What is product/service management?
Product service management definition
Product Service Management (PSM) Definition: Product service management involves refining and adjusting a company's products or services to align with market demands and changing customer needs. It's about continually evolving offerings to stay competitive and meet the dynamic expectations of the market.
The simple product service management definition would be the development of products/services that meet market demands and customer needs — which can be indicated by product-market fit.
What are the benefits of product/service management?
Product/service management is vital to the success of a business — with benefits realized from product/service management across all three phases.
- Customer Satisfaction: product service management gives a business insight into the needs of the market and customer. Products and services can be built that service these needs through exceptional experiences — forming the base for customer loyalty.
- Competitive Advantage: always know what features and products are built by competitors in addition to trends in the market that should be built.
- Increased Efficiently: built better products faster by optimizing resource utilization and allocation.
- Innovation: create new features based on market trends or customer feedback to keep your product offering relevant.
- Revenue Growth: Increased effectiveness in marketing efforts with promotion that resonates with customers and highlights key values. Improved products and services that attract new customers through additionally identifying proper distribution channels.
- Reduced Risk: anticipate potential issues and risks through keeping track of customer preferences changing based on market trends.
- Better Decision Making: access to relevant and timely information through research, direct customer feedback and metric tracking.
What are the three main phases of product/service management?
The three main phases of product/service management are the 1. development phase; 2. introduction phase; and 3. growth phase. Here is a further detailed breakdown of the three product service management stages:
Development Phase
The development phase is the first phase of a product service manager — this stage is all about creating a product that meets market demand. This phase involves idea generation, research and developing prototypes.
Introduction Phase
The second phase of product/service management is the introduction phase — this phase involves launching a new product or service into the market. A product service manager would be responsible for helping with marketing, such as the language to use and features to highlight. It also involves the proper distribution of the product and reaching out to users for initial feedback.
Growth Phase
The last phase is the Growth phase when the product starts gaining traction. Here the PSM helps to expand the product and increase overall market share. Additional features and improvements can be added during this stage based on customer feedback. At this point the PSM also focuses on retaining existing customers to reduce churn.
Why is product service management so important?
Ensures that satisfaction for the product stays strong and meets customer needs. This allows a companies product/service to remain relevant and competitive in the market. Product service management also ensures that the needed resources are available to deliver better than anyone else in the market.
Responsibilities of a product service manager
The primary responsibilities of a product/service manager include to following activities:
Product development
This includes overseeing the three phases of product development from the initial idea to launching and sustaining the product to ensure it meets required goals.
Market Research
Research to understand customer through customer feedback surveys and researching competitors to understand offerings in the market.
Product Strategy
This includes defining the overall vision for the product as well as the roadmap and ensuring business objectives are aligned with what the teams are working on.
Cross-Functional Collaboration
Ensure teams are working towards the same goals in an effective and efficient manner.
Customer Feedback
Gathering customer feedback to quickly identify issues as well as analyzing trends to make good decisions involving product development.
Performance monitoring
Tracking key metrics and KPI's to ensure the product meets goals of the business. For a SaaS company this could involve tracking the user onboarding process and success.
Budget management
Responsible for managing the project budget.
Stakeholder Communication
Providing stakeholders with communication involving product development.
Compliance and Quality
Make sure the product adheres to regulations and standards.
Continuous Improvement
Identifying areas for improvement and innovation to ensure the product remains competitive.
How does product service management relate to promotion?
Since product service management is all about meeting market demand and customer needs — or finding product-market fit — the product service manager deeply understands customers needs. This allows them to support promotion through providing guidance on which benefits, features and value to highlight to the customers.
Promotional guidance provided by product service managers ensures that marketing efforts will resonate with the target audience. Providing the right message to the right audience will ultimately help with adoption of products — as they will provide the value communicated in the promotional materials.
Product service management definition in marketing
In this way product service management relates to marketing as it lays the groundwork for effective marketing channels needed to convey the message that will best communicate value to the customers.
Marketing example
Product/service management and marketing often go hand in hand, creating a symbiotic relationship where each drives the other's success. Take DoxFlowy.com, for instance—they nailed this integration by astutely assessing their customer needs. They identified a common pain point: the hassle of signing documents. To address this, they developed a free online signature generator. This tool not only solves a pressing need for potential customers but also serves as a clever marketing tactic. By providing real value upfront, DoxFlowy attracts and engages users who may eventually be interested in their main product: AI-powered document automation software. This strategic move ensures that users experience the brand’s value early on, paving the way for deeper engagement and conversion down the line. Through such innovative product/service management, DoxFlowy has successfully aligned their development efforts with marketing goals, showcasing the powerful synergy between the two functions.
What factors affect product/service management?
There are several factors that impact product/service management that need to be identified and prioritized to be successful. Such factors include 1. customer needs and preferences; 2. market trends; 3. technology; 4. competition; 5. regulations and compliance; 6. cost and budget; 7. supplier and partner relationships; 8. internal capabilities; 9. feedback and reviews; 10. economic conditions.
Product/service management examples
Product service management is present in many leading companies as they seek to understand the needs of their customers and the market to continuously improve and adapt (or eliminate) current offerings. You can see this in many SaaS companies that have made substantial pivots until they solved a problem that the market needed and valued.
One example would be Youtube which introduced "shorts" to keep up with a competitor "tiktok" which exploded after providing a valuable product to a younger generation.
How do customer needs and wants affect product/service management?
The customers needs and wants serve as a starting point for product/service management. Feedback from customers allow products to be developed that serve customers needs — this provided value leads to highly satisfied customers who remain loyal as their needs are being met and feel they are being listened to.
For product service managers to properly understand what it is customers need they can gather feedback directly from customers, complete market research as well as analyze the customer behavior for how they are currently using their product.