What Is Service Management?

Service management is a practice designed to improve an company's customer service processes. It is an all-encompassing process that tailors the customer experience from the moment the customer contacts the company until the customer is satisfied with the transaction. Parts of the customer experience can include shopping, billing, and troubleshooting. One of the most important parts of service management is avoiding service errors or mistakes.

Customer service is not just talking to customers on the phone or helping them with returns at the store. It includes all aspects of coordinating the interactions a company has with its customers, including the purchase experience, billing, and the company's website. Unpleasant customer service experiences can deter customers from making repeat purchases, and may drive them to do business with competitors.

Consequences of poor service management can include poor service performance, high service costs, or increased errors leading to customer service demands. Efficient service management throughout an entire company can help keep customer service requests down by reducing the mistakes that lead to a customer contact. A customer who has a problem with billing may have to contact the company for service to fix the billing problem. If the service issue in billing had been addressed prior to the error, the company would not have had to incur the costs of helping the customer fix the problem.


Service managers are often responsible for the service aspect of a project in which many other managers have input. This can result in more service-friendly features being cut in favor of other interests, like the budget. In these cases, it is the service manager's responsibility to stand his ground on important service-related issues so budget cuts do not impact the customer experience in a way that can harm the company. For example, if the marketing team for an online postage company designs a misleading advertising campaign to increase sales, a service manager would argue against the misleading advertising campaign in the interest of promoting a positive customer experience.

An often-forgotten part of service management is inventory. When a company has inventory on hand, it can provide the product or service more quickly than a company that has to order the product. Service management in product repair customer service also requires a keen eye on inventory. Keeping necessary repair parts on hand can mean that a service organization can make repairs to defective products quickly, but it also means that the company must pay to store and maintain that inventory. This makes balanced inventory an important part of reducing costs in service management.


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