At first glance, many readers will incorrectly recognize the words "product management" as "project management" because, while project management is now a major part of the mainstream business world, product management still has not garnered the same attention as, say, inventory handling or a managing the supply chain.
But this is changing, as business leaders realize that a key component of selling to customers involves not just controlling resources, but also knowing how an operation uses those resources to create final products – and determining how they are sold. Here we'll take a look at product management, its value to a business and how it fits in with customer relationship management (CRM) strategy. (What's the CRM buzz all about? Find out more in Top 6 Trends in Customer Relationship Management.)
Using a CRM: Product and Service Businesses
To understand the particular role of product management in business, it’s helpful to start with the definition of a customer relationship management (CRM) tool. Customer relationship management, as it’s commonly defined, is a comprehensive system for managing the interactions between a business and its customers. It’s important to note that many CRM systems focus on both existing customers and prospective customers and include analyses of a sales department, as well as other business elements.
For a service business, CRM is generally used to maintain relationships with existing clients and pursue "leads." For example, many of today’s law firms use CRM tools for effective outreach. These CRM tools can be as simple as a list of names of potential clients, or as elaborate as a database with detailed lead information, linked to electronic or direct mail services or other marketing campaigns.
For a product-centered business, CRM is typically different. That’s where product management comes in: Along with analyzing sales, CRM tools for a business or company producing salable products also focus on the products themselves. That’s why, for many companies marketing physical products or even intangible service packages, product management can be an essential part of a greater CRM strategy.
Using Product Management
Product management brings many of the same kinds of technical analysis to products that a service CRM tool brings to customer analysis. With service CRM, for example, a CRM tool may compile and present data related to a customer or potential customer’s location or state of residence, age, gender, buying history or anything else that can be legally and legitimately collected by the business in question. Product management, then, creates a similar system of measurable properties related to the actual products a company sells. This might include, for example, product weights and sizes, production chronologies and product version data or anything that helps business leadership learn more about their products at a glance.
Some experts might point out a primary difference between product management and service CRM: With product management, analysis is directed at something directly controlled by a business. Since the company is already making the products, more than a few outsiders assessing product management might surmise that the company already has the product information and that product management is simply redundant. But professionals that implement these systems argue that product management is not redundant and that it presents the business with better ways to track how and when products are being made, assess inventory levels, and generally keep production metrics and other key data "in the fishbowl" for more effective decision making.
Product Management and Sales Suites
One key way that product management helps a business is empowering sales personnel by providing current product information. Veteran sales pros will often praise product management and related CRM resources because they help find new ways to attract customers and as ensure the availability of accurate data when customers, or leads, ask questions. Adding product management modules to an existing IT sales suite can make a big difference, not just in commission sales, but in how well sales staff can assist customers in the field.
Product Management in Supply Chain and Logistics Work
A closer look at product management reveals that this kind of system often works at the junction between customer-centered goals and supply chain management (SCM). Product management not only helps sales staff educate customers, but it also helps the business internally, mainly in assessing inventory in specific ways. This makes product management a key logistics component for many companies.
For example, companies using a just-in-time (JIT) method for tighter SCM might feed product management data into other technologies to ensure that excessive inventory does not pile up at a single business location, or that raw materials are not ordered at the wrong times or in the wrong volumes. (To learn more about logistics, see Big Data: Logistically Speaking.)
Product Management: A Dark Horse for Project Managers
As the dark horse of today’s sales and logistics tool kit, product management is increasingly being recognized as valuable to companies of all sizes. A company must serve its customers or risk going out of business. As a discipline, product management provides the data a company needs to determine what a product should be. In most cases, this means a product that customers will continue to buy and use. Staying ahead of this curve is what allows companies to remain competitive and profitable.