Services Marketing - MKT7537

Services marketing - MKT 7535 - Micheal Scultz

When we are interacting with people the messages you send are pretty important.

Brand: How people perceive your company.

Session 2 - May 24, 2012
Hustle as a strategy
http://hbr.org/1986/09/hustle-as-strategy/ar/1
Names change, businesses change but Hustle as strategy does not change.

Marketing has an amplification effect on the reality of the business.

Ritz-Carlton case
https://docs.google.com/file/d/0B5Lqw3O0SfHobXpYeTdaZWtTYzA/edit

Here are questions for the Ritz Carlton case analysis for Thursday:

• What is the essence of the Ritz Carlton experience? What is the Ritz Carlton selling?
• How does Hustle as Strategy relate to the Ritz case?
• In what ways does the Ritz service operations affect the Ritz brand?
• How do the Ritz people processes affect their brand?
• How do you relate the key concepts of Beyond Just “Selling the Invisible” to the Ritz?

Level of satisfaction - 92%
If we get the 5% it can end up to 300 million.

It is all about teh perishibility issue.
There is a book on this about Ritz - New Gold Standards

Guest Lecture from Dave Shaby Senior Vice President Bright Horizons
hourly wage - $13

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Session May 29, 2012
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Case: ThoughtWorks (A): Targeting and Positioning Basics for a Services Firm
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Case: https://docs.google.com/file/d/0B5Lqw3O0SfHoWEM1eXhoT2hFRDg/edit?pli=1
Highlights of teh case:
Positioning Dilemma
IT services Industry:
Types of projects:

1. Software package implementation
2. Custom application development
3. Mix of both

IT Spending:

• 15 years of unprecedented growth till 1990.
• Later recession
• Started rising in early 2003
• "with software projects failing (over-budget and late) at an alarming rate of 80%, a premium had been placed on competent delivery methods and capabilities"

Methodologies

1. Waterfall
2. Iterative approcah
3. agile methods - Thoughtworks pioneered this one

About ThoughtWorks

TW 1.0 (1993-1997)

TW 2.0 (1997-2001)

TW 3.0 (2003-2003)

[exhibit 1]

Core Competencies

People: 1 out of 200 candidates (like McKinsey)

Culture (8% turnover in 2003 - way below industry average)

Agile Delivery Methods

Enterprise Architecture

Client Base:

Competition:

In-House

Big Five (Accenture, EDS, IBM, Bearing Point and Deloitte)

Offshore Development firms

Targeting Project

Type A, B and C firms: Risk takers, moderate risk and cautious in terms of technology adoption (respectively)

The Challenge:

On the basis of the information that Guerriere has, how would you position ThoughtWorks to

the target of Type A firms? What assumptions about Type A firms underlie the positioning that

you propose and how can market research explore the validity of those assumptions?

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Harvard Note: Corporate Positioning: How to assess and build company's reputation
How to build a corporate reputation in the minds of teh key decision makers

1. Who matters
2. Visibility and credibility question
3. what are the controlable factors
4. unique advantage
5. alignment of the product, product like and corporate positioning
6. single global image OR country/region based positioning
7. what communication tactics for credibility and visibility

In detail:

1) Identifying the target audience

The mistakes that happens in this part are: sins of omission and sins of commission.

sin of omission: less communication - sin of commission: inaccurate / outdated talk 

2) Assessing Visibility and Credibility

Exhibit 2

3) What are the controllable factors that can be modified other than the product policy, pricing, marketing etc.

• Personailities of senior management
• shared values
• HR practices
• non-work activities
• the company it keeps (partnerships etc)

4) Establishing a unique position

Problems in this part are:

• Irrelevant difference
• unbelievable claims
• Me-too positioning

5) Alignment question : Brand umbrella

6) Global vs regional/country positioning (debatable)

7) Communication tactics

exhibit 5 - pretty awesome exhibit for marketeers 

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Reading from the book: Professional Services Marketing pg 93-152
Chapter 8: Brand - What it is , why bother
brand advocate says: ......
brand skeptic says: .... it is soft why bother

• Brand increases sales effectiveness
• Brand helps generating leads; (reputation in market)
• Brand generates premium fees
• Brand helps beat competition
• Brand facilitates repeat business
• Brand keeps you competitive for top talent
• Brand increases the value of teh company

client perspective about the firm:

• Recognition
• articulation of capabilities
• Top of teh mind awareness
• preference
• viewpoint

Chapter 9: Three elements of well crafted brand strategy

What buyers want to know

Marketing execution steps:

1. Awareness
2. Interest
3. Purchase intent
4. Pipeline Opportunity

Messages related to the execution:

1. Positioning
2. Substantiation

Value Proposition delivery

Value proposition:

Value proposition is the collection of reasons why a company or individual will benefit with working with the firm. 

