The Services Sector and the Coronavirus – First Steps in Developing a Communication Strategy

It comes as no surprise that industry pundits have concluded that the services industry will have changed beyond recognition once the pall of the Coronavirus has lifted. The major differentiating factor between the services industry and manufacturing (where supply of a physical object is the end result of the customer interaction), is that the services sector has traditionally relied on direct interaction with customers in order to deliver on their brand promise.

The services industry accounts for nearly 85% of private sector employment in the U.S. At the beginning of the pandemic, 94% of jobs lost were from the services industry. Needless to say, the challenges brought about by self-isolation during the age of the pandemic have caused those companies active in the service industry to drastically rethink how they do business.

It becomes extremely difficult to provide services to gym members or services related to airlines, banks, computer service bureaus, movie theaters, law firms, dental care practitioners, childcare, plumbing repair companies and management consulting firms in an age where human interaction is basically verboten.

It’s a situation that is not simply going to resolve itself once masses of people are released from the lockdown the virus has caused. It seems almost certain that the Coronavirus will be responsible for changing the way the service industry does business for decades to come. In fact, it may never be business as usual, at least in terms of the pre-Coronavirus world.

The latest figures from the U.S. Department of Labor put the unemployment rate at 7.9%, down from nearly 15% in April. While the drop in the unemployment rate is a good sign, many companies are realizing that changing their business strategy is not only urgent, but necessary for long-term survival. Exactly how is the service industry changing to cope with the ongoing pandemic?

Online is at the Frontline

The pandemic is already changing the way people work, shop and socialize, perhaps permanently altering the way many service industries operate. Consumers will think harder about the health implications of going to a crowded restaurant, shopping mall or movie theatre. The result is that the move to online shopping will accelerate, and more businesses will accept the advantages of employees working from home.

The data suggests that those companies that are able to pivot to a more online-orientated business model are those that will weather the Coronavirus storm most effectively and be in a position to more effectively leverage online marketing and communications.  

Questions to Ask Before Moving Forward

Before getting to the tactical implications of a new business model, the services company needs to ask some searching questions. The answers to these questions will dictate how exactly they proceed with their communications efforts.

1. Do we fully understand our business?

A services business is different from a product-oriented business and the difference depends on the specific type of service business.

The traditional definition of the service business is that the service is “invariably and undeviatingly personal, as something performed by individuals for other individuals,” said economist Theodore Levitt. However, this is not necessarily true.  Think for example about automatic car washes, automated banking services, or even vending machines. These are just three examples of service businesses in which the service is provided by machines. The strategic requirements for these businesses are different from those in which people perform services for other individuals, although those types of business also need a carefully structured approach to communication.

2. How can the business defend itself from competitors? 

Service businesses often require different competitive strategies from those of product-oriented companies. If the service business is to stand the test of time, attention must be given to the management of economies of scale, proprietary technology, and reputation of the company. The last is of overwhelming importance when it comes to developing a strategically sound communications strategy where brand identity and positioning will be pivotal to the ongoing survival of the business

3. How can we obtain more cost-efficient operations? 

Manufacturing companies can improve operating leverage, often by purchasing faster or more reliable machinery, but most service businesses are different and other methods need to be explored. One of these methods is by leveraging the power of online marketing and communications to increase the reach of messaging, and make it more effective in maintaining customer loyalty and attracting new customers.

4. What is the rationale for our pricing strategy? 

Pricing services can be challenging. Cost-based pricing is often difficult to determine, and there are few formulas for effective value-based pricing. It is important to think about the economic and psychological effects of a change in pricing strategy and how best to communicate that change in a way that encourages the perception of ‘value-added’ service, not merely one that that is cheaper (or more expensive for that matter). What can a services company do online to ‘sweeten the pot?

5. What process are we using to develop and test new services? 

Every company depends on its ability to reinvent itself. In the age of the Coronavirus, the service-oriented company must pay particular attention to this area because the sheer competitiveness of the online environment can make it challenging to protect competitive positions. The process of new service development and testing becomes fundamental to the survival of the business entity, but how is this to be accomplished without alienating current stakeholders and customers?


At iNA, we recognize that the current business environment is more challenging and competitive than ever before. The articles in this series are designed to both provoke thought and provide an element of guidance to those who are aware that structured and thoughtful communication are the keys to thriving in a post pandemic world.

The current business environment is one that will reward careful communication planning and the establishment of strategic partnerships that will add value to ongoing operations. iNA provides world class content that is aligned to your business objectives—even in times which call for out-of-the-box thinking. “You can’t ask customers what they want and then try to give that to them,” said Apple co-founder Steve Jobs. “By the time you get it built, they’ll want something new.”

The current global business environment calls for bold thinking. iNA is committed to partnering with companies that realize that amidst the chaos, there is opportunity. To learn more about iNA and how we can help your business create content tailored to your specific needs

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