Branding in Services

Consumers regard the purchase of a service to be a riskier proposition than purchasing a product. Discuss the role that branding plays in services and what impact it has on customer value.

In today’s economy, services are playing an increasingly important role. When considering how it is defined however, we realize that one major aspect of a service is that it is intangible. This means that it can neither be touched or seen but is rather an experience for the consumer at the time this particular service is delivered. This intangibility is also what makes the purchase of a service riskier for the customer. Because it is harder or almost impossible to evaluate a service before it is delivered, the value that it has for the customer can only be measured afterwards. However a brand in this domain can be seen as a risk reducer, because the attributes of that brand can reassure the customer of the value of a particular service. Therefore, in a first part, we are going to explore why services can be considered as a riskier purchase. The second part will analyze the role that branding plays in services. Further, a third part will demonstrate that branding in services has an impact on customer value.

As mentioned before, a service is considered to be mostly intangible. This means that it is difficult to evaluate the value of a service before it is delivered. An explanation for that could be the following: a service often includes an interaction between a customer and the person delivering the service. It can therefore entail that the “human” factor, the interaction, is subject to variations, depending on the person delivering the service. Thus the quality of the service can also vary each time a specific service is delivered. Compared to the simple purchase of a product, a service is therefore a riskier undergoing. If for example a customer chooses a certain hair salon, the quality of the haircut he/she will receive will depend on the professionalism of the employee cutting the hair. In the event that this particular person is having for example personal problems this day, the quality of the haircut may suffer from it.

Acquiring a service is therefore considered to be a riskier process, because of its intangible nature and the fact that the interaction between a customer and the person delivering the service can influence the quality of the service delivered. Some authors even call the “service encounter”, the moment of interaction between the customer and the firm (Lovelock, 1988), to be the “moment of truth” (Norman, 1984).

In order to reduce the risk that comes with the purchase of a service, companies have put in place branding strategies for the services they offer. A brand is considered to be a risk reducer, as it can increase the consumer’s trust in a particular service. According to Ambler and Styles (1996, p. 10) a brand can be defined as follows: “. . . the promise of the bundle of attributes that someone buys . . . the attributes that make up a brand may be real or illusory, rational or emotional, tangible or invisible”. In services, the emotional value of a brand is what makes it unique. This is also the factor than can enable costumers to develop an emotional connection to a specific service brand. Further, in services, according to Berry et al. (1988), the company name is the brand name. The employees of the company therefore also represent the brand. It is vitally important that theses employees are able to correctly communicate the values of a brand, as for service brands, those values are communicated on every single point of interaction with the customer. The authors of “The criteria for successful brands” even state that “there are far more points of contact between services brands and stakeholders, necessitating more attention to a coherent communication strategy internally and externally”.

Doyle has pointed out that there exists four dimensions that make out strong branding, all of them which can be applied to services. These dimensions are as follows:

- Prioritize quality = this can contribute to increase the competitiveness of a brand by improving margins and developing market shares

- Offer superior service = many customers tend to switch brands when they are not satisfied, so it is important for services companies to differentiate themselves by improving their offers

- Get there first = this means to be the first on the consumers mind

- Be different = especially in mature markets, differentiation can help the companies to attract more customers

Examples of such strong brands in the domain of services can be found in many different industries. One example that can be stated is the one of Google: an internet