Product Management vs Service

Management

SaaS (software as a service) is one of the fastest-growing business segments

worldwide. While the line between software-product businesses and
software-service businesses can often get quite blurred, the reality is that
most digital solutions are services. Yet, many of the digital service solutions
today are still managed as products. Even job titles reflect this product-
centric mindset: i.e., product owner and product manager. Whether it’s an
unconscious bias or a conscious decision, many businesses still tend to think
in terms of products first. But what would happen if we were to start
thinking about our so-called products as services?

Products are not the same thing as services. When customers

purchase a product, they make a monetary transaction to gain
permanent ownership over a product. When customers pay for a
service, however, they receive some kind of performance on the part
of the seller. Service providers create value through their
performance of the agreed-upon service, but ownership does not
transfer.

Below are some characteristics that can help us parse the

distinction between products and services:

SaaS (software as a service) is a fast-growing business segment that

straddles the line between traditional software-product businesses
and a service-oriented model. Many traditional software companies
are offering their traditional products in a SaaS model, so the line is
becoming increasingly blurred as software-product businesses and
software-service businesses move into each other’s areas.

Despite this cross-pollination, the truth is that almost all digital

solutions are services — when we sell them, we don’t transfer the
ownership to the customer. Instead, the solutions create value
through their performance. Even so, many of the digital service
solutions today are still managed as products (either consciously or
unconsciously), both by their providers and by the development
teams that create them. This can become problematic, but it also
presents an opportunity to rethink what product management could
entail.

The responsibility of a product manager is to manage the lifetime

value of a given product or product line. They focus on making
decisions about when to upgrade a product, and what the upgrade
should include. In other words, a product manager takes on the
responsibility of building the right product.

Managing products and managing services have a lot in common.

They are both cross-functional and both are considered to be key
business functions. That being said, even though there are as many
variations of product managers as there are products, I argue that
there are some significant differences between managing a product
and managing a service.

Below are some characteristics that typically represents

Product/Service management:
What can product managers learn from service
management?
A shift from a product mindset to experience mindset

When it comes to delivering a great service, the experience is always

more important than the product itself. The product(s) is merely a
vessel to deliver the experience to the customer; it’s the experience
that ultimately matters. When they talk to their friends and rave
about your service, they will talk about the experience, not the
product itself. In the end, the experience is what they will pay a
premium for.
 For product managers: What would happen if you start focusing on
building an experience around the way the product is used? How can
you improve the principles/characteristics of the customer
experience?

A shift from what you sell to how you sell

Creating an engaging end-to-end experience demands a different

sales mindset than traditional product sales. To sell well, you need to
craft an engaging journey that ensures customers keep coming back.
These stories should, of course, focus on the ease and efficiency of
using your service, but most of all, they should differentiate your
service in terms of the experiences and memorable interactions that
the user will have throughout their journey.

For product managers: What does your customer journey look like?
What has happened on this journey from the moment the customer
first hears about the solution until it no longer proves to be of value?
How can you prolong this journey, and how can you retain value for
the customer? How can you create a feedback loop for continuous
improvement?

A shift from product line to an ecosystem

A service always lives in an ecosystem, and it’s the seamless

orchestration of players and systems that creates the service. The
context and front-line service providers define the experience.

For product managers: What would happen if you imagine your

product as a service that is part of a larger ecosystem? What and who
would be part of that ecosystem? Who would be the front-line service
providers that could help create an exceptional customer experience
around your solution? What are the relationships your customers will
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 engage in?

A shift from standardized to personalized

Even if you strive to standardize a service, any experience is always

personal and cannot be created in isolation. There is a perception that
standardization is at odds with customized individual solutions for
customers, and you can’t choose both. Standardization is great for
consistency of experience which increases customer trust, however,
the customers of today except personalization. The most successful
companies will build customer understanding and personalization
into the business processes across systems.

For product managers: Can you predict your customers’ needs? Can
you serve your customers with your solution the moment they are
looking for it? How can your product deliver personalized value?
How can you adapt your solution to meet your customers’ needs as
they change over time?

A shift from perfecting to co-creation

Service touchpoints and customer interactions can, to an extent, be

designed. However, every service experience is unique, which means
that it can’t be successfully designed in isolation from customers.
Some of the most successful managers believe that the customer is
always a co-creator of value. To achieve a successful solution, there is
a need for continuous co-creation between service providers and
customers in problem framing, value proposition, production,
delivery, and usage/performance of solutions. Creating a real-time
feedback loop reduces misunderstandings and challenges the
assumptions and biases of the development team, which in turn
allows them to deliver a better service experience. It also validates the
value proposition for continuous development, which ultimately
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 benefits the bottom line.

For product managers: Is your team investing time to find the perfect
solution in isolation from the actual customers, but not spending
sufficient time with the actual customers? Are you co-creating with
your users to ensure that you continuously deliver value?

Is there a need to shift the mindset from product-oriented to

service-oriented? Any thoughts, let me know!
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