Knowing services aspect key to marketing direction

August 15, 2005

Understanding the fundamentals of services marketing is extremely useful for the optimal marketing of a medical practice. Basic knowledge in this area is also helpful when studying the marketing approach of your competitors. Additionally, you may consider these concepts when analyzing ads for which you are the targeted customer.

"Sow good services; sweet remembrances will grow them."

-Madame de Stael, 1766-1817,French author

Patient part of service

In the case of services, people are part of the service product. Indeed the customer (meaning the patient in a medical practice) directly participates in creation of the service. This is sometimes known as the "inseparability of production and consumption."

Closely related to this is the nonstandardization of services. Variability is inherent in services. Compared with goods, quality control efforts are much harder to employ for services. Since final "assembly" of the service occurs in real time, it is difficult or impossible to hide mistakes.

Next, consider the ways consumers evaluate products. Search qualities are defined as those aspects of a product that can be determined prior to purchase. Experience qualities are those that can be judged only after consumption. A third set of qualities, known as credence qualities, are those that are difficult to evaluate even after consumption. Whereas goods tend to carry high search qualities, medical and other professional services are high in credence qualities. It may be impossible, for example, for a patient to grade the quality of an eye exam, even after experiencing one.

All of this contributes to the conclusion that services are in general more complex products to assess than are goods. Customers often require guidance when making choices between competing services.

These realities are directly relevant to service marketers. Service customers tend to rely more on word-of-mouth referrals than on other methods when choosing a service provider. This is due, in part, to the nonstandardization issue. Since patients recognize that each instance of the service delivery is unique, a provider cannot be chosen by comparison of "standard models." Consequently, practices should put forth significant effort in order to encourage word-of-mouth referrals.

An example of such an effort would be the routine use of thank-you letters for patients that refer other patients. This would tend to encourage future word-of-mouth referrals. Programs that facilitate entry of relatives of existing patients into your practice are also likely to be fruitful. Such strategies will probably also result in improved retention of existing patients.

The risk of purchasing a service is higher than the risk of purchasing goods. This is because of numerous features already described, including intangibility and nonstandardization. Additionally, the lack of search qualities adds to prepurchase risk. Programs that reduce risk are helpful and may include the use of prominent displays of your technician's qualifications (in addition to the customary physician diploma display). This reduces risk by conveying the image of standardization.

Guarantees are a very effective way to decrease the perception of risk. Clinical outcomes cannot be easily guaranteed (although guarantees have been utilized by some refractive surgeons). However, it is possible to guarantee short wait times and other important features of the service encounter.