Selling the Invisible

Selling the Invisible Plot Summary

Introduction

In today's economy, services dominate. Nearly 80% of Americans work in service industries, yet many still apply product marketing principles to services. This fundamental disconnect creates significant challenges because services are inherently different from products. Services are intangible - they cannot be seen, touched, or tested before purchase. When you hire a lawyer, book a hotel room, or select a financial advisor, you're essentially buying a promise that someone will perform well in the future. This invisible nature of services creates unique marketing challenges. Prospects feel anxiety when purchasing something they cannot evaluate beforehand. They worry about quality, value, and whether they're making the right choice. The core of service marketing must address these anxieties by building trust, creating tangible representations of intangible benefits, and focusing on relationships rather than features. This requires understanding both the psychology of service buyers and the distinctive nature of service positioning. The theoretical frameworks presented offer a systematic approach to making the invisible visible, pricing appropriately, developing strong brands, and maintaining client relationships that ensure service businesses thrive in an increasingly service-dominated economy.

Chapter 1: The Primacy of Service: Marketing Begins with Quality

Service marketing begins with the service itself. While traditional marketing often focuses on "getting the word out," the first principle of service marketing requires getting the reality right. No amount of clever advertising can compensate for a flawed service experience. As marketing expert Guy Kawasaki puts it, service marketers must "get better reality" before they worry about promoting it. The quality gap in services has become alarmingly wide. Many services suffer from what might be called the Lake Wobegon Effect - the tendency for service providers to overestimate their performance. Studies show that 94% of university professors believe they're doing a better job than their average colleague, and similar self-delusions affect most service businesses. This perception gap means many companies believe they're providing excellent service while customers experience something entirely different. Service quality has implications far beyond customer satisfaction. When tiny efforts produce enormous effects - what scientists call the Butterfly Effect - small service gestures can create significant business opportunities. Consider the case of Roger Azzam, a department store clerk who, when a customer's jacket repair wasn't ready as promised, personally rushed to expedite it. That five-minute effort resulted in the customer purchasing $740 worth of additional merchandise while waiting. Interestingly, service errors themselves can become opportunities when handled properly. A service failure followed by exceptional recovery often creates stronger customer loyalty than if no failure had occurred. The critical factor isn't perfection but how thoroughly and sincerely problems are addressed. If your service is difficult to explain or promote, the issue likely lies with the service itself, not your marketing approach. Marketing communications can only amplify reality; they cannot fundamentally change it. Exceptional service marketing starts with creating exceptional service worth talking about.

Chapter 2: Understanding the Invisible: The Psychology of Service Buyers

When purchasing services, people rarely behave rationally. Consider the case of Visa versus American Express: Visa cards are accepted in three times more locations, cost less annually, and offer more flexible payment terms, yet 25 million Americans choose American Express. This seemingly irrational choice demonstrates how service buyers prioritize intangible factors like prestige and status over logical considerations of utility and cost. The psychology of service buyers is dominated by several key biases. First is the familiarity principle - people choose what they know. They prefer familiar services even when less familiar options might be objectively superior. This explains why consistent visibility in the marketplace significantly impacts service selection. Second is the recency effect - the tendency to give greater weight to the most recently encountered information. Smart service marketers recognize this by ensuring their follow-up communications are as compelling as their initial presentations. Perhaps most crucially, service buyers seek to minimize risk rather than maximize gain. They don't look for the superior choice; they want to avoid making a bad choice. This "looking for good enough" mentality explains why established brands with proven track records often win business over potentially superior but lesser-known providers. When Supreme Court Justice Stephen Breyer was selected, he wasn't the most qualified candidate but rather the one with "the fewest problems." Service buyers also suffer from the anchoring principle - they form initial impressions that become extremely difficult to change. These anchors take hold quickly and influence all subsequent judgments about a service provider. Negative first impressions can permanently damage perceptions, while positive ones create a halo effect that extends to all aspects of the service. Understanding these psychological principles allows service marketers to address buyers' fundamental fears and cognitive biases, rather than simply promoting features and benefits that may never register in the decision-making process.

