Physical evidence is vital for all businesses but is extremely important for firms that offer a service. Physical evidence is defined as "the environment in which the service is delivered and in which the firm and the customer interact, and any tangible commodities that facilitate performance or communication of the service." Examples of physical evidence can be found in the exterior design of the building, signage, and surrounding environment among many others. It has quite a profound impact on the customers and if managed correctly can add immense value to the business. Service firms need to create an environment that enhances the customer experience. It is also a key indicator of price and quality.
Price
Price is ambiguous when it comes to service firms. Customers are unaware if they are getting a hell of a deal or are being taken for a ride. So how can we indicate the value or price of the service? We need to give them visual and atmospheric cues to help them understand what they are really paying for. This is where physical evidence comes into play and why it is so important. For example, a customer goes to a psychologist looking for assistance with some issues they are having. They have no previous experience with a psychologist and have no idea of the going rate for a therapeutic hour. They walk into the office and it well lit with high-end furnishings. They are greeted by a professionally dressed receptionist that asks, "how can I help you?" They are then seated in a comfortable waiting area where they can read magazines or surf the internet on the provided WI-FI while they wait to be seen. The customer (patient) is relaxed and comfortable.
The doctor then calls their name and they head into the office. The office is beautifully designed and furnished. Multiple sculptures and paintings are placed throughout the blue wallpaper. Located above the doctor's desk is her graduate school certificate as well as her ID number stating that she is licensed to practice. The room is a perfect size, giving the patient enough room for their space, but close enough so they can be heard. The doctor is professionally dressed and gives off a warm smile while they both get to know each other.
Now, what are some tangibles that are indicators of the premium price that the psychologist charges?
First, we want to look at the receptionist or the first contact employees. Some indicators can be the professional dress, the quality and amount of furnishings in the office as well as the doctor having a receptionist. Next, we can look at the doctor, who is another contact employee. She is dressed professionally, her office is well furnished and decorated, and she has her certificate signifying that she can practice psychology. Throughout the experience, the patient is analyzing these tangible ques and is making a judgment that will impact their overall experiencee.
Now, when the doctor sends a bill for $250, the customer will not feel caught off guard. They will remember the experience and all the tangible indicators of the office.
Quality
Understanding quality is just as difficult as understanding price. How can a consumer know if they provided the best service possible? I look at quality as the provider creating a relationship with thier customer that no one else can. Physical evidence also plays into this aspect of providing a service. We can go back to the psychologist example and see a few indicators of quality. First, we see that the psychologist is licensed. If the degree is from a prestigious school then the perception of quality increases. We can also look at the fact that the doctor has a receptionist and is able to afford the employment of them. Quality is increased, especially if the receptionist adds to the experiencee of the client. Next is the building itself. Is it in a good neighborhood or not? This will impact the perception of quality. Lastly and most importantly is the overall experience of the client. Did they feel better after the session? Were the questions they had answered? Did they feel that they were heard? Did they get better? If these are all positive then the patient will have an increased perception of quality and will be more likely to return to the service provider.
Like I said at the beginning, services are ambiguous. They are in the grey area of business. By providing tangibles and physical evidence the service provider can convey price and quality. I hope this helps you convey value in your business!
To write this I used information from the book Services Marketing, Integrating Customer Focus Across the Firm by Valarie A. Zeithaml, Mary Jo Bitner, and Dwayne D. Gremler.
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