Value proposition strength and delivery

Chapter 10: Uncovering your key brand attributes

9 question: finding the strengths of your value proposition

1. What value do clients and decision makers perceive about our general category of company and services
2. What value clients and decision makers in our target market perceive about us as a firm
3. What value clients and decision makers in our target market perceive about the services we offer
4. What value clients and decision makers in our target market perceive about the particular problems they currently have
5. What value clients and decision makers in our target market perceive they could get if they are abvle to solve those problems. or get things done
6. What different options do clients and decision makers think they have regarding the solution to their problems

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Class notes of the session 

The p-score and q-score is an important concept that the movie marketers use.

Who drives the demand?

There are tow dynamics of the demand

On the book note:

Resonate - Differentiate - Substantiate

Resonate:

- Emotional

- Rational

Differentiate:

Substantiate:

4- Result

3- Company

2- Capability

1- You

Discussion on case: ThoughtWorks (A)

because the client has been unable to handle the project

Make sure the customer feedback is incorporated in the marketing plan because often times your positioning is not relevant to what the customer needs.

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Session 4: May 31st 2012


Reading: Putting the service-profit chain to work - Heskette et. al.
https://docs.google.com/file/d/0B5Lqw3O0SfHoaTBpQ09KUVEtLWc/edit

Instead of focusing on profit goals and market share, front-line workers and customer needs are teh center of management concern.
"This article sets out a simple, elegant, and ultimately tough-minded way to build profi tability in a service business. Originally published in 1994, it offers as much today as it did then and is a perennial best seller."


ARTICLE AT A GLANCE

• Highly satisfied customers drive growth and profitability in service businesses. To keep them profitable, manage your service-profit chain: all the links in your operation that affect customer satisfaction.
• Here’s how the chain works: Enhancing internal service quality (equipping employees with the skills and power to serve customers) raises employee satisfaction, which fuels employee loyalty and productivity, which boost external service value – which then increases customer satisfaction and loyalty.

ARTICLE IN PRACTICE

• Internal service quality affects employee satisfaction: e.g USAA call center state of teh art systems
• Employee satisfaction affects employee loyalty: e.g Southwest turnover 5%
• Employee loyalty affects employee productivity: e.g securities firms losing a broker means loss of $2 million business
• Employee productivity affects external service value: e.g Southwest 
• External service value affects customer satisfaction: e.g Insurance company Progressive (sends teams at teh scene of major accident....)
• Customer satisfaction affects customer loyalty: e.g. Xerox case - customer satisfaction level of 4 stars and 5 stars, willing to repurchase 6 times more for 5 stars.
• Customer loyalty affects growth and profitability: e.g. Banc One doubled the ROA by focusing on customer loyalty.

The chain

• Customer loyalty drives profitability and growth
• Customer satisfaction drives customer loyalty
• Value drives customer satisfaction
• Employee productivity drives customer satisfaction
• Employee loyalty drives employee productivity
• Employee satisfaction drives employee loyalty
• Internal Quality drives employee satisfaction

Leadership underlie\s the chain's success

Relating links in teh chain for management action

Profit and Growth

How do we define loyal customers?

Do measurement of customer profitability include profits from referrals?

how much is spent on retention?

why do customers defect?

On Customers satisfaction

External service value

measurement of employee productivity?

how do we measure and create employee loyalty?

how do you measure employee satisfaction?

Relating the measures

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Reading 2: The high growth firm; How some firms are able to grow in any market (research summary)

National study of 102 professional services firms

9 times faster than and were 50% more profitable that average growth firm.

