#4 Tools of Assets & Influence — Turn your SERVICE into a PRODUCT
This is the fourth in a series of 24 rants where I deconstruct the key drivers of growth and profitability for traditional service or advisory businesses. About us »
I’ll share principles and real business case studies for establishing yourself (or your team) as a Key Person of Influence in your industry, while formalising the essential business assets proven across 2000+ businesses to accelerate growth, profit and lifestyle.
To go back to rant 1 in this sequence, click here.
I’m in a ranting mood.
For business owners, the anxiety of not enough time or money tends to be the result of having built a service business rather than a product business.
NOTE: I’m not suggesting that your accountant give up being an accountant and start selling kitchen utensils or that your chiro stop selling chiropractic services and just flog spikey roller balls online (I’m mashing my foot onto one as I type).
Quite the opposite.
Let’s start with a definition of PRODUCT.
Product: A structured offering designed to deliver a predetermined outcome/result for a specific niche at a set price.
I’m going to touch on all the underlined bits in this email. At my conference I bring in grownups who know way more than I do — but I want to sell you on some logic first so you know it’s worth attending.
Back to my definition. Notice I said ‘structured’, not ‘tangible’. An iPhone is a tangible product, but you can also build a productised service. It’s still a service, (like chiropractic) it’s just structured and packaged properly — ideally in such a way that the founder isn’t required to deliver it.
The problem with offering general ‘consulting services’ or creating ‘customised briefs’ for every new client is this approach injects a high degree of variability into your business model.
Variability is bad. It makes it difficult/impossible to create standardised systems and processes for both sales and delivery. This multiplies inefficiencies that often trap the skilled founder as the only one capable of delivering amongst such chaos. #hell
PREDETERMINED OUTCOME / RESULT
Charging by the hour is a rookie move. People don’t value your time; they value results.
Would you rather pay your lawyer in 6 minute increments for an unspecified period of time in the hope of eventually achieving an undefined outcome? OR would you prefer to pay a set fee for a guaranteed result? Give your customers what they want.
The lazy lawyer/consultant/anyone will argue that there’s too much variability in their clients’ needs, so they can’t price based on a specific outcome.
THEY’VE GOT IT BACKWARDS.
It’s not their clients that have too much variability in their needs, it’s themselves who are offering services that are too general.
Generalisation means you compete against more businesses, which from a pricing perspective is a race to the bottom. It also creates variability in your model that traps you in your business.
So doing any of this stuff is pretty much #batshitcrazy
Last week I went on a rant about niching. One of the additional benefits of targeting a defined market segment is that it allows you (the founder) to create specialised, structured offerings that are designed to deliver specific, pre-determined results for that unique clique of customers.
Not only does this make it easier to attract those people willing to pay a premium for a specialised (differentiated) offering, but it makes it much easier to start building out the systems needed to free you from the do delivery process.
Make a Dent.
Article written by Glen Carlson.