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From Dr. Scott Sampson's Understanding Services Businesses Book (click for table of contents)
SBP 9a: The Marketing of Properties⇐Prior —[in Unit 9: Marketing in Services]— Next⇒SBP 9c: Price Guessing

SBP 9b: The Who's Who of Marketing

With services, the most influential marketing employees are production employees. The focus of marketing departments is to attract new customers, but production employees often have the primary responsibility of retaining current customers.

Why it occurs

This principle occurs because the major selling points of services are usually experience properties (see SBP: The Marketing of Properties) and experience properties are portrayed to customers by service production employees.


This Service Business Principle can be the source of significant “turf battles” in companies and in academics, but it need not be so. These turf battles originate from the traditional contentious relationship between marketing and production departments seen in many manufacturing organizations. In manufacturing organizations these two departments are distinct, and often assume conflicting objectives. Marketing is viewed as a profit center, implying that the goal is to boost profits. Profits are boosted by filling demand for products in the way that will be appealing to the customer–in the volumes and at the time the customer wants. As a result, marketing tends to promise delivery that the production department may or may not be able to fulfill. Production, on the other hand, is generally viewed as a cost center, implying that their objective is to produce what is needed (at acceptable quality levels) at the minimum cost. Minimum cost requires well-planned and executed production scheduling, which is at odds with the marketing department's efforts to make what the customer needs exactly when the customer wants it. If marketing gets its way, production costs will go up. If the production department gets its way, the ability to respond to every customer request will suffer. This is the perpetual conflict in such manufacturing companies.

Some service companies insist on a similar conflicting relationship between marketing and production functions, but it should not be so. Usually, customers get their most significant service product information from the production process–and thus are targeted by marketers based on their experience with the service provider. Marketing department employees generally have the charge of getting the customers “in the door” the first time. But, once a customer is in the door, it is the production employees who are most likely to influence the customer to give repeat business or not. As a result, production should also be viewed as a profit center, not merely a cost center. This is especially justified given that it is generally much more expensive to gain new customers than to retain current customers, and the profitability of individual customers tends to increase the longer they have been customers.1) Further, production employees should be trained in their marketing and customer retention responsibilities. The interaction employees have with customers is often a “losing-sensitive characteristic” (see SBP: Unlocking Key Elements), meaning that poor interactions can lead to disgruntled customers who will never return. Richard Norman called these key interactions “moments of truth,” implying the instance when the true quality of the service is revealed.2) Nevertheless, not all service processes contain the same marketing opportunities. “Front office” service production employees have much greater marketing opportunities than “back office” employees (see Appendix B and Fitzsimmons2 chapter 5 pages 87-89 on Service Blueprinting). Also, some types of service delivery lend themselves to more marketing opportunities (often at the expense of efficiency). (See Fitzsimmons2 chapter 5 pages 100-101 on Sales Opportunity and Service Delivery Options, noting Figure 5.3.)

How it effects decisions

Companies need to decide how to manage the relationship between marketing departments and production employees, and how to assure that the marketing responsibilities of production employees are being met.

What to do about it

Employee training is an important activity in service organizations, particularly for customer-contact employees. Employees need to be trained in standard operating procedures, as well as exceptions. (see Fitzsimmons2 chapter 9 pages 244-246 on Training.)

For example

Disney is a company that trains every theme park production employee to be a marketing employee. In fact, the company recognizes that even the trash collection employees play a key roll in portraying the Disney image. This is because these employees roam the park throughout the day collecting trash, making them common targets of customer questions. A customer who simply wants to know the location of the nearest restroom or to know the park hours will likely judge the entire park based on the quality of interaction with the employee questioned.

My airline example

Telephone reservation employees are key players in the ability to attract repeat business from airline customers. If the employees are helpful and courteous, the customer is much more likely to call the airline again. However, if the employees are terse, that may be sufficient reason to call the competing airline first in the future. Therefore, the selection and training of reservation agents needs to cover more than just the standard operating procedures–it needs to emphasize the important marketing role accomplished by the various interactions with customers. (Some, in fact, may consider reservation agents to fall under the company's marketing function, which is debatable since it can also be viewed as gathering inputs for the air-travel production process.)

The marketing efforts of air travel production employees is particularly key when problems occur in a procedure. For example, when a flight is delayed, it is the airline personnel who can make all the difference in the reaction of customers–effective employees will be skilled in the “damage control” of recovering customer good will. Ineffective employees will simply give the customers more justification of their negative attitude towards the airline.

Even employees who do not have direct interaction with customers can influence the probability of customer repurchase. Few things will anger an airline passenger more than seeing his luggage come up the ramp at the destination airport with a tear in the side and the contents hanging out. It may be impossible to avoid ever damaging luggage, but when damage does occur, baggage handling employees can have great marketing ability by conscientiously handling the situation. For example, it can actually have a positive affect on the customer if the company, not the customer, first identifies the damage and initiates the solution.

How manufacturing differs

With manufacturing, the production employees usually have no interaction with customers, except for through the finished product. When a product is finished, it is left to the non-production marketing employees to portray product information to customers.

Analysis questions

  1. What marketing roles do or can production employees play?
  2. Are production employees aware of that role?
  3. How might that role be developed?

Application exercise

In the last Service Business Principle, The Marketing of Properties, we discussed ways of attracting new customers to service businesses. For this exercise, consider the methods for involving production employees in customer retention efforts. Redraw your service process flowchart, identifying the process location of a couple of “moments of truth” or other points where customers can make positive impressions on customers. In what ways can service employees at those points increase the likelihood of customer repurchase? Are there opportunities in the production process for employees to invite customers to purchase additional services? Where and how?

1) “Zero Defections: Quality Comes to Services” by Fredrick F. Reichheld and W. Earl Sasser Jr., Harvard Business Review September/October 1990.
2) Norman, Richard, Service Management, John Wiley & Sons: New York, 1984, p. 89. (Cited on Fitzsimmons2 chapter 9 page 239.) One text claims that the term “moment of truth” was coined by Jan Carlzon, former president of Scandinavian Airlines. (see Chase, Richard B., and Aquilano, Nicholas J., Production and Operations Management: Manufacturing and Services, Seventh Edition, 1995, Irwin: Chicago, page 104 footnote.

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