Paradigms in Services Marketing

4 New Service Marketing Paradigms

  1. From Making Contacts to Building Assets

In the old paradigm media buying was, to a large extent, about managing reach and frequency.  Some people are easier to catch than others, so marketers needed to take care to not to contact some too much and others too little. It wasn’t easy, especially for TV, but we knew how to do it and do it well.

Then media fragmented, making for smaller audiences and higher premiums for anything that could be considered “mass.”  When digital media came on the scene, the banner ad became digital analogue to the 30-second TV spot. Then ad networks, DMP’s and trading desks sprung up and increased efficiency, but devalued eyeballs further.

Amidst the numbers games, everybody knew something was wrong and that led to the concept of brand engagement.  More metrics, such as video completions, were dredged up, but those too have been found limited in utility.  What’s emerging is the concept of value exchange in the form of owned media assets.

Content marketing and mobile apps are not merely new methods of eyeball capture, but new possibilities to build assets in the marketplace and increase consumer engagement. Nike+iPod is just an early shot across the bow.  The new digital battlefield will create immersive experiences in the living room and at the point of sale.

  1. From Campaigns to Platforms

Creating marketing assets in the marketplace has had an important ancillary effect.  It’s nullifying the old campaign mindset.  Where marketers used to put up a series of ads until the effectiveness decayed, they now need to build platforms that develop and mature.

30 second ads and pre-roll videos are having to share budgets with web sites, YouTube channels, e-commerce integration and social media followings that don’t immediately disappear when the current promotion is over.

Ads themselves are also becoming platforms, which adapt to consumers interactions.  No longer are we showing the same ad or web page to every consumer, but are tailoring the message to past behavior.  We’re broadcasting less and personalizing more.

That creates the need for an new way of working.  Brands need to become authors whose stories unfold over time.  The old campaign mentality needs to be replaced by the principle of perpetual beta, where the brand is always becoming, never being.

  1. From Awareness to Activation

In the old media paradigm, ads were used to promote awareness.  The idea was to keep the brand top of mind and therefore increase the likelihood of a purchase.  Consumers are creatures of habit and so are loathe to commit to unknowns, but willing to dabble in the familiar but untried.

All that is still true, but falls short.  Simple awareness is a no match for the engagement and advocacy that owned and earned media confer.  A brand that relays only on broadcasting marketing messages will find that they end up promoting the category while their competitors pick off potential consumers with retargeting efforts.

Yet still, owned and earned media are worthless unless activated.  Numbers still matter. Regardless of how clever the execution might be, any promotion that doesn’t reach consumers in amount significant enough to have a business impact is worthless.

Therefore, paid media’s role has significantly changed.  Whereas before it was used as a bludgeon to beat down competitors with greater share of voice, its role has shifted to activating engagement with owned assets.  Ads have become a starting point – a door to engagement if you will.  A means to an end rather than an end unto itself.

  1. From Transactions to Experiences

Probably the biggest paradigm shift has been the way brands interact with consumers. Previously, the expectation was of a one-time value exchange.  Brands advertised a product to have certain features and attributes.  Consumers expected them to deliver it and, if they did, they were likely to score high on customer satisfaction studies.

Today, consumers expect brands to be partners by helping them get the maximum utility and enjoyment out of their purchase.  L’Oreal Paris, for example, created the Destination Beauty channel on YouTube to give consumers advice on how to use their products.

Nowhere is the trend as prevalent as in retail.  The prime example is the Apple Store, which has elevated the concept to an art form.  However, old economy retail brands from Macy’s to Nieman Marcus are adapting fast.  In a world where media is “always on,” people expect their brands to be as well.

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