus
Across the Firm, Chapters 7 & 9.

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