Service Differentiation and 7 Ways to Differentiate Service from Competitor

Where products are tangible in nature and easily differentiated on the basis of features, form, performance and quality, service differentiation is quite challenging and needs out of the box thinking. A common question is “How can you differentiate your services” and the answer lies in this article.

Services may be offered individually to the customer or they may be bundled with a product. For example, tours and travels are independent services offered to customers. But the service which accompanies the Volkswagen car you bought, is dependent on the product – Volkswagen.

Nonetheless, there are some common service characteristics which makes each service unique. Service differentiation can be achieved on the basis of these characteristics. Here are 7 ways to differentiate your services from competition.

1) Ordering ease

This is a differentiator on which many internet businesses are based nowadays. Have you noticed an increase in overall purchases because of the penetration of E-commerce? People used to do window shopping when they had time.

Now they just have to browse their smartphones whenever they are free. No doubt, this has resulted in more impulse purchases then the history of mankind. That is why E-commerce services are on the rise. And this is also the reason that most businesses are preferring online marketing as the mode of selling their products.

2) Delivery

Delivery is a major marketing tactic to differentiate your services. Just look at the popularity of Pizza Hut or Dominos and the only reason these 2 brands are popular because of their claim of “30 minutes delivery or free”. On the other hand look at services like Laundromat. They don’t give you clean clothes with delivery, they ask you to come to the store and get your clothes cleaned.

Both are examples which are convenient and more importantly cost effective to the customer. In terms of E-commerce, look at Amazon Prime. Where normal E-commerce companies commit 4-6 days delivery, Amazon prime commits the delivery in 24 to 48 hours max. Moreover, if you are an Amazon prime customer, you get free delivery too. This immediately attracts the customer towards Amazon.

Be it a restaurant, a travel operator, an E-commerce company, whatever products or services you have to deliver, should be delivered fast and accurate. And this delivery time should be incorporated in your marketing communications. It will help you a lot to differentiate your services.

3) Installation

Companies which sell Air conditioners or technical equipment like Cold rooms, Ducting equipment etc, have to differentiate themselves through their services. Are you likely to install a cold room when you know that the brand provides poor service?

At any time, a restaurant’s cold room has very high priced material and food items stored within the cold room. If timely installation and services are not given on site, all food items will get spoilt and the customer will suffer a huge loss. It is not only monetary affect. Due to the breakdown of the cold room, the restaurant will not be able to serve customers on that day and might have to ask customers to leave. This affects the reputation of the restaurant, and severely affects your brand image.

Besides the above heavy equipment example, even normal products require installation and it should be simple. A fridge delivered at home has an easy installation and so does a television. People have gotten so used to the plug and play systems, that they dont mind the installation services taking up half an hour of their time. But it better be a fast installation, because customers will not be ready to accept a lot of installation time for an item which is practically a day to day usage thing.

4) Customer training

Customer training is necessary and an important aspect of differentiating your services. When you are selling products which are new in the market, you have to impart proper customer training so that the customer does not misuse the product. Remember – the customer is more likely to blame your company than he is to blame himself. If he does not understand the handling of the product, that is your fault too.

Many companies understand that customer training is necessary and hence they have imparted the training as a norm in their installation procedures. When you order a stove at home, the mechanic explains you the process of using it personally. When you order a washing machine, you can have a demo call along with the delivery of the washing machine. These are ways to instruct the customer on using the machine properly so that he is happy with your service.

McDonalds, Pizza hut and Dominos, all these fast expanding franchises always have training centers to train the employees of their customers. Remember, in these cases, the distributor or the person who has taken a franchise is also the internal customer of the fast food chains. These fast food chains then train the managers on how to handle their franchise and how to teach franchise management to their employees going forward. This establishes a complete chain of understanding, thereby resulting in very few customer complaints.

5) Customer consulting

Firms like IBM and Accenture have made big bucks through their consultation offers. Customer consulting includes numerous infrastructure or operation related consulting which can be offered in the form of data management, information systems and service advisory.

Snapdeal recently introduced Account managers who will help you expand your online business. Similarly, FMCG companies via their product managers consult their distributors and help them increase their businesses by installing software and infrastructure which directly notifies the company when the dealer does not have stock or about the stocks that he needs.

A key factor in differentiating your services when it comes to consultation is being updated as well as the street level experience of the consultant. A consultant is expected to have a holistic view of the complete industry and then the company he or she is consulting. Hence, knowledge and street smarts are two things differentiating a consultation company.

6) Maintenance and repair

Repair services need to differentiate themselves with the response time. Many tech products like your Ipod and Printer have online knowledge bases which users can refer to, so as to solve their problems immediately. Other times, companies like Hewlett packard and others offer fast services to their corporate and enterprise customers.

Companies like Dell and IBM have onsite engineers who take care of all customers needs. They also ensure that the network is working properly and they take care of regular infrastructure maintenance and repair in their hand. These top companies know that breakdown of network or improper working of servers can affect a lot in the overall productivity of their employees. Hence maintenance and repairs are handled with care.

The faster your response time, and the more quality work you do, the more easily you will differentiate your services when it is a Maintenance or repair service. There is good revenue generated through maintenance and repairs as well. Look at the service centers of Automobiles. They will remind you periodically of what services or maintenance is due. And these services earn a good amount through replacement of spare parts and by keeping spare parts in stock.

7) Returns

Returns are a major hurdle to E-commerce sales as well as retail sales. Ever bought a product which just didn’t work? It happens to everyone, even if you have bought a top of the line brand. The nuisance is even worse in E-commerce, where E-commerce portals are actively advertising easy returns, to the disappointment of the sellers selling products online.

There are majorly two types of returns and two ways to manage them. How you manage them helps you with service differentiation.

Controllable returns are the ones where there is a genuine problem in the product or it got broken in transport or the product quality is not upto mark. If there is a high percentage of controllable returns, then you know what you need to improve on.

Uncontrollable returns are returns which happen because the customer did not understand the product or his experience was not good. Changing uncontrollable things is difficult and as long as uncontrollable returns are a small portion of your returned products, you are fine. Many brands have opened experience centers and automobile companies give test rides so as to manage customer expectations. This way when the customer orders a product online, he will not disappoint the seller who is selling these products.

Same goes for modern retailers. Many modern retailers, in order to sooth and convince customers, have started having their own service technicians. This is because retail is a service, and the service has to be given to the customer until the end. If it is not given properly, it results in sales return, something each company detests because of the costs involved in accepting sales return. You spent money acquiring new customers, and what happened was a sales return! It is demotivating. The best way to differentiate your service is to have lesser return rates, be it a product service or a restaurant.

Overall, above are the 7 ways that you can differentiate your services and thereby achieve service differentiation.

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