Branding for Service Industries
Although the principles for branding of goods and services are generally the same there occur some differences. These arise from the different natures of both categories. The main differences that influence branding policies are that services;
- Have a changing level of quality,
- The consumer has to become involved in the consumption of a service actively,
- They are intangible and not storable.
When a brand in general gives the consumer more confidence in his choice this is even more important for services. Their quality and other features are more difficult to asses. Because of their intangibility and complexity it is harder for the customer to distinguish between the offers from the wide range of service companies are working in the market place.
Brand Structures for Services Industries
As for services, marketers use the companies name – a so called corporate brand – as the overall family brand for all the services offered. Especially for companies which offer an enormous array of services (e.g. consultants, banks) corporate names must be used to deliver more generalized benefits of quality, value and integrity. Corporate brands are a crucial means to help make the service offering more tangible in consumers minds and can enhance consumers perceptions and trust in the range of services provided by the company.
One disadvantage of corporate brands – little opportunity for developing second or sub-brands for differentiated product lines- applies more to branded products. Many companies have chosen an approach of “local autonomy but group-wide coherence” as a system whereby individual divisions and products are largely free-standing but mention is made in all literature and on all stationery and products that “company A is member of the XYZ group”. This approach is very common amongst the Big Five accounting and auditing firms. It allows their national member firms, to exploit the groups brand name and their own (brand) name at the same time. Many member firms that had joined the global firms have long traditions and a good reputation of their own. For them it is important to demonstrate their clients that these qualities are not lost, on the contrary – other qualities and services are added.
Choosing a Brand Name
The decision for a brand name has to be taken carefully because it can have a long term influence on the success of the branded product or – in the case of a corporate brand – of the whole company.
To pick out one issue of the process of developing a brand name, there is a big choice in the spectrum from descriptive to free-standing names which are often artificial words with no obvious relation to the good or service. Free standing or arbitrary names are more suitable if they are to stand for a variety of services since there is no initial association with this name. In addition they are the potentially strongest form of trademark in legal terms.
As for professional services firms a common theme in the brand names is the use of the company’s founder’s names. For instance the name KPMG stands for Klynveld, Peat, Marwick and Mitchell, Goerdeler. In the process of the merger between Price Waterhouse and Coopers & Lybrand they had to develop a new name for the new company that would exploit the reputation and heritage from both old names. This was important for the relationship with the existing customers as well as for the relationship with all employees. The result was the name PricewaterhouseCoopers. This corporate name is formed out of three names of founders of companies where the new company originates from. Both names are completely free-standing. That’s why they properly address the issues of suitability for different media, different markets and cultures and different products as well as the issue of imitation and legal protection
Marketing a Service Brand
In general marketing strategies for services add three more P’s to the marketing mix, which stand for Process, Physical evidence and People. The same principles apply to the branding of services. The careful selection and training of staff firstly assures a higher level of quality of the service that is depicted by the brand. It is up to the people to give the processes more reliability and thus to assure a higher homogeneity between the quality of the service and the personality and message of the brand. Furthermore people have contact with the customer. They have to be aware of the brands objectives so that they can “live them” and communicate them to the customer. It is not enough to communicate the message of the brand externally to the customer; the first step has to be internal communication.
Here the principles of internal marketing play an important role. Staffs are seen as the first customer of the brand. Typology of marketing in service industries applies equally to the marketing of brands in service industries:
The theme here is that the customer not only receives the message from the companies external marketing activities, but also the message from the behavior of the staff he has contact with. The impression the customer gets from the service, from the company and thus from the personality of the corporate brand is also influenced by the friendliness and responsiveness of staff, their perceived qualification and how the staff “lives” the philosophy of the corporate brand.The element of physical evidence is about the environment in which the service is offered and consumed, it is about the customers “feelings”. As for branding services, the physical evidence is closely related to the personality of the brand, which can be described as an emotional bond to the customer that grows out of the perceived characteristics of the brand. To give the service a differentiation advantage it is important to create a distinguishable atmosphere that the customer can relate to the service provider. This can be achieved by the use of corporate brand signs, corporate colors and several other themes that are common for all outlets, all employees everywhere the company presents itself to the public.
As for branding auditing and consulting firms, physical evidence is more than just to have a visible corporate identity. It is about bringing a message across. In this industry the message of the brand has to establish the emotional bond to the customer which is one of the few ways for differentiation. An good example when some clients may ask how brand building sits alongside the traditional virtues of a professional partnership – skilled individuals with independent minds able to solve problems on a case by case basis. The real challenge is turning that into a brand. Up to now many accounting and auditing firms use their job advertisements to send out their brand personality. Job ads for professional services are much more than a means of attracting qualified people. They allow the companies to present themselves with some unique personality. Today’s job advertisements not only use corporate colors and logotypes, they tell little stories, transfer messages, describe corporate cultures, and the skills and experiences of the people in these firms. For the companies the job advertisements are a good way to present the variety of services offered when they search specialists for a certain position. In that way the firms can make their brand and its personality more known amongst possible employees and possible clients.
Processes are very important in services industries since in most cases the customer is directly involved in the processes. Aspects that especially apply to the auditing and consulting industry are extremely high quality, confidentiality, timing/availability, consistency and the avoidance of the abuse of insider knowledge. The internal processes that assure these characteristics are less important for the customer. For him it is important that these characteristics are met. Again a brand can provide more confidence in the choice of a service provider. It allows to identify a provider with a good reputation for high quality processes and results. As with most other services the quality of the auditing or consulting processes can not be tested in advance. Moreover, you can change your hairdresser if you are not satisfied but it is much harder to change your auditor since public normally perceives this as some sort of sign for alert.
On the other hand, even if necessary, there are dangers in relating a brand too closely to the quality of processes. Poor quality in only one single case can affect the whole brand. Many of the professional services firms have faced the problem that one of their major clients went into bankruptcy or was accused for some illegal activity. In such situations the media often ask about the quality of the auditing processes.