Segmentation of teh sample firms

Segments: Architecture, Engineering and Construction (AEC) Technology (Tech) Accounting and Finance (Financial) Management Consulting (Consult)

Markets: Private Sector (Private) Government Contracting (GovCon)

Firm Size: $1 million - $1 billion in annual revenue

Location: National

Financial Performance: History of high growth

Findings

Industry matters

size matters (small show more growth)

Spending and growth (smart spending)

growth and pofitability (high growth firms are more profitaable)

Strategy:

• specialized than generalized
• have a differentated service
• are more able to convey their differentiation

Client Focus

• Description of the client
• Research about the client

Marketing tools

Elevator pitch

Barriers to growth

Lessons from teh report:

• Guard your business development budget
• Define your strategy
• Define a clear target client
• Cultivate a specialization

Techniques to consider

• Consider partnering
• Invest in more capable website
• Use outside experts and consultants
• Leverage face-to-face contacts
• Develop a good elevator pitch
• Conduct regular research about your client

Becoming a high growth firm

1. Begin by developing a comprehensive, objective view of who you are as a firm and how you are percieved in the marketplace.
2. Choose what markets you want to serve and what important problems you want to solve.
3. Stand for something. Make a promise to your clients. How are you different and better than other firms in the market today?
4. Be consistent. Your promise must be clear and consistent on your website and in your marketing materials.
5. Be consistent. Your promise must be clear and consistent on your website and in your marketing materials.

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Class Notes:
check out Net promoter score.

Good discussion on Sales and marketing both going and touching the customer for company growth. Sales people sometimes do not like marketing people reaching out to the customers. The relationship manager will have his account to himself.

Talk by Dr.  LEE W. FREDERIKSEN, Research team of teh 2nd article

Lee is Managing Partner at Hinge, a premier professional services branding and marketing firm. He brings over 30 years of marketing experience to the firm’s clients. Lee is a former tenured professor of psychology at Virginia Tech, author of numerous books and articles, and a successful entrepreneur. He’s started and run three high-growth companies, including an $80 million runaway success. Lee has worked with many global brands, including
American Express, Time Life, Capital One, monster.com and Yahoo!
Lee W. Frederiksen, Ph.D.
Managing Partner
703-391-8870
lwf@hingemarketing.com 



About Hinge
Branding and marketing firm
We sell growth
We drink our own Kool Aid (we do our own research)
Big ideas:
Top line rev
Gross online traffic
portion of new business leads that come from online vs offline

Two paths to growth:
spending your way to growth - spend on marketing

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Session 5, June 5th 2012: Marketing Mix and Tactics of Marketing Communications


Reading: Ultimate How to marketing guide - Hubspot
https://docs.google.com/file/d/0B5Lqw3O0SfHoUHpTTDdybTBxZzA/edit
Highlights of the 69 page document:

1. How to get found online as a local business
• Find leaders
• Focus on GPS-enabled services
• Check out some case studies
• Video - search terms are not always city or town based
• Still a matter of creating the content
2. How to use email list effectively
• Don't use email to only sell
• Earn the attention of the email subscriber
• ask: "why is this emial going to be valuable to the person I am sending to"
3. How to Optimize your press release
• Submit your release to distribution services (Yahoo and Google news)
• Where to submit your releases: PRWeb, PR Newswire, Business Wire, Marketwire and Prime Newswire (hyperlink to your website)
• make sure hyperlinks are directed to specific pages
• Don't forget to publish on your own site, media page or something
4. How to ask your boss to reduce Traditional Marketing
• Ask people about their habits
• Do they go to the web? do they ask friends for advice? or do they go to the yellow pages and see teh ads over there?
• Will you remain a change agent?
5. How to keep up with the competition
• Beware of your competitors (be aware but don't be obsessed about them)
• don't copy the competition (concentrate on the right things / your strengths)
6. How to learn from companies outside your industry
• Marketing lessons from teh "greatful Dead"
• Don't limit yourself
• Learn from companies you love
7. How to measure Online Marketing
• Challenge old metrics (not just sales)
• Focus on exposure (higher in teh funnel)
• What should you measure
• performance in search engines
• following on twitter and facebook
8. How to make most of web ads
• How to make sure online marketing/ads generate maximum conversion
• Ad copy and graphic (maximum clickthroughs)
• Landing pages lead to high conversions - landing page should reveal what the ad promised (actionable item)
9. How to deal with negative comments (they can sometimes be a good thing)
• Understand the criticism - respond to them and show that you care
• React in the same channel
• don't respond to bullies
10. How to write and eBook for Business "Long form content is a core element of building valuable marketing offers"
• Don't write about your product
• Choose a topic that solves a problem
• Leave your comfort zone "go out in the marketplace"
11. How to crowdsource videos for business
• Create a contest for best video
• See how other businesses did it
• Give people an opportunity - "give people an opportunity to express themselves, don't think this of getting videos for cheap. Don't exploit them but celebrate their unique perspective and knowledge. 
12. Use the web to optimize offline events
• Prepare your audience before the event
• Use realtime platforms during the events (twitter hashtags)
• Post archived materials after the event
13. How to keep up with News and emerging trends
• Pick and chose what's important
• Use alerts to filter out the noise (google alerts, twitter alerts - tweetdeck, hootsuite)
• Don;t forget serendipity :)
14. How to create an effective buyer persona - "a buyer persona is when you slice your marketplace into individual groups of people"
• Interview your buyer personas - make sure people you pick up aren't your already your customers. Ask them open-ended questions that are not necessarily related to your product.
• Create profiles for the personas - even create images i fit works
• How to market to buyer personas
• Ask teh question how would a specific profile react to this ad
15. How to find time to create content
• Stop looking for excuses
• It shouldn't consume your whole day - use single tool to save time
• Just fit into your day
16. How to optimize your twitter presence
• Your twitter background
• Your photograph
• your twitter Bio - make sure you include a link
• Your tweets
• action-oriented language
• post regularly, even over the weekend, weekends are better in engaging people.
• make sure your posts have links to landing pages
17. How to chose images for your website
• Don't use stock photos to represent you
• Use authentic images
18. How to qualify leads for your sales team - "recognize that customer acquisition is a process shaped by both marketing and sales"
• Improve lead quality - solid lead scoring system
• Ask qualifying questions - "biggest challenge"
• Design a mix of offers
• Develop a scientific approach - use closed lead as a reference
19. How to leverage paid media
• What is earned media - content you create and get others to share
• What is paid media - when you spend money on someone else's media
• Where paid media makes sense - distribution of press releases, increase SEO
• The biggest mistake - paying too much for paid media, primary target should be earned media
20. How to kickstart your mobile marketing
• Optimize your site for mobile
• Location is your friend

