Selling a custom service to each and every client can be tedious and time consuming. The intangible nature of services often makes it difficult for customers to appreciate what they are buying and, ultimately, the value of what they are paying for. For vendors, services businesses are usually synonymous with ‘one shot’ engagements leading to inconsistent cash flow. This is why many professional services firms attempt to turn their services into products. Products are generally easier to describe, easier to price, and easier to bill. In other words, they are repeatable and serve to alleviate some of the unpredictability associated with traditional services businesses.
Having spent most of the last two decades working in services-based businesses, I’ve witnessed the attempted conversion of dozens of services into products. Sadly, I can only name a few that actually took hold. But what went wrong is consistent in almost all of the cases:
One size rarely fits all
Let’s face it, services are services for a reason. They’re intended to solve the unique problems of a unique customer. Those problems, while similar, are usually not identical to those of other customers.
Go-to-market planning is often ignored
Firms that market tangible products don’t tend to wing their launch planning quite as much in my experience. This is because they have costs associated with making, marketing, shipping, and/or storing the product which helps them to focus on the steps required to bring the product to market. This isn’t true in all cases, but services firms face fewer upfront barriers to packaging a product as a service. Just make a sell sheet and you’re ready to go, right?
Repeatability is not a forgone conclusion
Services firms try to say “yes” to helping customers with their challenges, even if it means stretching beyond their immediate comfort zones or expertise. Sometimes, this leads to an ill-defined endpoint. Other times, the engagement involves a wide and illusive cast of characters from the client organization. In either situation, the repeatability factor drops exponentially. Unless you can clearly define who you are selling to and exactly what value you are providing, then your service may be ill-suited for conversion into a product.
So, what can you do to successfully convert your service into a product?
The best way is to craft a thorough marketing plan. At a minimum, take the time to consider the elements below which will help you to evaluate whether or not your service is a good candidate for marketing as a product:
What are the conditions within your market that make your offering relevant and appealing?
Target customer and buyer
Do you know which companies need your offering? Do you know who within those companies will influence or make a purchasing decision? If the “who” is different in every company, you need to carefully consider the viability of making your service into a product.
What problem does your offering solve. “Does” is underlined because you’ll need decide exactly what problem your newly packaged product will solve. It can’t be all things to all people. You need to focus in on a market problem and bring the best solution to bear to help solve it.
Description and Value Proposition
Can you clearly state what your product offers and the value it will bring to customers? This also means you need to decide what it will not offer so that you achieve the repeatability you are seeking.
The points above seem relatively straightforward and somewhat obvious. But, I’ve seen companies skip over them time and again only to “launch” a new product and have it stall out before it ever gets off the ground. When the sales and marketing process begins before you have a clear definition of what you plan to offer and who to sell it to, nothing will click. Lots of activity will happen. The chances for success will be minimal.
Take the time to answer the hard questions upfront to create the best possible scenario for a successful launch!