Selling the Invisible - critical summary review

The problem with services – says marketing guru Harry Beckwith – is that they are simply invisible to the client. It is fairly easy to sell high-quality products because you can let people try and experience them with their five senses. However, “services are just promises that somebody will do something.” When you sell them, you’re always selling something that cannot be evaluated immediately. So, how do you do that? How do you sell the invisible to someone? Get ready to find out!

Services and products

Even though 60% of the companies on the Fortune 500 list are referred to as services, the role of services in the American economy is actually understated. For example, industrial giant General Electric derives 40% of its revenues from services. For an even better illustration, take account of the fact that Nike, though listed as a running shoe manufacturer, doesn’t really make shoes, but merely designs, distributes and markets them. According to Beckwith, if we’re being honest, 8 out of 10 Americans currently work in service companies. “In short,” he writes, “America is a service economy with a product marketing model.”

But there’s a big difference between products and services. Products are tangible: you can see and touch them. Services, on the other hand, don’t even exist when you buy them. You can experience a car with all of your five senses at any time, but you cannot smell a good divorce attorney or hear the hum of a tax return being prepared. Moreover, only after returning from your holiday trip do you know whether you booked the right one or not. Last but not least, it’s easy to know when products fail: a car will stop working, the milk will start tasting terrible. However, beyond a certain point, does anyone really know if their house painter did a great job or merely an average one?

Most products come with guarantees because they are the result of a clearly defined, experimentally tested manufacturing process. Conversely, most services come with uncertainty because one cannot devise a process for producing, say, consistently good print advertisements. There are just too many variables. Yet, because services are provided by people we have met or at least talked about (unlike products which are “built miles away by people we have never met”), we take service failures very personally, getting through them by asking questions such as, “How could they do this to me?” The truth is they didn’t want to do that to you – they just underestimated the power of service marketing.

The essentials of service marketing 

Today’s market is astonishingly competitive. Thanks to new technologies, manufacturers can reverse-engineer products with incredible speed. Therefore, product distinctions – “the historic centerpiece of product marketing” – exist only briefly and sometimes not at all. Even if you are a manufacturer, marketing your product effectively today comes down to making the choice between reducing cost and adding value. And nothing adds value the way improved service does.

Contrary to popular opinion, good marketing isn’t about “pushing the goods” or “getting your name out,” but about making your name through high-quality service. According to Beckwith, the first rule of service marketing is this: “the core of service marketing is the service itself.” In other words, if you want to compete against McDonald’s, it’s true that you should worry less about making better burgers than about offering more memorable service to your prospective customers. However, if your burgers aren’t great to begin with, then no marketing will ever be able to save you. Guy Kawasaki’s first principle of computer marketing applies here as well: “get better reality.” That is, before you begin marketing your services, perfect your services first.

Unfortunately, most companies fall prey to the so-called Lake Wobegon effect, named after Garrison Keillor’s famous radio sign-off from his fictional hometown Lake Wobegon. “where the women are strong, the men are good-looking, and all of the children are above average.” Being human, most of us feel similarly – we think that we’re better than we actually are, and we feel that our company is better than most (if not all) of our competitors. The odds, however, is that you are average. By definition, most of us are. If you want to beat that, assume that your service is bad. That way you will force yourself to improve.

Service marketing: getting started

They call it the unattainable triangle in advertising. Its three sides are quality, speed and price. Its motto: pick two. In other words, you can’t have all three. Beckwith begs to differ. “How can McDonald’s deliver spotless rest rooms and world-class French fries in 50 seconds for 79 cents?” he asks. One of his first pieces of advice to every service marketer around: “Forget the excuses, and remember McDonald’s.”

In fact, never forget McDonald’s because, even if you are in a completely different industry, you are actually competing with the fast-food giant. Twenty years ago, you might have accepted a 20-minute order delay, as well as scruffy waiters and dirty restrooms. However, ever since McDonald’s arrived, everyone’s expectations changed and everyone’s standards about everything rose to previously unimaginable levels. If they can do it, why can’t you? “A service that does not jump to meet these rising expectations,” writes Beckwith, “will have a small revolution and a customer exodus on its hands.”

Start small. In the service sector, the butterfly effect is more than just a popular theory – it is everyday reality. As both marketing gurus and conscious customers know, in the service sectors, “tiny efforts often produce enormous, though sometimes distant, effects.” Case in point, on September 16, 1993, an energetic Dayton’s clerk named Roger Azzam promised a complaining Minneapolis executive that he would have his overdue jacket repaired and ready in five minutes. Because Roger delivered on the promise, the executive felt not only touched, but indebted to him. So, he bought another expensive jacket. Roger earned his company $740 with a gesture almost as tiny as the flap of a butterfly’s wings.

