Theorist Milan Kundera once said: “Business has only two basic functions: marketing and innovation. Marketing and innovation produce results. All the rest are costs.”
Despite the obvious value of having a strong FM and support services structure, FM will always be a cost. Of course, you could say that if you place the core business to one side you’re left with an FM function that requires both marketing and innovation throughout its operations. The difficulty with this view is that there is no product and the service is not key to business. Or is it?
What are the strategies?
Traditionally, the marketing of FM falls somewhere between operational marketing and services marketing, depending on the operations, marketplace and available resources.
Operational marketing involves getting the most done for the least cost in the fastest time frame at the highest level of quality. Services marketing, on the other hand, is marketing based on relationship and value, which may be used to market a service or a product.
Marketing in a service-driven marketplace, such as FM, is different from marketing a product-based business. There are also differences between the service provider, building services sector and technical FM (which provide a tangible product and service), and the internal FM structure in an integrated service offering support to the core business. In a typical FM scenario there are several major differences:
- The buyer purchases are intangible
- The service may be based on the reputation of a single person or department
- It’s more difficult to compare the quality of similar services
- The buyer cannot return the service
The main difference between services marketing and regular marketing is that in addition to the traditional ‘4 Ps’ — product, price, place, and promotion — services marketing includes people, physical evidence and process, as well. Service marketing also encompasses the concept of servicescape — the aesthetic appearance of the business from the outside, the inside, and the general presentation of the employees themselves.
Service marketing has been gaining ground within organisational marketing as developing economies move away from industrial to service-orientated economies. The UK is considered a matured model of this kind.
Relationship marketing
A good customer relationship allows an organisation to add value to the service it provides. However, as customer power, globalisation and market maturity have reduced most services and products to the status of commodities, a new way of adding value is needed.
This is particularly so in the building services industry. A precise, fully specified tender, is in some ways the ultimate commodity, with price the only differential. By building a relationship with a company it is possible to differentiate yourself from others involved in the tender process.
A move to relationship marketing implies a much broader approach, with people in several departments in the selling company developing relationships with their opposite numbers in the customer company. The ultimate aim of relationship marketing is to become seamless with one’s customers and suppliers. This strategy is often found in organisations that have integrated outsourced FM services.
The non-financial benefits include:
- Referral — through case studies and journal articles. For example, if you work for a high-profile customer, their status will brush off on you
- Reference — the FM industry often depends on others to give references. Large and significant customers make more desirable referees
- Innovation and learning — customers who are always innovating will help you generate ideas, which you can then use when working for others
Brand management
A brand offers customers (and other relevant parties) added value based on factors over and above its functional performance. It should demonstrate: who you are, what you do, how you do it, where you are going — and where you are now. Brands are manifested through people, services, environments and communication but they are hidden in the detail.
In FM, branding has often been seen as a ‘soft’ approach for a relatively hard industry. Creating identity is expensive, and it is difficult to measure whether you are really getting value.
Changing expectations
In the world as it was, when manufacturing was rife, and tangible products could be ‘directly’ marketed:
- Products and services were the basis of value.
- The customer’s greatest problem was purchase risk management
- The customer created their own solutions
- Performance was measured as product benefits and price
We have now moved to a definition of value that has the customer, not the product, at its centre. Customer value is created when perceptions of benefits received exceed cost of ownership.
Identity and reputation
In 2008, we have a sophisticated understanding of branding that includes the whole of a company’s reputation: its culture, identity and image.
Organisations need to distinguish between creating an identity, which can be controlled at a low level, and managing a reputation, which can only be done from the top. For a brand to work it must bring together the internal culture, the identity it uses to portray itself and its external image. A reputation is developed by understanding the culture, creating an identity and acknowledging the image.
Where to start?
Every aspect of marketing strategy and implementation can be challenged in the following FM framework.
- Draw up a map to show how your products or services reach the market, including all those who influence the decision as well as the contractual relationships
- Are there market segments that you have always ignored that now become viable? What about overseas markets?
- Good market segmentation will look at each level of the market. The FM infrastructure can make significant changes to distribution — don’t just look at the final customer but at how you reach your shareholders too
The next area to look at is differentiation and how to add value. Ask the following questions:
- What channel? — the selection of best channel for distribution is a somewhat neglected area in many marketing plans
- Effectiveness — can you achieve the position you seek through this channel?
- Efficiency — are strategies, such as using e-commerce which go direct to the market, really the most efficient option?
Conduct an audit
A marketing audit is a comprehensive, independent and periodic review of marketing effectiveness to determine problem areas, threats, opportunities, and recommendations to improve marketability.
Check the barriers to implementation before you begin. Get people involved at the start and keep them involved.
Assessing critical success factors is the first step in a process that determines the strategic role operations can play in a service firm.
Every element of your marketing initiatives should be based on formal operational marketing project management methodologies. For FMs, managing marketing projects is as much a science as managing building services projects.
With this in mind, ensure that prior to implementation:
- You have the right tools for the job
- You’ve developed operational marketing metrics for measuring team performance, and you work as a team to satisfy those metrics
- You run lean, but not mean. You have a tight organisation, with high levels of individual decision-making at every position
- Production costs are minimised because they’re so well organised in your operational marketing framework
- The tangle of the approval cycle is straightened out
Those who contribute ideas do so early. Those who approve work are kept in the loop — and there are no surprises.
Summary
The new breed of marketing-savvy FMs must identify rapidly changing customer needs and wants, determine the impact of those changes on customer satisfaction, increase the rate of product and service innovation and delivery, and develop strategies to gain their competitive advantage.
Whatever your organisation’s motivation for entering and developing new markets, a planned approach will considerably increase its chances of success.
Martin Frohock is deputy area FM for East Anglia NHS Blood and Transplant.
