WHAT IS SERVICE MANAGEMENT?
As the discipline of Service Management takes hold in commercial enterprises as well as in institutions of higher learning I am often asked, “How is Service Management different from Customer Service?”
Service Management refers to those principles and practices that help solidify customer relationships through excellence in service across all functions of the organization. Service Management focuses on fostering:
- Customer satisfaction
- Customer loyalty
The ultimate goal of the practice of Service Management is ensuring customer retention. Service Management unifies the components of Service – a focus on customer retention – and Management – planning, directing, and controlling all service activities in a single and cohesive course of action. The discipline of Service Management is a science worthy of academic study and should be viewed as a discipline like Marketing, Finance, and Economics with its own distinct theories and practices.
The application of the principles of Service Management can lead to substantial benefits for individuals who master them – it is clear that future leaders in business will be steeped in the discipline of Service Management – and organizations that apply them. Unfortunately, Service Management is rarely found in academic course instruction or commercially available training offerings.
As we are clearly in the service and information century, it is similarly clear that we are not fully preparing our human capital to deal with the challenges of a new age. The mission of Service Management, therefore, is to ensure that as much emphasis is given to customer retention as to customer acquisition which remains the conventional marketing orthodoxy of the day.
Many organizations believe they have Service Management covered because they have a Customer Service Department. The differences between the two, however, could not be more stark. If Service Management is the science of applying the tools of modern management to foster customer retention then Customer Service is a term with no consistent meaning. It can be confusing because the term can apply to a department, a function or as I have heard some say a “philosophy.” In common usage, however, the term is used as a noun requiring an adjective to further describe it, as in “poor customer service.”
Service Management substantively differs from Customer Service in the following ways:
- Customer Service is functional and bounded by its domain like the Finance or Legal functions.
- Service Management’s scope is corporate-wide and influences all corporate functions.
- Service Management’s scope also extends beyond the traditional boundaries of the organization to include all suppliers in the supply chain.
- Customer Service is operational or tactical. It focuses on day-to-day activities.
- Service Management is strategic, influencing the long term actions of the organization.
- Customer service is transactional. It focuses on rules, procedures, and standards.
- Returns, exchanges, complaints and average hold-times are the stuff of customer service.
- Service Management seeks to find solutions to customer-related issues independent of or even in spite of established corporate norms.
By way of analogy, Customer Service is to Service Management as mechanical drawing is to architecture. That is to say, customer service is a necessary corporate activity but it is not sufficient to ensure customer retention. Only the application of Service Management principles and practices holds the expectation that the next and most important revenue dollar comes from an existing customer.