From scoring the lowest high school GPA (grade point average) at Stanford University to writing best-sellers, the career of services marketing guru Harry Beckwith is as chequered as his life. When Beckwith is not advising 23 Fortune 200 companies, including Target Corp., ABC Inc. and Wells Fargo & Co., or watching movies, he is “busy producing babies—Brooks, Harry, Will, Tim, Cole and Cooper—and sending painfully large tuition cheques to their colleges”. Beckwith started off as a clerk with a federal judge after graduating with Phi Beta Kappa from Stanford University. After six years of practice, Beckwith moved to advertising since he was “ready to start lying to larger audiences”.
Four years later, he rose to become creative supervisor of Carmichael-Lynch, which was picked four times by the New York-based magazine Advertising Age as America’s most creative mid-sized agency.
He has authored the best-seller, Selling the Invisible, which remained on the BusinessWeek best-seller list for 36 months and was named one of the Top 10 business and management books of all time. Two other books of his, The Invisible Touch and What Clients Love, have sold over 700,000 copies in 23 languages.
Beckwith’s latest book, released in March 2007, You, Inc: The Art of Selling Yourself, has already been named this year’s Booksense Notable Book by Booksense, a marketing campaign on behalf of the independent bookstores of America. In his spare time, Beckwith teaches at school and tries his hand at golf as a member of the Athletic Board of Stanford University.
Recently, the services marketing guru visited India. In an interview with Mint, Beckwith spoke about several issues, including the increasing importance of brand image, services marketing and innovation in a globalized world.
Consistency in services marketing poses a big challenge since it hinges largely on people for delivery. What role does human resources play in services marketing?
Human resources plays a key role, because once a company is committed to its goal, broader purpose and core values, HR must ensure that it hires people who share all of those and reflect the values of the enterprise.
HR needs to hire people who are consistent with how the firm wants to position itself in the market.
If it seeks what we’ve identified as the serviceleader position, the focus is on people skills more than technical ones. “Hire for people skills, train the technical ones” becomes a useful operating mantra. If, instead, you are going to focus on innovation, your focus will be on a different set of skills—and typically, a far weaker relationship orientation.
How important is image-building in services marketing?
In this world, a company is what it is perceived to be. What it really is certainly influences that, but the image and the reality rarely coincide perfectly, and you need to manage both well to prosper.
Yahoo, for example, was not a splendid search engine ever, but it created and conveyed the image of a very fun consumer service, and it prospered while technically superior search engines failed—most notably, Northern Light, the best search engine extant for many years.
And, a strong image actually improves customer satisfaction. People tend to experience what they expect to experience—a phenomenon so clear that psychologists have named it: Expectancy Theory.
You see this most notably in tests of hair restoration products. If a person thinks the product will help hair grow, they actually see hair—even when they are given the controlled substance. In these tests, 40% of the people in the control group say they grew hair. Only 60% who used the actual product reported more hair.
We also observed this in taste tests for Pepsi and Coca-Cola. If a person doesn’t know which is which, they prefer Pepsi. But, when they know about the brand, they overwhelmingly choose Coca-Cola instead.
The image matters: We are far more susceptible to influences such as these than most people realize.
How can traditional businesses in India add value to their products by using the services approach? Please give us an example.
One way to add apparent value is to price your products consistently with their quality, and not with what the market will bear. Be willing to charge a little more; this conveys you offer that added value. You can also add value simply by communicating the distinctions and qualities of your product better—tell the background story.
In our country, a Gibson guitar has added value not because of the instrument itself but because of its story: It’s been the choice of so many legendary guitarists, including the one for whom its most famous guitar—the Les Paul Custom—is named. You are not just buying a Gibson, but a part of music legends, too.
There is an emotional appeal there that goes far beyond the wood and the construction and the tone—the thing itself.
Selling a service is the first step. How do you build and expand a service that is intangible?
People do not buy things; they buy feelings, experiences, connections. A company’s story creates all of these. And design is an obvious value-added element.
Dell Computers didn’t see it, but Apple has, and Apple is growing dramatically in our country (the US). Even their PC sales have tripled. Few companies anywhere pay more attention to design, and more companies should.
You develop and grow a service with all the elements I have suggested above—communicative pricing, brand building and design. But, the ultimate key is the relationships you develop, with prospects, clients, employees, vendors and stakeholders—and the media who, by the way, can be enormously helpful, as Richard Branson and Virgin have proved, and as your own Kingfisher phenomenon reinforces.
The first point of contact with customers (read, the welcome) and the last one—thank you—and the next day follow- up are especially important.
In fact, these things have become far more important than we once thought. And, the key to this element is people—warm, gracious, caring people. Fortunately for you, my experience is that your country is filled with these people, so India should keep rising.
Is services marketing more important for certain categories/sectors? Which are these and why?
I can only say that it is more important at certain stages in sectors. It is less important in a very new industry, where competition is scarce and the offering is new, and the key challenge is to just ship or get launched. But once the category matures, products and services tend to appear more commoditized and, as competition grows, marketing and innovation become indispensable. You will see that as competition for offshoring and outsourcing intensifies. You already are (seeing it).