How to 'Productize' Your Service Business Offerings
When your services business is treading water, adding products to your business plan may help keep it afloat.
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If you own or lead a professional services company, you understand the unique challenges you face in not offering a tangible product. Even if your business is thriving, you still only have so much time to exchange for money. Try as you might to maximize price or delivery and allow yourself a comfortable margin, you will still reach a natural ceiling. If you fear you're being trapped in a boutique services body, it's time to change your customers' perceptions by moving into a productized model.
When I started LeadMD, all I wanted to do was walk into a space and not have to fight tooth and nail for things that made obvious sense. I saw how few resources there were for modern marketers, and marketing automation in particular. l also learned from my eight years running sales and marketing that consultants were the biggest disappointment, and yet the only option to bridge the skills gap that existed in the market. Clients would come to us with one specific problem, we would reinvent ourselves to fit that niche, and that would be the end of it -- until one day.
We rarely applied every capability to each client at the start. There was nearly always more expertise we could offer to grow faster or in different ways. We just had to figure out how to communicate our full range of expertise and we quickly made a change to our pricing model. A year into the business, we came up with the idea of productization as a way not only to make our service offerings consistent and trainable, but also to advertise the diverse array of services we offer. This was the day things shifted from: "I know this and therefore others will pay me to do that for them," to "I want to learn everything about marketing. Quantify and organize it, and then bring it to market in a highly repeatable manner."
We analyzed how our target customers purchase the software we train them to use, and realized our best bet was to mirror this process. Clients are familiar and comfortable with the SaaS model, so why not apply it to our business? Instead of selling hours, we created packages that were easier for our clients to digest and we never looked back.
Related: 5 Sales Pitfalls That Could Hurt You Long-Term
Here's how we did it:
Determine what your customers need.
Start with what your customers repeatedly ask for. As CEOs and senior leaders, we always think we know what the customer wants. But come on, let's be real: we're out of touch. You know who's not? Our customer service reps and sales teams. Before you try patching together a menu of packages on your own, bring the sales team into the conversation. Ask for their feedback about what services are most often requested, which ones are often asked for in conjunction with others and what common complaints they hear.
From there, you can start to devise packages that customers will actually want.
Clear eyes and nimble hearts can't lose.
As someone with a Type-A personality (you know you're with me on this), it's tough to be adaptable. We look for structure and routine, so we know what we can count on and what we can control. But once you have your packages set, you have to force yourself to be open to changes. After all, an impressive new client might be itching to come on board, but only if you're willing to make an alteration to one of your packages. Is it worth it to lose the potential business, just for the sake of rigidity? I can answer that for you -- no, it's unequivocally not! So be exacting and granular in your productized offerings, but be simultaneously willing to shape each client experience according to individual needs. You'll build a better (and bigger) business this way, every time.
Related: Your Business Has Two Options: Adapt or Die
Don't offer more services, offer better ones.
When we started displaying our new package offerings on our website, it was a bit shocking to our peers and our prospects. Most companies avoid putting it all out there, especially in services businesses. Services companies tend to hide behind a smug exterior that they're too good to give away their value to the general public, and they'd be damned if they let competitors see pricing. When we shifted toward a product-based business model, there was no choice but to be transparent. After all, who's going to consider buying something when the attached price tag is a big question mark?
The result we found is that our sales cycles became longer, but the leads we brought in were more qualified. Before making our offerings openly available, we had no trouble filling the top of our funnel until it was brimming with leads. However, once we made the switch, leads were admittedly more sparse. There's no way around it and it is uncomfortable as hell.
But you'll soon realize that the people who are entering into your lead lifecycle are far more prepared to engage. They had seen the fine print of our packages and deliverables, as well as what it would cost them, and they liked it enough to inquire for more information. This meant it was far more likely a prospect would become a paying customer.
Relate: How (and Why) to Pivot From Services to Products
I've seen firsthand the value of moving on from a traditional services business model into a productized version. Everyone from your consultants to your salespeople, your customer service reps to your leadership team, and even your customers themselves, will feel a marked improvement. Sure, you can go ahead and simply provide services forever -- if you're into complacency. But wouldn't you rather refine your business -- and make a great deal more money -- instead? We are living proof that you can do both.