| Summary:
To determine which of your services would be best to turn
into a product, consider what your target market most often wants from you. Is there a
specific set of steps you usually follow when first working with a new client?
One of the biggest challenges in selling professional
services is that what you are offering is intangible. Your product can't be seen, touched,
or tasted. Until your prospective clients experience what you do, they have no way of
knowing if it will turn out, whether they will like it, and how well it will work in their
situation. To make a buying decision, the client must first trust that your work will
produce the result that they need.
The most common way to package professional services is by
the hour or day. The client pays for your time, and they keep paying until the project is
declared complete. But clients are often resistant to this. You will hear them say,
"I don't want to leave it open-ended," "That seems high for an hourly
rate," "I'm not sure my budget will allow for this," or even "I'm not
quite clear what it is I'd be getting."
You can overcome these barriers to making a sale by
"productizing" your services. This awkward term simply means that you make your
service look more like a product, so that it becomes easier for your clients to buy. You
give it a defined scope, fit it into a limited time period, assign it a definite price
tag, and attach a distinctive name.
Let's say you are an image consultant, and you've been
selling your time for $75 per hour. Instead, you offer a "One-Day Makeover" at a
price of $495, and include a wardrobe assessment, color consultation, and shopping trip.
You're giving your clients a defined result with a clear timeframe and set price, making
it easy for them to buy. Plus, you are able to let clients experience a range of the
services you offer and suggest additional ways they can work with you.
A market research consultant working with corporate clients
at $150 per hour could instead provide a "Market Position Blueprint" for a flat
fee of $2500. The package would include a comparison matrix of three key competitors,
qualitative data from interviews with six loyal customers, and recommendations for
improving the client's market position, all to be delivered with 30 days. Clients know in
advance exactly what they are paying and what they will get for it.
When buying your services in a package, the client runs
less risk. They don't have to worry about cost overruns or getting an unexpected result.
They know how soon the result they are paying for will be delivered. There's also an
emotional comfort factor in buying a package. Purchasing something with a name attached
makes it feel much more tangible than simply buying hours.
For you, offering a package helps you get your foot in the
door. Once you show a client what you are capable of, more business will often result.
Even if you price your package at slightly less than what you would earn for working the
same amount of time at an hourly rate, you will probably profit more because more of your
time will ultimately be sold.
Many consultants find that fixed-price contracts are much
more profitable than working by the hour. In a survey quoted by the late Howard Shenson in
"The Contract & Fee-Setting Guide for Consultants & Professionals,"
consultants working exclusively on a fixed-price basis had 87% higher profits than those
working on a daily or hourly basis.
To determine which of your services would be best to turn
into a product, consider what your target market most often wants from you. Is there a
specific set of steps you usually follow when first working with a new client? Activities
that you perform repetitively with many people give you an opportunity to create
templates, worksheets, and other tools that you develop only once and use over and over.
This effectively allows you to charge for the same work more than once.
Be sure to spend some time on coining a unique name for
your product. You want a memorable results-oriented name that will help you to stand out
from the competition, and perhaps even allow you to trademark it.
To launch your first product, you may not need to do much
more than develop a standard format for what you are already doing, set a price, and name
your new invention. Taking this critical step toward making your services more tangible
can result in easier sales, more repeat business, and more profitable engagements. |
