I would like to be able to manage a service similar to a product so I can leverage my prior experience, lessons learned, and best practices but there are some obvious differences, right?

Swimming Upstream

I became accustomed to developing a 3-5 year strategic portfolio for the medical device products I was managing to address the life cycle of existing products – where are they on the growth curve?  Time to discontinue?     We would also regularly identified gaps in our existing portfolio based on feedback from the markets, sales colleagues, customers, etc. which led to a list of potential next generation products that needed to be prioritized.  Once the highest priority projects were identified, leaders from R&D, Operations, Finance, Regulatory, etc. got involved to begin our new product introduction process including identification of design features working side by side with customers. 

Can such a regimented approach succeed when managing and developing a service?  Services tend to be much easier to customize, so if you have 50 customers, you may have nearly as many iterations of the service. If a customer wants a new feature on the website, you can potentially set up a dedicated page for that customer with the feature. The lead time is relatively short and the cost potentially low. How then, do you maintain enough integrity of Service X that you can measure performance across customers in a way that allows you to draw meaningful conclusions about whether to continue selling in its current form, retiring it or upgrading it?

Floating Downstream

Tangible products are more ‘clear’ to manage/market/launch. The target customer can see/touch/measure/demo the product before deciding to make a purchase.  As a Marketer, I could follow every marketer’s favorite framework of the 4Ps (Product, Price, Place, Promotion), gather up competitive products, conduct bench testing, and create compelling sales tools and demos to showcase advantages. 

When marketing services, does the standard framework apply,   or are there additional ‘Ps’ to think about (…People, Physical evidence, Process, …)?  It seems like most downstream efforts emphasize describing the benefits  - in a sales presentation.  Does a sample of a quarterly report they would receive as a customer convey the same power as picking up a device, holding it in your hands and considering its impact? Translating a service into a value for a customer is a challenge indeed.

Measuring Performance

For each stent, balloon, titanium mesh, or fossa, I could measure total units, revenue (per account, per sales colleague, per region, per…), average sales price, gross margin, number of backorders, number of complaints.   Success or failure was clear.

For a service, how do we make performance equally clear?  When revenue (and margin) varies from customer to customer for virtually the same service, pulling together performance metrics is no easy feat…not to mention determining the customer ROI.     Beyond the question of how to make measurement consistent, it raises a host of other questions: How do we set a price for services?  Should we refuse customizations?

I do believe there are many opportunities to market and sell services similar to products as they both provide a solution to a customer’s problem…but in practice the variation evident in service firms makes it clear that there are differences that must not be overlooked. 

I look forward to discussing this and other topics with you on November 12^th at Belmont University!

1. Nashville is loaded with talented business professionals who consistently create and launch products and services. We have a booming healthcare industry, a thriving music industry, and growing publishing, technology and professional services industries, to name a few. Many industry-oriented networking organizations exist, but there is no organization focused on the needs of the people who develop and launch products and services. ProductCamp Nashville will provide professionals a forum for connecting with one another.
2. Creating successful products and services is an art. ProductCamp Nashville will provide an opportunity for product managers, marketers and entrepreneurs to learn from one another about best practices in creating and growing great products and services.
3. Launching a product, whether it goes well or not, invariably results in significant wisdom in what to do and what to avoid. ProductCamp Nashville will provide professionals with lessons learned and an opportunity to share their knowledge and help others benefit from their experience.