The more interesting part of the story is that Dayton’s actually profited from a mistake. If the executive’s jacket hadn’t been overdue, Roger wouldn’t have been able to amaze the customer. In other words, good service is not about not making any mistakes, but about knowing how to tackle them once they inevitably occur. For good service marketers, big mistakes are actually big opportunities. 

Marketing planning: rules and fallacies 

Marketing is essentially a three-stage process that starts long before marketing itself. Stage one is usually “product-driven” – the only goal here is to offer your clients the accepted product. In stage two, competitors enter the scene, so differentiation becomes important. The goal of this stage is to answer the needs of your clients, and offer them the desired product. That’s where most companies get stuck. And yet, as the McDonald’ses and Disneys of the world have shown us – stage three is the most important one. 

In stage three, a company must make a leap beyond the current desires of their customers and surprise them with something unique and special. It’s not anymore about the product at stage three, but about the service. Moreover, it’s not about reality and the actual, but about imagination and the possible. In two words, stage three is all about the possible service. “Don’t just create what the market needs or wants,” advises Beckwith. “Create what it would love.”

To achieve this, you have to have a plan. The first rule of marketing planning is: always start with zero. Never assume anything – not even that your company is in the right business. Rather than starting your marketing session with the question “how should we sell this product?” start it whether you’ve got a good and viable product, one that the world wants and needs. Only then you’ll really know what to do next. And only then you’ll be able to not fall into the trap of some of the most common planning fallacies:

1. You can know what’s ahead. No, you can’t. Nobody can. So, always plan for several futures, never for one.
2. Strategy is king. Strategic planning only makes sense if you constantly modify it through market-tested tactics. We learn best through trial and error, so instead of wasting your time to pick a tactic, just do them all. Do anything.
3. Build a better mousetrap. Xerox invented the mouse, icons and windows. But it was only because of Steve Jobs’ zealous belief in these ideas that they became part of our everyday lives. So, execute passionately. “Marginal tactics executed passionately almost always will outperform brilliant tactics executed marginally,” quips Beckwith.
4. There will be a perfect time. The perfect time is always and without an exception the same: right now. To quote another memorable sentence by Beckwith: “The business obituary pages are filled with planners who waited.”
5. Patience is a virtue. Doing something and making a mistake is always better than doing nothing: you can only learn from the former. So, keep moving constantly. There are many types of sharks that can only breathe when they swim. Be like them.

Position, pricing, naming and branding

Someone once said that insanity is doing the same thing over and over again and expecting different results. Well, that someone was most probably not a good marketer. Because that sentence describes half of what service marketing is: fanatical focus. As Al Ries and Jack Trout suggest in their marketing classic “Positioning,” to be successful in nurturing customers, you must sacrifice things. You cannot be all things to all people, but you can be one thing for everybody. Take Domino’s for example: for years, they never mentioned quality, price or value in their ads.  Instead, they stressed their speed: “30 minutes or it’s on us.” That’s how they positioned themselves to be market leaders. They stood for one distinctive thing that gave them a competitive advantage.

Pricing usually comes after positioning, though it can often be a part of it. Especially if you understand its logic – or, better yet, its sheer illogic. In the early 1980s, Timberland struggled even though its great boat-type shoes were priced below their leading competitor, Topsiders. They had a great product for an even better price – but they didn’t have a good business. That all changed when they increased the price. “If no one complains about your price,” writes Beckwith, “it’s too low. If almost everyone complains, it’s too high.” So, aim for a little resistance. If 15% to 20% of the people complain about your price, then you’re on the money.

Resistance, however, is the bullet you must dodge at all costs when picking a name for your company or product. Many companies aim for short, fancy designations, such as IBM or HBO. But these are not names – they are monograms. Unless you are very successful, nobody would ever remember them. Would you remember a “name” such as APC, ADC, ETI or DMM? Of course not. Also, don’t get too generic with your name: generic names encourage generic business. To get a distinctive position on the market, have a distinctive name, one that is “unique, sensory, creative, and outstanding.” Need an idea for a name? Well, start with your own. It ticks all the boxes, almost by definition.

Final notes

Written in insightful and memorable page-long chapters, “Selling the Invisible” is truly an exceptional marketing book. To paraphrase Beckwith, even though it contains many concrete suggestions, it is not a how-to book, but a how-to-think-about book. And that is even better.

12min tip

The core of service marketing is the service itself. Just as there are products that sell themselves, there are products that no marketing will ever sell.