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

SBP 9d: Give Them Something New

With services, perceived value and marketing opportunities can sometimes be enhanced by giving customers something tangible that they did not already own.

Why it occurs

This principle occurs because the tangible outputs which are given to customers are often nothing more than the modified inputs the customers had in the first place!


Some authors have called this “Making the Intangible Tangible,” (e.g. Fitzsimmons2 chapter 3 page 54) although I disagree with the general idea that services are intangible. (see SBP: Intangibility Myth) Granted, some services are indeed intangible, such as… well… lets see… telephone service. No, the phone is tangible and the signal vibrates my ear drum in a tangible way. Auto repair. No, the car is tangible as are the tools used to work on the car. Psychiatry. No, there is the funny shaped couch and the pages of ink blots. I am sure there are examples of truly intangible services, but I am having a hard time thinking of them right now.

The reason many services appear to be intangible is that the customer is not allowed to keep tangible portions of the service other than those which the customer provided. The telephone customer probably owns the telephone and the eardrum. The auto repair customer owns the car, but is not allowed to keep the tools used to work on it. The psychiatric patient is allowed to keep their brain, but not the funny-shaped couch. The customer may come away from services happy that a need was met, but with nothing tangible that they did not already own.

So, why should service companies give customers something tangible they do not already own? The answer is in perceived value. In the words of Dorthy Riddle, “…one of the key marketing challenges for services is to provide a tangible representation of the service in order to ensure the customer's sense of having made a worthwhile purchase.”1)

The gist of this Service Business Principle is that customers' perceptions of value received can be enhanced by giving them something tangible that they did not already own. For example, the telephone company could provide a mini-directory which summarizes frequently called telephone numbers (delivery restaurants, movie theaters, etc.); the auto repair company could give the customer a free tire gauge with an alignment or tire service; the psychiatrist could give the patient a booklet of helpful suggestions for dealing with stress, or a poster of positive sayings. In each case, it is particularly good that the thing given to the customer relate to the service, helping the customer realize the value given.

The marketing potential of such tangible service “takeaways” can be significant. The telephone mini-directory might include a list of other company services, such as call waiting. The tire gauge could be inscribed with the name and phone number of the auto shop (with instructions for tire gauge use, lest customers think they have faulty tires). The psychologist's “gifts” could have a sticker “From Dr. so-and-so.” These can remind the customer about the service provider at times of future service needs.

For example

Have you ever been to a half-day or one-day seminar that you or your employer paid substantial money for. Seminars are often dominated by credence properties, implying that even when you are done with the seminar you may not be able to evaluate if it was worth the money. (recall SBP: The Marketing of Properties) A way some seminar companies increase the perception of value added is to give the participants a workbook based on the materials of the seminar. The workbook is a tangible evidence and reminder of the service.

Likewise, consider the service of this Services Management course. There are many tangible elements, but I am afraid you cannot take the chairs or the chalkboard or the building with you when the semester is finished. You may even sell your text back–which I would not recommend–but you will certainly not sell this workbook back. (They would not take it anyway, since it is designed to be a “consumable.”) This workbook will serve to remind you about all of the important concepts covered in the course. In some sense, the workbook extends the value of this course by making the principles more accessible years after the course is completed.

Some restaurants give away non-laminated versions of their menus to customers. The menus may facilitate a delivery service, or simply remind the customer about favorite dishes offered by the restaurant.

One store where I shop gives away refrigerator magnet shopping list note pads. The note pad is inscribed with the store name and “Don't forget to bring your film!” (They must have good profit margins on their one-hour photo processing.)

A company that cleaned our carpets sold us a small container of carpet stain remover. However, they would have been much wiser to give it away to every customer. Why? For one thing it will remind customers how clean their carpets were after the service. Also the container is inscribed with the name of the company–and what better time to remind customers about the name of the company than when they are thinking about carpet stains! For simple or small stains, the customer would probably not hire the carpet cleaning company anyway. But, when the stain is more major or the clean-carpet look is gone, the customer is reminded who to hire to fix things.

My bank gives away calendars every year. I also got a calendar from the shoe repair shop I patronize. Calendars are not specifically a banking or a shoe repair thing. Yet they can serve to remind me of the service providers (if I can remember where I put them).

My airline example

There is very little of value which the airline lets the customer keep that was not previously provided by the customer. The airline primarily modifies the location of passengers and their luggage. One thing that may serve as a tangible reminder of the service is the in-flight magazine. Often, such magazines are marked as “complimentary copies,” although it is unlikely that a large percentage of customers take them. I would advise airlines to take greater effort to get customers to take a copy, such as pointing it out just prior to landing. If the articles and photography are of high quality, then many customers will read them or place them where others might read them. The magazine can remind people about the fun of traveling, and might even describe locations worth considering for a trip.

How manufacturing differs

With manufacturing, customers receive tangible outputs which they never had before.

Analysis questions

  1. What are the tangible elements of the service? Which do the customers take with them after the service is complete? Of those, which are simply modifications of what the customer already owned? Which are not?
  2. What could the customer be given as a tangible token of the service received?
  3. How can these tangible tokens be prepared to enhance the chances of gaining future business?

Application exercise

Describe a tangible “takeaway” that can be given to the customer as part of service delivery. If possible, draw an example of the takeaway. Estimate the unit cost of such an item. How would the item serve to enhance the perceived value of the service? How would it serve as a reminder to the customer in instances of future service need?

1) Riddle, D. (1985). Service-Lead Growth, Praeger Publishing, New York, p. 10.

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