Service Marketing Challenges and Solutions To Overcome Them

by | Sep 11, 2022

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Service Marketing Challenges

Can you believe the service sector contributes 74% to the economy of developed countries and 57% to developing countries? The numbers are hard to believe because, as a service provider, only you know how difficult it is to convince a customer to buy your services. Now the question arises, how? How do these service providers manage to promote and sell their services to customers so that they contribute this much to the economy?

There must be some secret right? Well, the fact is, the mentioned numbers are the contribution of large service providers in the world like Google and Amazon. But what about the small service business owners? These companies do not have any marketing experts who look after the promotion and advertisement of services. And, usually, they face several marketing challenges in the service business. So if you are a small business owner facing service marketing issues, this blog is for you. It is a fact that it is more challenging to market services compared to products. That is because of the unique characteristics of services. Let us first discuss those characteristics.

What Makes Service Marketing More Challenging Than Product Marketing

Charecteristics of services marketing


Services do not have any physical appearance like products, Which makes it challenging to convince a customer that a particular service will give the best results. Because customers can not see, touch or experience a service, they can only experience its final results. Let’s take an example of a painting contractor. No matter how properly you explain, a customer will only believe you when you show pictures of your previous projects or client reviews.


Another characteristic is inseparability. It means you can not separate the consumption and production of the service from the service provider. For instance, when you buy a TV, you can install it at home and enjoy watching it for years. But you can not do the same with a soccer match. The customer needs to be present at the place of service to consume a particular service. Moreover, services can be availed for a specific period, and then it’s over until you pay again for them.


Perishability is another characteristic of services. These are similar to food products. Just like food products can not be stored for a long time, services also require continuous sales. It doesn’t mean services will ruin or something, but if you don’t sell your services, there won’t be any revenue. Let’s take the example of a salon or spa. If there are no customers, the owner can’t cover the operational costs like rent and electricity. To avoid that, you will continuously need to find new ways to attract customers.


Unlike products, services are not produced under standard conditions. Services involve people’s interaction. And they are served and consumed under varying conditions. It causes the quality of service to vary even if it is provided by the same person. When you purchase two same products from a store, you will get both of them of the same quality, but this may not be possible in the case of services. This issue can be controlled by proper training and maintaining quality standards. Because of the above-discussed characteristics of services, it becomes difficult for customers to trust any service provider. And it is a challenge for you to market your services in such a way that it creates a feeling of trust in your customers, and they purchase your services.

Major Challenges In Service Marketing & Ways To Overcome Them

Challenge – Not Able To Set A Goal

As they say, “life without goals is like a race with no finish line; you are just running to nowhere.” This same thing applies to marketing. Marketing without setting a goal won’t make you any profit, but it will cause unwanted expenses. A few years back, when we used to hear the term “marketing,”  we probably used to think about the conventional hoarding or TV and newspaper ads with an image of a product or service along with other details. But nowadays, the concept of marketing has changed. Gone are those days when people were doing marketing only to increase their sales. Well, even today, the primary aim of marketing remains the same but not directly.

Marketing experts throughout the world focus on brand awareness, improved customer relations, and, most importantly, increasing customer value. These marketing goals may not seem that beneficial initially, but they surely help in the long run. As a small business owner, you need to set specific goals that meet your business requirements and are beneficial to you in the short and long term. When you start advertising your services, you need to know what outcomes you want from them. By setting a marketing goal, you will have the right direction and plan of action; because every destination requires a different marketing strategy.

Let’s take an example of a salon. If you start a new salon, your primary goal should be making the customers aware of your business using social media marketing and similar strategies. On the other hand, for an old salon, the goal should be to attract new customers by, let’s say, offering discounts.

Service Marketing Goals

Improve Brand Awareness

Creating a renowned brand will certainly help your service business in the long term. As people only trust a well-known brand. So improving brand awareness can be one of the goals of your service marketing.

