It’s hard enough to be a product manager for a “real” product, just imagine how hard this job gets when your company decides to switch over and start to offer service products. You’d think that a flexible product manager could just quickly adjust and that there would be no real difference between managing “hard” products and “service” products. Umm, you’d be wrong.
When your company makes the big decision to move over and start offering service products, your life as a product manager will change big time. There are four key success factors that you will need to make sure that you take care of in order to ensure that you will be a successful product manager for services:
- Make The Company Understand That It’s Already A Service Company: Once your company has decided to start offering service products, you may find that you are already doing this. Instead of inventing new products, perhaps all you have to do is to start charging for things that you are already doing. As a product manager, your first step here will be to work with your customers to make sure that they are aware of the value of your existing services. You’ve got to be careful here: when you suddenly switch a service from being free to now charging for it, you’ve got to make sure that you clearly define the value of the service to both the customer and your internal management. The larger your company is, the better the chances are that you already have services hidden somewhere in how you are currently doing business. One of the best ways to uncover what you already have is to take a look at customer bills – often different parts of the company bill for different items and some may already be billing for services.
- Transform Your Back Office To Support Services: Product managers know just how important stable internal processes are to your ability to deliver products consistently. Bad news: when you start to offer service products you are going to find that customer requests to have the service customized to meet their particular needs will have a dramatically bad impact on your cost of delivering the product. In order to solve this problem, there are three things that you can do: (1) build a flexible platform for delivering your services and meeting customer needs, (2) monitor the cost of each of your delivery processes in order to spot the most costly, (3) use new technology to implement process improvements as soon as possible. What all of this means is that the product manger needs to stay on top of how service products are being delivered.
- Update Your Sales Teams: This may be the most important thing that you do – find a way to transform your sales force that is comfortable selling “real” products into one that can sell service products. One of the most difficult points to get across will be the simple fact that service products take a lot longer to sell and the actual process of selling them is both more complex and strategic. As a product manager it’s not your responsibility to make the sales teams change; however, how well they manage the transformation will determine how successful your product is. Understand that more often than not, a significant number of your current sales teams will end up leaving the company and will be replaced by new salespeople who better understand how to sell services.
- Focus On How Your Customers Do Their Work: Since a service product is really designed to be used by a customer to make their business run more smoothly, a good product manager now needs to shift his/her focus away from how he/she is delivering the service and start to think about how the customer is going to use the service. This is an important difference from how “hard” product companies operate – they normally focus on things like how much the product is used and how many of a given product a customer is using. A service product is really designed to solve a problem for your customer. This means that the correct way to measure it’s value is to see if it is really solving that problem. Be careful, as a product manger you may find that you have a lack of expertise to determine how to use your product to solve the customer’s problems better. This may be a great time to bring in a consultant.
Is your company thinking about starting to offer service products? Do you feel that you are ready as a product manger to take charge of these products? Is your sales team up to the task of switching over to selling services from “hard” products? Leave a comment and let me know what you are thinking.