In today's fast-paced and competitive business landscape, service-based businesses constantly seek ways to differentiate themselves from their competitors and increase their revenue. One strategy that has gained popularity in recent years is turning services into products. In this way, businesses can improve their scalability, consistency, branding, and competitive advantage by packaging services into products.
Whether you are a small business owner or a CEO of a large enterprise, this article will provide valuable insights on leveraging productization to grow your business.
Why turn your services into products?
There are several reasons why service-based businesses may choose to turn their services into products:
Scalability: By turning services into products, businesses can increase their scalability by selling the same product multiple times without allocating additional resources to each sale. This allows companies to grow their revenue without expanding their team or infrastructure.
Consistency: By turning services into products, businesses can ensure consistency in their delivery, increasing customer satisfaction and loyalty. Customers will know what to expect when they purchase a product, and the company can guarantee that each customer will receive the same level of service.
Branding: Products can help businesses establish a recognizable brand. Customers can associate a product with a particular company and its values, making it easier for businesses to market themselves and build a loyal customer base.
Competitive advantage: Products can give businesses a competitive advantage over their competitors who offer only services. By providing a product that solves a customer problem, companies can differentiate themselves and attract customers who are looking for a specific solution.
Increased revenue: Products often have a higher profit margin than services, as businesses can charge more for a product that can be sold multiple times. This can lead to increased revenue and profitability for the company.
Here are some steps to consider when turning your service offering into a product.
Step 1 - Niche down - the 'who'
Niche down is the process of specializing in a specific area or market segment rather than trying to serve a broad range of customers. Service businesses that niche down can benefit from targeted marketing, expertise and differentiation, higher prices, streamlined operations, and improved customer satisfaction. By focusing on a niche, service businesses can tailor their marketing efforts, become experts in their chosen area, command higher prices, streamline their operations, and provide more personalized service, resulting in increased profitability and customer loyalty.
Products are typically relatable to specific customers. Therefore, if you niche down to a particular target market and find a way to solve their biggest problem, it will help you identify and provide a solution. Staying focused will help you get the best return on your investment, especially when working with limited resources - time & money.
Step 2 - Find your most valuable service
To rank your most valuable service, you can conduct the following exercise.
Make a list of all the services your business offers.
Analyze each service and identify the key metrics that determine its value. For example, consider the revenue generated by the service, the cost of delivering the service, the level of customer satisfaction, or the growth potential.
Assign a weight to each metric based on its importance. For example, if revenue is the most critical metric, it might be assigned a weight of 50%, customer satisfaction might be given a weight of 30%, and growth potential might be given a weight of 20%.
Rank each service based on its performance in each metric, using a scale of 1 to 10 (or any other relevant scale).
Multiply the score for each metric by its assigned weight and add the results for each service to get a final score.
Rank the services based on their final scores, with the highest-scoring service being the most valuable.
By conducting this exercise, you can better understand which services are most valuable to your business and focus your efforts on optimizing and promoting those services to increase revenue and profitability.
Step 3 - Be clear on the benefits - the why
The quote "people don't want to buy a quarter-inch drill. They want a quarter-inch hole" means that customers are not necessarily interested in the product itself but rather in the outcome or benefit that the product provides. In this case, customers do not actually want to buy a drill, but they want a hole in a specific size (in this case, a quarter-inch hole).
The quote highlights the importance of focusing on the benefits or solutions that a product provides rather than just the features of the product. By understanding the desired outcome or benefit customers want, businesses can better tailor their products and marketing efforts to meet those needs and ultimately provide more value.
Step 4 - What are you selling? List the ingredients - the what
In today's digital-first economy, service-based businesses need to list their offerings publicly in a clear and accessible way.
Just like a list of ingredients on a food product in the grocery store provides information about what is included in the package and helps the consumer make the right decisions, so do your offerings provide information to your customers. That doesn't mean you need to give about your 'secret recipe' to everyone who stops by your website, but you need to provide enough information to help them decide if your offering is worth investigating further.
Here are some reasons why:
Increased visibility - By listing their offerings publicly, service-based businesses can increase their visibility and reach a larger audience. This can help them to attract new customers and generate more leads.
Transparency - Publicly listing offerings can provide a sense of openness and trust to potential customers, as they can see exactly what services are offered, what they entail, and how much they cost.
Improved customer experience - Providing clear and detailed information about offerings can help ensure customers have a positive experience with the business. It can also help to reduce customer inquiries and confusion, leading to more efficient communication and fewer misunderstandings.
Competitive advantage - In a crowded marketplace, businesses that list their offerings publicly can differentiate themselves from competitors that do not provide this information. It can also help them to showcase their expertise and unique value proposition.
SEO benefits - Listing offerings publicly on a website or other digital platform can improve search engine optimization (SEO), making it easier for potential customers to find the business online.
Publicly listing offerings is essential for service-based businesses in today's digital-first economy. By providing clear, detailed information about their services, companies can increase visibility, build trust, improve customer experience, gain a competitive advantage, and enhance their online presence.
Step 5 - Brand it!
The main difference between branding a product and branding a service is the nature of the offering. A product is a tangible item that customers can physically see, touch, and feel, while a service is an intangible experience that customers cannot physically touch.
By turning your service into a product, you can visualize and enrich the experience of your service offering to better connect with your customers. The following are some ways product branding tips;
Tangibility -As products are tangible, their branding can be more visually focused, highlighting the physical features and benefits of the product. On the other hand, branding a service often requires a more emotional and experiential approach that focuses on creating a connection with customers.
Durability - Products are often designed to last for a specific period, while services are consumed and completed at a particular time. This means that branding a product can focus on the durability of the product and the longevity of the benefits it provides while branding a service needs to focus on delivering a positive experience each time.
Customization - Products can be mass-produced with a slight variation, while services are often customized to meet each customer's unique needs and preferences. Branding a service, therefore, requires a more personalized approach that focuses on delivering a unique experience for each customer.
Pricing - Products are often priced based on the cost of production and the value provided to the customer, while services are priced based on the time and effort required to deliver the service. Branding a product often involves emphasizing the value and quality of the product, while branding a service requires highlighting the expertise and personalized attention provided by the service provider.