Also Read: Branding Your Small Business With SEO

Generate Leads

Lead generation is the first step in selling any product or service. Because the leads are nurtured and then converted into customers. With the right marketing strategies, you can generate high-quality leads that will increase your revenue.

Increase Website Traffic

A website is the face of your service business, and high website traffic is a sign of successful marketing. If your business website has high traffic, you are likely to generate more leads and get more customers.

Acquire New Customers

This goal is suitable for old businesses that are willing to expand their customer base. If you are a renowned business owner looking to promote and sell in your locality, you can use strategies like referral marketing and discounts to attract customers from other locations.

Improve Customer Value

Along with getting new customers, it is essential to keep a good relationship with the old ones. Every brand nowadays is trying to increase customer value. Because old customers not only generate revenue but also refer your services to others.

Challenge – Not Able To Create A Marketing Plan

Another major challenge in service marketing that people often face is not being able to create a results-driven marketing plan that will give you precisely what you want. It happens because of a lack of knowledge in marketing. After defining your goal, you need a proper marketing plan that will be a road map for your service marketing. Using this plan, you can set, execute, and track your different marketing strategies to achieve a specific business goal.  Before we discuss how to write a services marketing plan, first, you need to understand that the same marketing plan won’t be helpful each time. One needs to make appropriate changes in the marketing plan depending on the defined goal.   People often make the mistake of following others’ plans and strategies. But you need to understand you can not use the same plan for gym business marketing and carpet cleaning business marketing.  Solution-

Service Marketing Plan

Define Business Objectives

As discussed earlier, knowing what specifically we want to achieve is necessary before we start working for it. Defining the business objectives is nothing but setting a clear marketing goal. As the renowned S-M-A-R-T method, your business objective should be specific, measurable, attainable, relevant, and time-bounded. Because by only defining clear objectives, you can track whether your marketing is successful or not.  Let us understand this with an example. Suppose you are the owner of a carpet cleaning business. Then while defining the business objectives, you will have to be very clear. Like you can set a target that within one month, you want to generate 50 potential leads that you can convert into customers. Or you can define an objective of improving the customer value by providing them helpful information about carpet cleaning and maintenance.

Identify Targeted Audience

It is a crucial step in writing a service marketing plan. Targeting the right audience is necessary because it helps you achieve the defined business objective by setting the right marketing strategies. On the other hand, if you fail to target the right audience, all the money you put into marketing will be a total waste.  For instance, you own janitorial cleaning business. So to get more new customers, you only need to use janitorial marketing ideas targeting the higher authorities of that organization or the business owner. Because the higher authority is the one who decides whether to get their commercial place cleaned or not. You won’t get any results if you target the employees. Similarly, factors like age, interests, gender, location and financial condition should be considered while defining the targeted audience.

Prepare Marketing Budget

You can not spend money blindly to market your service business. There should be a proper budget for how much you are supposed to pay for reaching a particular goal. You can use several marketing strategies for free, but there are some hidden costs that you need to consider.    For example, you can use social media channels to promote your restaurant, and it is a free tool. But to create the posts for social media, you need to hire professional photographers or graphic designers. And, if you hire a freelance on sites like Upwork or full-time job professional to manage your social media accounts, you need to consider those costs in your marketing budget.

Select Marketing Strategies

There are lots of marketing strategies to advertise service businesses. But depending on your business objectives, targeted audience, and marketing budget, you need to choose specific marketing strategies that help you grow your business because not every marketing strategy is suitable for you. You properly need to analyze your requirements and then choose a suitable marketing strategy/strategies. Factors like location, available resources, and audience can affect the selection of marketing strategies. For example- when you target a young audience, advertising in the newspaper won’t be that beneficial. But if you advertise on social media, you are likely to get leads from there.

