Service And Intangibles
Service And Intangibles
A service industry is a contract where no physical products are exchanged between an individual seller and a buyer. The advantages of such an arrangement are claimed to be proven by the willingness of the buyer to enter into such a transaction. Such public services are the ones that public sector as a whole often pays for.
In contrast, an excellent service relationship with a customer is one based on value-added activities. This means any tangible goods or services that you provide your customers should be those that are qualitative in nature. Good examples of these activities would be unique music downloads, games or software. If you provide goods and services to your customers based on your very own interests, then this clearly identifies you as a company with an interest in the customer and its interests, which is good in its own right.
You may also consider a service product such as a haircut appointment reminder. This gives your customers two choices: you can either offer them your service product or give them the option of purchasing your service product. This gives them two choices: you can either give them the option of having something tangible or you can give them the option of having something intangible – like a haircut. Again, it demonstrates your interest in the customer and their needs.
An intangibility is defined as any situation in which there is a gap between what you give your customer and what they could get from another source. For instance, suppose you sell nail polish and your customer decides to purchase some artificial nails instead of the real thing. Under this condition, your previous arrangement is no longer effective because the artificial nails cost more than the natural ones. Under the new arrangement, however, if you provide your customer with nail polish, she can have the artificial ones instead of the real thing, provided she spends a certain amount of time engaging with your brand. In other words, under this condition the gap time between the action of giving the customer the service and the delivery of the service product is regarded as intangibility.
In business the same is true of intangible assets such as knowledge or skills. If you are a general service provider, you can increase the value of your firm by giving good advice to people about specific situations. On the other hand, if you provide specialized services such as nail polish applications, you can increase your competitive advantage by making your clients aware of the difference between the two. The idea is that if they know you can provide quality services they will prefer your tangible goods and they will give you more referrals and more sales. The same is true for intangible assets such as knowledge or skills.
Some intangible assets are not goods but intangibles nevertheless. For example, some information processing services include web design, data processing, database administration and similar processes. These processes are very specific and if you want to increase their value you have to be sure to explain to your customers how such processes help them accomplish their goals and why they should choose you over your competitors. You also have to give detailed descriptions of how such services will help a customer meet a goal and give them reasons why the result will be satisfactory. This is how you make your customers understand the difference between tangible and intangible assets and how to separate them in your marketing messages and in how you manage the use of language in advertising.