Service products have a direct impact on the strength of a brand because they influence a customer's experience of the brand. Quality service improves customer perception of the brand; poor service has the opposite effect. One customer's poor experience can have a multiplying effect as customers share their experience through social media. Customers' experience of service products also has a financial impact for brands. According to Forrester Research's Customer Experience Index, a 10 percent improvement in customer satisfaction can add more than $1 billion to an organization's top line.
Experience
Brand strength is determined by two main factors -- customers' satisfaction with the product itself and their experience in acquiring or using the product. Service products create an interaction between the customer and the brand that must be managed carefully. If a customer chooses a brand and orders it by telephone, the quality of telephone response and call handling affects brand perception. If the customer signs a maintenance contract for the product and service delivery is poor, that experience also impacts the brand.
Relationships
Service products create relationships between a brand and a customer. In consumer markets the service relationship might be simple with the customer taking out a finance agreement and an extended maintenance warranty. In business-to-business markets longer-term service relationships are more common. Here, service products might include consultancy, installation, training, maintenance and upgrades. Each of those service relationships creates a customer experience and an opportunity to strengthen -- or damage -- the brand.
Quality
In an article about the book "Bold -- be Brave in Business and Win," joint author Shaun Smith claims that the brands that are transforming markets are doing so because they see everything they do as part of the customer's experience. That means companies must set and maintain quality standards for every service product and every point of customer contact. To build and strengthen a brand, the investment in service quality is as important as the investment in product quality.
Voices
The growth of social media is encouraging consumers and business customers to share their views and concerns about products and services with a consequent impact on brand perceptions -- a phenomenon known as voice of the customer. An article on the website MyCustomer.com quotes a Forrester Research prediction that voice of the customer programs will increase in importance as more brands start to recognize the financial impact of poor customer service. The programs monitor feedback in social media and manage companies responses so that they can regain control over brand perceptions.
Value
Service products have a double impact on brands. They can strengthen the intangible value of the brand by increasing and improving customer experience of the brand. Service products can also increase the financial value of the brand by generating additional revenue streams. That makes service development and quality control a key element in brand management.