Challenge – Not Able To Find Right Audience

Reaching out to the right customer base is essential in marketing, especially for small businesses. When you have limited funds, you will undoubtedly want to get the best results for the money you invested in marketing.  And to get the best result, you will have to analyze and target the audience that can purchase your services. For example, for the marketing of landscaping services business, you need to target high-income people with large houses having gardens or landscapes.  Moreover, when you conduct market research to find the right audience, you get to know about your customers. Knowing their interests, likes, dislikes, purchasing patterns, and several other factors can be helpful for you in providing your customers with the best service. For instance, large hotel chains store preferences and similar data of their regular customers. So whenever the same customer makes a reservation, the hotel staff already knows how to set your room of what type of food to serve. Solution-

Targeted Audience

Fundamental Analysis

As a business owner, first, you must have a clear idea of your services in terms of their benefits, quality, and price. Depending on that, you will have a picture of your customer base, and you can find your targeted audience with some fundamental analysis. You can use demographics like age, gender, location, profession, income, and interests. With these demographics, you can select the right customers who can purchase your services.

Customer Feedbacks

The best way to understand and select the targeted audience is to understand the customer needs by taking feedback from your previous and current customers. If your customers are satisfied with your services, they will surely help you with their genuine feedback. You can ask them basic questions like the problems they face related to your industry, the frequency of occurring problems, and how much they spend to solve that problem. By asking questions like these, you will also get an idea of their purchase patterns.

Use Google & Social Media Analytics.

Google Analytics is a comprehensive tool for understanding the behavior of your customers who visit your website. It provides demographic details of age, gender, location, and interests of your site visitors, which helps find your targeted audience.

Google & Social Media Analytics._

Similar to google analytics, you can use the “insight” option available on social media platforms like Facebook and Instagram. Using these tools, you can understand what response you get from different types of posts, using which you can analyze your customer’s needs and behavior.

Challenge – Not Able To Deal With Negative Online Reviews

Because of its intangibility, the quality of service can be identified by the feedback of people who had consumed that service. Nowadays, almost every small business is going online to increase its digital presence. Customers can share their feedback in the form of online reviews on such sites as Google, Facebook, Twitter, etc. Online reviews are extremely important for the service sector, especially for small businesses. But one of the major challenges in service marketing is dealing with negative online reviews. No matter how satisfactory the service you provide, you are likely to get some negative reviews. Negative reviews certainly impact your business reputation, but what’s more impactful is how you deal with those negative reviews and what’s your response to them. Because people also read the responses along with the reviews. This makes it essential to deal with negative reviews responsibly and professionally. Several online review management sites keep track of your online reviews on Google, Facebook & Instagram. You can use them for better interaction with the customer reviews Solution –

Negetive Review

Listen & Analyze The Problem

Every business makes mistakes, no matter whether it is product or service based. And in the case of services, the quality varies. So when you get a negative review, you need to first carefully listen and analyze the issues instead of getting upset. By analyzing the review you will know what’s wrong and how you can fix that.

Check the Authenticity of the Review

The Internet is an open platform, and anyone can comment on your business profile. So it becomes necessary for you to check the authenticity and genuineness of the negative review you get. With some effort, you can find out whether the review is given by your genuine customer or not. If the review is fake, you can report it or can respond that you did not provide any service to him/her.

Respond Instantly In Positive Way

Never make the mistake of ignoring a negative review. Responding to a negative review immediately and positively will certainly make your customers feel that you care about them. You can comment, “We are thankful for your feedback, and this is how we are going to improve your experience next time.” And if the customer is wrong about your services, you can say, “We appreciate your response but here is why we think we have a decent service”.

Make Improvements in the Service

Continuous improvement is essential for any business, and negative comments and reviews help you to analyze the areas of improvement in your service business. So when you get negative reviews you need to analyze them and try to improve and maintain the quality of your services. Customer experience software help you to improve and reduce negative reviews.

Final Thoughts

Marketing is not an easy job. And every business has its marketing challenges. It is a fact that several characteristics of services make them more difficult to market, but along with challenges, there are solutions too. In this digital age, you can solve most problems with tools like social media and email automation. In this article, we have discussed the most common challenges faced in service marketing and solutions to overcome them. The most important thing to consider is increased customer satisfaction and value.

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