Check this out - Hubspot's marketing tool

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In class notes


Guest speaker: Paul Dunay, Chief Marketing Officer, Networked Insights. Author Facebook marketing for Dummies
Networked insights:  http://www.networkedinsights.com/
Social media analytics/insights company
- we believe that social data should be at the core of your marketing decisions

there are data aggregaters - GNIP http://gnip.com/

Case study: Teen wolf

media optimization using social
cost per lead calculation is important

The word farsees http://en.wiktionary.org/wiki/farsee

Session 7: June 11, 2012
Case: El bulli - taste of innovation
http://www.docstoc.com/docs/27854591/elBulli---Case-Study
http://www.slideshare.net/egalbois/el-bulli-case-study

Case highlights
The experience
Getting a reservation - 8000 out of 2 million requests every year, wait of 4-5 years
Getting to elBulli: quite a ride - middle of nowehere - no signs
The tour
The meal: 35 dishes, come with teh description how to eat - a roller coaster ride - 8:00 PM - 2:00 AM

Behind the scenes;
60-person team - 30-40 cooks, 50 customers each day - 15 tables
from 7:00 AM to noon team purchases the products from local suppliers (best)
Adria arrives at the place at 10:00 AM (after 8 hours of sleep)
Cooking starts at 3:00 PM

Origin or elBulli
Not so important :p
First was a gold course then ..... got one Michelin start then downgraded then back again....
Adria joined in 1983

Adria's style
"To create is not to copy"
Chef Robuchon, then one of teh most prestigious chefs ate there and became passionate about elBulli
Molecular Gastronomy
deconstructing dishes and then creating the flavor; pea soup, spanish ommlete

Innovation in the elBulli Lab
Early Oct to late March teh restaurant was closed and Adria worked in the R&D lab
Everything in elBulli needs to be changed every year

Side Projects:
Book publishing
Hotels and fast food
Consulting
- elBulli itself is not a business, what interests me above all is creative cuisines. I am not a business creature -
The restaurant
An average Euro 250 meal price per person - elBulli hardly broke even

- I do not cook for millionaires, I cook for sensitive people

Creative concepts in Use at elBulli - exhibit 7


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Reading: Creating New Markets Through Service Innovation
http://sloanreview.mit.edu/the-magazine/2006-winter/47213/creating-new-markets-through-service-innovation/
https://docs.google.com/file/d/0B5Lqw3O0SfHoUlZvbGlEanNHc0E/edit?pli=1