Chapter 3: Positioning with Focus: Standing for One Distinctive Thing

Effective service positioning requires standing for one distinctive thing in the prospect's mind. As Domino's Pizza's president Tom Monaghan explained, their success came from "a fanatical focus on doing one thing well." Rather than emphasizing quality, price, or variety, Domino's relentlessly stressed speed: "30 Minutes or It's On Us." This singular focus allowed them to own the concept of fast delivery in the pizza market, creating a powerful competitive advantage. Most service providers resist such narrow positioning because they fear limiting their appeal. Paradoxically, focusing on one distinctive attribute often broadens appeal through what psychologists call the halo effect. When Scandinavian Airlines positioned itself as "the business traveler's airline," they worried about losing tourist customers. Instead, by filling seats with full-fare business travelers, they could afford to offer the lowest tourist fares in Europe, attracting more budget travelers than ever before. Similarly, when Skadden Arps law firm focused exclusively on mergers and acquisitions work that genteel firms avoided, their expertise in this complex area created a "lesser logic" effect: if they could handle the most demanding legal work, surely they could handle simpler matters. The process of positioning begins with understanding that you cannot position yourself - your prospects do that for you. Position is a place in the mind, not something you declare. Effective positioning requires first understanding your current position in the market, then taking incremental steps to influence that perception. Like Oregon's reputation as "the rainy state" or Avis's famous embrace of being "Number Two," sometimes the most powerful strategy is accepting your current position and turning it to your advantage. Creating an effective positioning statement requires answering seven key questions: Who are you? What business are you in? For whom? What needs do you serve? Against whom do you compete? What makes you different? And what unique benefit does a client derive from your service? By clearly articulating these elements, you create a focused message that can be consistently communicated across all marketing efforts, making your service more memorable and distinctive in an increasingly crowded marketplace.

Chapter 4: The Power of Branding: Creating Trust in the Intangible

In service marketing, brands function as warranties in a realm where formal guarantees are often impossible. When a prospect cannot see, touch, or test a service before purchasing it, the brand serves as a promise that the service will perform as expected. This trust-building function explains why branded services can command premium prices despite offering essentially the same core service as non-branded competitors. Brands create several distinct competitive advantages for service providers. First, they generate more effective word-of-mouth. When someone hears a positive story about a branded service, they remember both the story and the company name, allowing them to share the recommendation. Second, brands convert more inquiries into sales because prospects feel more comfortable choosing recognized names. As the saying goes, "No one ever got fired for choosing IBM." Third, branded services face less scrutiny during the selection process, reducing the time and expense required to close sales. The value of service brands can be quantified. Consider the case of two contractors who built a successful business over seven years. Despite having no inventory, proprietary products, patents, or significant assets beyond their name and client list, they received a $400,000 offer for their company. Similarly, AMRE paid Sears $30 million annually just to license the Sears brand name for their vinyl siding business, allowing them to mark up prices 2.2 times above industry norms. Effective service brands typically have several characteristics in common. They tend to use distinctive, uncommon names rather than initials or generic descriptors. The most powerful service brands often leverage personal names (like Charles Schwab or H&R Block) or create vivid, memorable identities (like Federal Express). Building a brand doesn't necessarily require massive investment - it requires consistency, integrity, and imagination. Every service interaction either builds or diminishes brand equity, making the delivery of promised service the heart of brand building. As one executive noted, "In the factories we make perfume, but in the stores we sell hope." Similarly, service brands sell not just technical competence but the hope and trust that comes with a recognized name.

Chapter 5: Effective Communication: Making the Invisible Visible

Communicating about services presents unique challenges because services are intangible. Unlike products that can be displayed and demonstrated, services must be described and explained. This places enormous importance on making the invisible visible through strategic communication. The first challenge is overcoming indifference. Your greatest competition isn't other service providers but rather the limited attention span of prospects bombarded with messages. Effective service communication must give prospects a compelling reason to listen. The most powerful communications follow the principle of singularity. Studies comparing commercial effectiveness found that ads focusing on a single message significantly outperformed those highlighting multiple benefits. When prospects are given too many messages, they typically remember nothing or focus on trivial aspects while forgetting the main point. The human mind simply cannot process multiple messages simultaneously - a phenomenon psychologists call the Cocktail Party Effect. Effective service marketers understand this limitation and discipline themselves to communicate one clear, focused message. Service communication must also address the stereotypes prospects hold about your category. Every well-known service suffers from established stereotypes: accountants are humorless, lawyers are greedy, collection agencies are bullies. These preconceptions form the first hurdle you must overcome. Rather than making abstract claims about quality, effective communications build concrete cases through specific evidence, client testimonials, and vivid examples that prove rather than assert your value. Visual elements play a crucial role in service communication because "people hear what they see." Since services cannot be directly observed, prospects rely on visual cues to evaluate quality. Insurance companies understand this principle well, using powerful symbols like Prudential's Rock of Gibraltar or Allstate's "Good Hands" to visualize protection and stability. Everything visible about your service - from your office decor to your business cards to your personal appearance - sends signals about your invisible service quality. These visual elements aren't superficial; they fundamentally shape how prospects perceive the substance of your service and whether they trust you to deliver on your promises.

