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The consumer is the one who pays to consume the goods and services produced. As such, consumers play a vital role in the economic system of a nation. In the absence of their effective demand, the producers would lack a key motivation to produce, which is to sell to consumers.
When the physical product cannot easily be differentiated, the key to competitive success may lie in adding valued services and improving their quality. Rolls-Royce PLC has ensured its aircraft engines are in high demand by continuously monitoring the health of its 3000 engines for 45 airlines through live satellite feeds. Under its TotalCare program, airlines pay Rolls a fee for every hour an engine in flight, and Rolls assumes the risks and costs of downtime and repairs in return.
Relationships are a key factor when it comes to the marketing of services. Since the product is intangible, a large part of the customer's buying decision will depend on the degree to which he or she trusts the seller. Therefore, the service provider should listen to the needs of the customer, fulfill them through the appropriate service offering, and build a long-lasting relationship that will lead to repeat sales and positive word-of-mouth.
Given today's highly competitive scenario, in which multiple providers are vying for a limited pool of customers, retaining customers is even more important, and more cost-effective, than attracting new ones. Since services are usually generated and consumed at the same time, they actually involve the customer in the service delivery process by taking into consideration his or her requirements and feedback. Thus they offer greater scope for customization according to customer requirements, potentially offering increased satisfaction and leading to higher customer retention.
Building client-based relationships is also important due to the increasing homogeneity of product offerings. For example, many beauty salons that offer homogeneous, or similar, services such as a haircut, coloring, and styling. Having an unkempt and unsanitary salon will ensure the client will never come back. Something as simple as cleanliness is a good way to increase client confidence, especially since a client does not know how a haircut will turn out until it is done. Due to the increasing number of salons available, it would be very easy for a client to go elsewhere. However, being friendly, professional, and listening to the needs of the client will help ensure that the client will be a repeat customer.