Product Creation For Service Based Business – Package Your Services
If you are a coach, a professional service provider or someone who has spent a lot of time writing proposals, you are going to love this blog post that is all about packaging your services.
When I first started my business 17 years ago, I would spend the majority of my time writing proposals. Anybody who has been in the service business understands how much time you can spend writing proposals, giving away free ideas, only to be left wondering, if this person is even going to buy from me? So, let’s look into how you can eliminate that doubt.
Packaging your services
When I work with a service provider, whether that’s a coach or somebody in professional services, like a lawyer, an accountant, a web developer, or a social media manager, I always like to start with asking them what their zone of genius is.
When you understand what your zone of genius is and where you are finding hours passing by, it becomes really, really easy to create a product and service based on what that zone of genius is.
As entrepreneurs, we don’t want to create a business that we need to escape from. We want to be able to create products that delight us, that delight our customers, but also fall within that zone of genius. We want to be excited to show up and deliver that service or product.
Your zone of genius
When you think about what your zone of genius is, I always like to ask people to think of it in terms of their green lights, yellow lights, and red light. Imagine yourself as a traffic light.
- Red lights are things where you’re constantly putting it off. You’re constantly checking the clock when you’re doing it. It’s simply not something that you really enjoy
- Yellow lights are where it gets tricky. Those are the things you don’t necessarily love to do, but you also don’t hate to do. They don’t light you up.
- Green lights are those things where you find hours upon hours just passing by, and you wonder “how was that 3,5 hours!?” Those green lights are the places in which you want to figure out how to package your services.
Take a few minutes and write those things down. Once you’ve identified what those green lights are, that’s when we start creating a package or product or service that ties in that expertise.
The Rule of 3
The second thing I want to share with you is the rule of three and Chipotle-ing. Yes, I made that word up!
When you go into Chipotle, you don’t have the opportunity to choose whatever you want. They have a set menu of items they offer, and you have to pick from one of those. You can have some add-ons like extra guacamole or sour cream, but you can’t create your own menu. Now, I want you to start thinking of your products and services in terms of a Chipotle menu. Especially, those of you who sell by the hour, or who write a new customer proposal every single time. We are going to eliminate that!
- What is your Chipotle menu? What does it look like?
- What do you want to do? Do you want to give people three different options?
Let’s use the example of a web designer. You want to have the three different levels of your website design packages. When I think about, “How am I going to determine what my package is?”, I pick one or two of my favorite clients that I’ve loved working with, where I’ve served them at a really, really high level, and they’ve gotten great results. Think of them and figure out what it was that you did for them and that you could repeat. You want to create three different packages out of this one offer. Think of it in terms of gold, silver and bronze.
There’s also a psychological factor behind why we want to have the three offers:
Nobody likes being the cheapest and nobody likes being the most expensive.
Almost always, the majority of people will pick the middle option because they don’t want to be the most expensive and they don’t want to be the cheapest. When you can streamline your services like that, you are not only going to be able to save yourself a ton of aggravation, you will also be able to create a repeatable process from the front-end perspective on things and from the backend. You’ll be able to create a system for delivery and a system for how things are done. This means down the road when you start to grow and scale your business, you’ll be able to hire someone and delegate the delivery of some of these things. But understand you will need to create three options along the way!
A great example is Apple or any sort of computer customization website. They have these two or three base models, and you can choose between which one you want and of course they all have some different add-ons available. I want you to start thinking of your services in this same way!
Have a look at my new 30-page guide that I’ve created on the eight lessons for packaging and productizing your service.
It is very important to understand the psychology behind having three options and that ultimately, you don’t want to leave people feeling overwhelmed.
People love to buy, but they hate to be sold. If there are too many options when they are buying, chances are they will be overwhelmed, and you are going to lose them.
