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When Marketing a Service, Pull Back the Curtain

May 07, 2012 | By Pat McAnally

In a service-based business, asset ownership does not change hands; the customer is essentially paying a rental fee for access to software, systems, infrastructure facilities/management, networks, personnel and professional expertise. Describing this intersection of people, processes and technology is much more complex than describing product features.

A topic that often comes up during inquiries is the difference between marketing a service and a product. As more software companies switch from on-premise software to software-as-a-service (SaaS) delivery models, marketers are contending with the challenges of marketing an intangible. As their brethren in IT services and consulting companies can attest, a service needs a very strong articulation of its value proposition, since customers must form a clear perception and assign value to what goes on within a vendor’s walls or “behind the curtain.”

In a service-based business, asset ownership does not change hands; the customer is essentially paying a rental fee for access to software, systems, infrastructure facilities/management, networks, personnel and professional expertise. Describing this intersection of people, processes and technology is much more complex than describing product features.

SaaS marketers require a dual perspective: In addition to software features and functions, they need to describe the operation of the provisioning service. This means working with the data center team and customer support as well as product management. What are the organization’s credentials and experience? What standards are followed? What specific methodologies are employed? How do you demonstrate the quality of your service in terms of consistency and response time? What are the deliverables or service-level agreements (SLAs) that become the equivalent of a guarantee?

For marketers, the process of understanding business issues and buying personas will be the same, but the questions buyers ask and when they occur in the buying cycle will be different. Buyers must have assurance that they’re not taking on undue exposure, so they will introduce new players to dig into the financial viability of the organization, its risk posture and approach to considerations such as security, privacy and compliance. This means providing new sales enablement materials and coaching to help sales address these causes of decisionmaking anxiety.

Delivering on both the promise of performance and a fruitful customer experience will drive new customer acquisition and retention, so it assumes even more importance for marketing. Case studies and testimonials carry considerable credibility in offering reassurance. Even when client names can’t be used due to confidentiality agreements, their words as satisfied clients still lend positive reinforcement to the perceived value of the service. Ongoing communication must sustain and build visibility over the life of the contract so that renewals are more easily accomplished. Marketing can’t leave this to the support organization. It’s important to regularly reach out to customers with relevant and helpful information, rather than just plying them with special offers at renewal time.

Whether it’s moving to a SaaS model or wrapping a set of consulting services around products to create a new solution, marketing needs to change its tactics and pull back the curtain to shine a spotlight on the organization’s ability to execute.

Pat McAnally

Pat McAnally is Research Director, Portfolio Marketing, at SiriusDecisions. She is a seasoned marketing executive with more than 20 years of experience in product and solutions marketing and management, sales enablement, thought leadership and analyst relations. Follow Pat on Twitter @patmcanally.

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