Services now make 70% of the aggregate production and employment and 75% in GDP of US.
Two types - market creating service innovation VS incremental service innovation
Market creating service innovation: examples Enterprise rent-a-car and FedEx

Taxonomy of service innovation: two primary dimensions:

1. The type of benefit offered: businesses can innovate by introducing new core benefit. e.g. Cirque de soleil,  University of Phoenix (delivery method changed - internet)
2. The degree of service offered: in places of 'separability' issue - healthcare

Four types of service innovations in teh above figure

These innovations can be characterized on two dimensions: (1) whether

they offer a new core benefit or new way of delivering a core benefit, and

(2) whether the service must be consumed where and when it is produced

or can be consumed separately from its production.

1. A scalable business model
2. Comprehensive customer-experience management - specially for inseparable service business
• functional clues
• mechanical clues
• human clues
3. Investment in employee performance: Cirque de Soliel
4. Continuous operational innovation: FedEx (tracking system), Starbucks
5. Brand differentiation: very imp for cell 1
6. An innovation champion
7. A superior customer benefit (bank ATM, online search engine)
8. Affordibility: Southwest
9. Continuous Strategic innovation: Google

Bottonline: Culture of innovation

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Class Notes:
Exercise; teams of four
Restaurant wars

1. Appeal to consumers
2. Business case - most viable investment

Myers and Chang co-owners

Tony -

realto in cambridge

fire and ice

tell the story

$40-50

seasonal food

Menu

Mediterranian 

Shish Tauks

Hummus

Parmeson chicken

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Session 8, June 14 2012
Reading: Harnessing the Science of persuasion 


The six Principles:

1. The Principle of Liking
• Application: Uncover real similarities and offer genuine praise
2. The Principle of Reciprocity
• Give what you want to receive
3. The principle of social proof: People follow the lead of similar others
• Application: Use peer power whenever it's available
4. The Principle of Consistency: People align with their clear commitments 
• Application: Make their commitments active, public and voluntary
5. The Principle of Authority: People defer to experts
• Expose your expertise; don't assume its self evident
6. The principle of scarcity: People want more of what they can have less
• Application: Highlight unique benefits and exclusive information

Lessons on Selling consulting services


Selling better

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Guest: Greta Roberts - CEO Talent Analytics
also a member of International Institute for analytics
Agenda
-what we measure
-how we measure
-why we measure
-how this can be useful to you
-what we've learned about you

presentation:
https://docs.google.com/presentation/d/1ux3msz3hEWubTdMoiS-m_oUswSMsqH4kUfGF4bQ3CQM/edit

Sales simulation
http://sellingconsultingservices.com
Go to lessons and simulation
use login: [My school name]
pwd: [townname2012]

qualification criteria
F Funds
A Authority
I Interest
N Need
T Timeline

FAINT is better since the word budget is not correct for something that is a new opportunity.
or
B Budget
A Authority
N Need
T Timeline

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Session 9 19th June 2012
RAIN Interactive sales training


Lesson 17: Create a winning proposal
Conversations win you deals, proposals don't but bad proposals can definitely lose you deals.
Which road?

1. Focus on the client immediately - give them a story about them
2. Focus on the discussion - don't take detours, don't brag about all your services, focus on the service being sold at hand and the discussion done with the client.
3. Focus on clarity - don't put too much technical jargon in the proposal. focus on clear information for teh client that is relevant to the project or service.
4. Focus on the value - not on what and how BUT why they should move fwd. explain the business case for them. 
5. Focus the client on the Next Steps - Calls to action, signatures, next steps, focus focus focus

Elements to include in the proposal - Use RAIN selling model

1. Current state - focus on the A and I (application and teh impact) form teh selling model
2. New Reality - the N in the RAIN
3. Why work with my company - what are the differentiators
4. Don't put them in the beginning, tell them about them first and then talk about yourself and why you are the most valuable.
5. Overall success metrics
6. Bottomline - what is the thing that i am trying to achieve

Talk to the person who write the RFP or who is going to review it.

Who's the buyer? What are you selling?

How long?

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In class
Discussion on the Muppets sales pitch to CVS

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Session - FINAL
Guest speaker: Boston Children's Hospital - Margaret (Babson Alum, Chief Marketing Office)
World's number 1 children's hospital (pediatric)
$250 Mn in research
$2 Bn revenue