Have you ever gone to a restaurant and were handed a 10-page menu? You are flipping through the menu and the waiter comes over and asks if you are ready? Chances are you are not. You don’t even know what you want to eat, because it’s too overwhelming. That is what you are doing to your buyers when you’re giving them too many options.
This rule of three is really important. As somebody who’s spent 15 years as an agency, creating a very successful business, I understand that the more time you spend doing proposals, the less time you’re going to be able to spend serving clients. Create this suite of services via the rule of three.
Don’t leave your ideal clients in overwhelm because you will lose them to someone who makes it easier to buy from, if you don’t streamline and package your services.
Pricing
Pricing is something that is very important to consider when you are productizing your services. I always like to keep a couple of things in mind.
- What are my goals?
- How am I going to get to my goals with the packages that I have?
- What is my goal for the year? What is my goal for the quarter?
Once you have that number and you understand what it is, you need to break it down. Let’s say my goal is $120,000 a year, and I need to sell a package at $1,000 a month. How many clients do I need in order to achieve that goal?
I like to reverse engineer that and figure out what that is, because that will determine how many clients I roughly need. So, I would roughly need 10 clients at $1,000 a month to be able to hit that $120,000 goal. That means I need to keep and retain 10 clients over the course of a year to achieve that goal. With those packages, 10 clients take up however many hours from a deliverable perspective, which is important to understand. If the middle package takes 10 hours and I have 10 hours of delivery on this package per 10 clients per month.
10 clients x 10 hours = 100 hours a month
That’s roughly 2,5 full weeks for me to do the delivery of that. Do I have enough time in my schedule to actually do that and stay sane? The answer is yes!
If you’re checking all these boxes along the way as you’re doing this, you know that you’ve priced your products accordingly. Another way to look at this is to say, “I want to hit X goal. It takes me X number of hours to get here, but I want to charge a rate of X.” Now, you don’t have to overtly say here’s what my rate is, but it’s important to understand roughly what you want to be earning per hour when it comes to the products and services that you’re offering. Ultimately as you grow your business, you want to know what your time is worth. For me, when I was running my agency, I knew with great specificity my time was worth X, and then my associates and my team members’ time was worth Y.
It was really easy for me to say, this is a task that I’m going to do. This is a task that someone on my team is going to do, and then I’m going to oversee it, etc…
However, oftentimes we don’t even look at this. The other day, I was working with a client and she said, “I’m thinking about doing a membership. I’m going to charge $25 a month, and I’m going to do voxer”. I asked her how much time per person that was going to take from a delivery perspective? That is really important to understand!
I don’t want you to create a program, a product, or a membership where you’re making $2, $5, $10 an hour. The goal for you being in business for yourself is to
- hit whatever financial goal you want
- create more freedom and have more time freedom and financial freedom and be wildly profitable.
Understanding how many hours go into the average package or the average service that you’re offering and what that deliverable looks like from a behind the scenes perspective, is key.
Inevitably, some clients will always take more, and some will always take less, but that’s the gamble that you take when you’re a service-based business. However, this is where streamlining your services come into play.
The more you streamline your services, the easier it is going to be to create a repeatable model that you can then use over and over and over again.
Simplicity
People love to buy, but they hate to be sold.
The simpler you can make your products, the simpler you can productize your services and the simpler you can make it for people to buy, the faster you’re going to be able to get traction and momentum with that product.
Simplicity is key!
At the end of the day, it is imperative for you to be able to take your offering and explain it to a third or fourth grader in a few sentences. If you can’t do that, you might need to rethink your offerings. If you can, great!. That’s where you can start to brand your products and really start bringing it to market and get that proof of concept.
- Get that viability, get that organic “yes, this is working!
If you have been following me for any period of time, you know that I truly believe that simplicity is super important and is key to being successful!
To learn more about productizing your services and really taking your service-based business to the next level, making a whole bunch of products that streamline your delivery, then download my simple guide here. You should be able to sit down and in under an hour, map out all your products and services for your business.
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