SBX17 – How To Productize Your Service And Get Paid Faster

Are you a service professional having a hard time getting paid by your customers?  Is cash flow always an issue?

This is something that plagues many freelancers and service professionals. Getting paid on time. You can have a successful business and still get into lots of financial trouble because you’re getting paid so slow after you produce the work and you start running into cash flow problems. On top of that, you spend valuable time chasing after payments when you should be spending that time getting new business or servicing the ones you already have

Turning your service into a product is one way to not only get paid faster (people pay for products up front, services after they are delivered), but to streamline how you deliver your services.

In this episode of The Small Biz Express podcast we discuss:

• The plight of freelancers and service professionals, getting paid on time
• How you present your service to your customer will determine when you get paid
• Why giving your customers too many choices can lead to more dissatisfaction
• How creating a systematic approach can streamline your delivery and make you more money
• Mike talks about a great 2003 study about online retailers and pricing
• How to package and present your product to your customers
• Gary’s own example of how he turned a service into a product
• Pricing strategies and if you should present your pricing upfront

Action Steps from this episode:

1. Turn your service into a product.  The easiest way to do that is by taking your individual service and packaging it with standard pricing, including a pre-formed list of features and options and a set time for delivering the product. If you package it like that, it looks more like product than a service. limit the choices, standardize the pricing and feature set, package it neatly on your brochures and website. The key is not making it where the client is free to take the service in any direction they choose, give them limited choice for a package, if u need more choices, create more packages.

2. Take a systematic approach to delivering on your product.  Create a process from the work you do.  Don’t try and be everything to everybody.  Take a methodical approach to delivering your work, a step by step process you follow until the project is complete.  With a productized service, you should be able to deliver faster and more efficiently each time you do it.  Your customers can’t derail you with revision after revision, until you’re starting back at square one.  A written plan is essential to delivering efficiently and for training others on executing the system you’ve created for delivering your new product.

3. How to pitch your new package to clients.  #1 thing is to change your vocabulary. Start refering to it as a product, banks do this all the time when talking about loans, they call it a product, even though it’s a service. Start using language like, “when you purchase package A, you’ll get this….” See, you’re implying they will be buying it before any work will be done. It may sound silly, but if you read consumer phychology, like Dan Airielly’s book, Predictably Irrational, you’ll see how even the slightest changes in presentation can cause massive changes in behaviour. To get an idea, just look just look at headlines….marketers test headlines all the time, they test 2 headlines…headline 2 outperforms headline one by a margin of 10 to 1, by only changing 2 words in the title. Happens all the time.

Links and Resources Discussed in this Episode

1. Built To Sell – Great book that tells the story of the owner of a design company who needs to free his company from the traps many service companies get into so he can sell his business.

2. Why I Chose “Service As A Service”, a startup chat with Dan Norris of WP Curve

3. Can Online Retailers Benefit From Comparison Pricing? – Article that discusses the benefits of transparent pricing strategies

4. Shanora Networks – A nice example of using graphics to explain a systematized process to customers

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