Productize Your Service Business to Make Money While You Sleep
It seems everywhere you turn these days people are suggesting you should “productize” your service business, that is, package your services into products that customers can buy off the shelf. Brennan Dunn is currently writing a series about it. The gang here at uGurus have turned their client services experience into products. I stopped giving my expertise away for free in new client meetings and launched a coaching program instead.
Why is making products becoming so popular and how do you start?
I once had a business coach tell me that the best customer is one who walks into your business from a referral because a lot of the trust has already been built. I replied that the best customer is one who puts money in your bank account while you sleep without you knowing who they are or where they live.
We quickly parted ways.
There is no question that selling products to customers has its advantages over selling services to clients. Especially digital products.
The cost of manufacture, duplication, and distribution of digital products is minute compared to the revenue you can generate. A product is sold off the shelf as-is, whereas services are constantly being customized to suit the clients’ needs. This customization takes time and eats into profits.
Products generally don’t require as much support per sale as services do. Yes, you might need to answer some support tickets if you sell products, but, on average, the amount of support and client contact required per sale is much greater if you’re selling services.
One of the biggest advantages of selling products is that you are no longer trading time for money, so you can be making sales while you are working on your tan in Thailand (that’s not a stretch, I do it regularly).
Perhaps the holy grail of productization is selling a recurring subscription product, which means you get paid every month. This could take the shape of a membership website, software, a coaching retainer, or even premium support for your services like Shayne Sanderson at Maintainn has done.
Monthly recurring revenue adds security to your business and allows you to think creatively and plan strategically about where you would like the business to evolve. You are no longer concerned with cash flow and keeping the lights on.
Over the last year, I’ve managed to maintain my level of income and switch my model from 80% services to 80% products, and I am having a lot more fun.
So here’s one very practical idea to help you begin the process of productizing your business.
Simple Productization: Develop Field Guides
We all have a certain way of doing things, whether it be developing websites, using Github, or slicing up a Photoshop file. Most of us document these processes to remind us how to do them more efficiently in the future. This documentation usually looks like a cheat sheet or a series of steps to follow.
Chances are there are a lot of other creative professionals, just like you, looking for the most efficient way of completing the same tasks. Let’s use launching a WordPress website for a client as an example.
To make it easy, I’ll break the process down into eight steps:
- Open Pages (or Word if you’re unfortunately stuck on a PC) and write down all the steps you follow in order to install WordPress, add your favorite plugins, upload your theme, transfer the database, and hand the site over to the client.
- Make sure this document is well laid out, easy to read, and easy to follow.
- Include any relevant screenshots using something like Glui.
- Save this document as a PDF.
- Give it a meaningful title like “The WordPress Developer’s Guide to Launching.”
- Add a professional looking cover using an inexpensive template from GraphicRiver.
- Produce a realistic “pack shot” of your cheat sheet using Placeit. (A “pack shot” is an image that shows your product in its packaging, or, in this case, shows your beautiful PDF being read in an iPad.)
- Write a blog post revealing the three best tips from your cheat sheet and then offer the full version for sale.
With a few hours of work and less than $50 invested, you now have a product that will continue to generate sales over time.
Of course you need to promote it, share it with influential people in the industry, get some testimonials, and continue to update it as trends and technology evolve—but you already knew that, right?
The recurring revenue version of this could be a series of “field guides” or cheat sheets that you keep updated and continue to expand for a yearly fee. I’d happily pay $97 a year for a new cheat sheet every month that kept me at the top of my game.
One hundred customers equals $10k a year in product sales.
Now this is not going to replace your services business overnight, but if you develop a suite of products, you could gradually replace your services income with steady, reliable revenue over a period of 12 months. With the financial security of product revenue, you can now pick and choose the clients you want to work with.
Start making notes and brainstorming ideas for your first product today.
Leave me a comment and let me know if there are any other services you’d like to turn into products.