How To Turn Your Service Into A Product And Why

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Tuesday, 9.02pm

Sheffield, U.K.

We have our factory, which is called a stage. We make a product, we color it, we title it and we ship it out in cans. – Cary Grant

You learn a lot just by talking to other people.

It’s such a natural thing to do that we often miss just how much is going on.

But there is a lot that goes into sending a message from one person to another and, as a result, a lot that can go wrong.

Which is why selling services is quite a hard thing to do.

When I talk about services I’m thinking particularly of the things that you find hard to explain right now.

And they’re hard to explain because they might be complex or fuzzy.

If you need to take the time to explain it or solve a problem for a client – then you need to bill for that time.

If you need to provide more service you’ll need to add people with the knowledge to provide that service.

That’s the way a law firm works, for example. They are experts in a particular area and you pay for their expertise in a complex area that you couldn’t manage yourself.

But the problem is that most service businesses make for lousy business models, if you think of them on a time and person basis.

And, if you do something that isn’t already a well known profession, you’ll struggle to explain what you do.

Unless you try and turn it into a product.

The main difference between a product and a service is that a product comes in a box.

Not literally a box, of course, but one that people can visualise and understand.

Describing what you do is then simply a matter of listing what your customer gets from you.

Take the business of financial modelling, for example.

I could tell you that I can help you automate business processes using Excel.

That’s a service. You could employ me and pay me on an hourly basis to work for you.

Or I could tell you that I have an Excel worksheet for a hundred bucks that will help you produce invoices.

You won’t need to pay ongoing subscription charges and it will save you hundreds in bookkeeping and accounting costs – paying for itself in a couple of months.

One description is fuzzy and the other is focused.

You can clearly make money from both.

The service proposition could make thousands with a client who gets what you’re trying to do.

But so could the product – because you could sell a lot more to clients who needed that product.

So why would you choose one over the other?

As always, there is no one correct answer.

Products are easier to understand and buy – so you have a better chance of making a sale to a new prospect if you offer them a product.

Once they know you and understand that you can solve more problems, then they might want your time and expertise as a service.

The thing is when you sell time you run out of supply pretty quickly and also find yourself resenting the hours you’re having to provide.

So even though you could provide a service focusing on products means that you’re selling quantity rather than time.

But these days the only sensible way to do it is to use technology rather than relying on people.

If your product scales by adding people at some point you’ll run into an overheads problem where you need to bring in so much cash to cover fixed costs that it starts getting pretty stressful.

The main point here is that you need to consider your product/service mix as part of your strategy to develop your business.

If you are too much of one or the other – you need to ask yourself whether that’s working for you.

If it is, then don’t change.

If it isn’t, then it’s worth trying to see if you could do better by marketing yourself in the opposite way.

Or, just being practical, using whichever pitch is the one the person in front of you is responding to best.

Cheers,

Karthik Suresh

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