Chapter 6: Pricing Strategy: Value Perception in Services

Pricing services follows a counterintuitive logic that often defies conventional wisdom. Consider the case of an Arizona jewelry store that accidentally doubled the price of turquoise pieces that weren't selling - and promptly sold out the entire inventory. Similarly, when Timberland was struggling to sell boat shoes priced below industry leader Topsiders, they increased their prices above the competition and sales skyrocketed. These examples illustrate how price itself communicates value in the absence of tangible product features. The principle of price resistance provides a practical framework for setting service prices. If no one complains about your price, it's likely too low. Conversely, if everyone objects, it's probably too high. The optimal level of resistance typically falls between 15-20% of prospects expressing concern about pricing. This accounts for the roughly 10% of people who will object to any price, leaving a manageable level of genuine price resistance that indicates appropriate market positioning. Service providers should be particularly wary of positioning themselves in what can be called the "deadly middle" of pricing. High-priced providers benefit from the assumption of superior quality, while low-cost providers appeal to value-conscious buyers. Those in the middle, however, send a weak message: "We're not the best, and neither is our price, but both are pretty good." This uncompelling position forces you to compete with virtually everyone rather than occupying a distinctive niche. The relationship between service pricing and perceived value extends beyond the numeric figure itself. How you justify your price profoundly impacts willingness to pay. When Pablo Picasso was asked why he charged 5,000 francs for a sketch that took only minutes to create, he replied, "No, it took me all my life." Similarly, a carpenter who charged $45 to fix a squeaky floor with a single nail itemized the bill: "$2 for hammering, $43 for knowing where to hammer." This principle suggests that service providers should price based on the accumulated expertise and value delivered rather than the time spent. Value itself, however, cannot be your primary positioning statement because every service implicitly promises good value. The key is creating distinctive value that justifies your specific pricing strategy.

Chapter 7: Client Relationships: The Key to Service Retention

Client relationships in service businesses operate on a unique accounting system that differs fundamentally from conventional bookkeeping. Most service providers unwittingly operate at a relationship deficit from the beginning. When a client first hires a service, they feel they've done the provider a favor by taking a risk on something unproven. The service provider, conversely, believes they've earned the business. This perceptual gap creates an immediate deficit that grows with each small service failure or disappointment, often without the provider's awareness. This invisible relationship accounting explains why service firms are frequently shocked when clients leave. The jilted firm president often says, "We were doing excellent work. The client told us she was happy. This is a total surprise." What the president fails to recognize is how far in debt the relationship had fallen. Unlike product purchases that provide constant visible reminders of satisfaction, services quickly fade from memory. The lawn beautifully mowed one day needs cutting again days later; the tooth skillfully filled no longer aches but provides no ongoing satisfaction. Managing client satisfaction requires understanding the gap between expectations and performance. Satisfaction occurs not when service is objectively excellent but when it exceeds what clients anticipated. This explains why overpromising during the sales process creates a deadly cycle - by raising expectations impossibly high, even good performance will disappoint. Clients who feel misled not only leave but typically tell three other people about their negative experience. The foundation of successful client retention is appreciation and presence. Because services are inherently intangible, service providers must make conscious efforts to remain visible and demonstrate value. This includes regularly documenting successes, communicating achievements, and expressing gratitude. As one service marketing principle states: "There is no such thing as too often, too grateful, too warm, or too appreciative." After all the client has invested - more than the provider typically realizes - you cannot thank them enough. The most successful service businesses recognize that client relationships are not maintained by technical competence alone but through consistent, sincere appreciation and communication that strengthens the human bonds upon which service businesses ultimately depend.

Summary

The fundamental principle underlying successful service marketing is recognizing that services are promises, not products. In a world where customers cannot see, touch or test what they're buying beforehand, marketing must focus on building trust, managing expectations, and creating tangible representations of intangible value. The frameworks presented emphasize that service marketing begins with service quality, requires focused positioning around one distinctive attribute, builds on psychological understanding of buyer behavior, and thrives through strategic branding and relationship nurturing. Service marketing success ultimately depends on making the invisible visible in ways that resonate emotionally with prospects and clients. As Theodore Levitt observed, clients perceive quality not because a hotel room is actually spotless, but because the wrapped glasses and sanitized toilet seat create symbols of cleanliness. Similarly, effective service marketers don't just deliver good services - they masterfully communicate and merchandise their quality through every touchpoint. In an increasingly service-dominated economy, those who understand these principles will flourish by addressing the fundamental human need for trust in the face of uncertainty, creating not just satisfied customers but passionate advocates for their invisible offerings.

About Author

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Harry Beckwith

Harry Beckwith heads Beckwith Partners, a marketing firm that advises twenty-three Fortune 200 clients and dozens of venture-capitalized start-ups on branding and positioning. A Phi Beta Kappa graduate of Stanford, Beckwith is an internationally acclaimed speaker. He is the bestselling author of five books, which, collectively, have been translated into twenty-three languages.

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