Productizing a Service Business?

Productizing a Service Business?

There’s this holy grail in the location independent entrepreneur movement. It’s developing a product. Something that sells over and over and over again after developing it once. This is where passive income can be realized.

Much like book writing used to be, once you’re published the money keeps rolling in for a couple years allowing you to write your next masterpiece as you see fit.

But a lot of us location independent entrepreneurs follow a path to get there. Typically we start our dreams working for the man. I wished I was smarter when I started out of college (shoot even before that) but I didn’t have the exposure to business that would have given me the insights I have today.

When we’re working for the man we start exploring how to break free, how to spread our wings. The ultimate goal even if we cannot state it is to have a product, to have “stable” revenue coming in while we take a week off to go scuba diving.

However something comes in there, almost devilish like that tempts us with the sweet candy of money. That devil? Service, also known as Consulting.

Service Business

There’s a lot of good that can be said about the service business/consulting gig. First you get to know your clients and customers really well, you get to make some really good money (remember that devilish candy?) and you get the benefits of running your own business while choosing your location.

The negatives of a service business are all too familiar to me currently.

  • Instead of one boss you have 14 bosses all who innately demand priority (It’s not their fault!)
  • Stop working, stop getting paid (You’re trading hours for dollars)
  • Reinventing the wheel every time
  • Convincing a new client to buy from you is akin to selling your body, it becomes soul crushing

productized service

Productize Your Service

So the next step, the natural progression is to develop a product from your service based business, aka productize your service. This solves a couple pain points, first the selling is much easier, it’s a system with a proven track record that they’re buying, not your mind/body. Second the productized service allows more outsourcing of the actual work so you can scuba dive.

Essentially without writing code or doing a CAD of your physical product you’re developing a product of someone elses time and selling that in a repeatable, predictable way.

I’ve tried this.

Developing the product offering was easy.

But I got the target wrong, or the product/market fit was wrong. See it here for yourself. It’s a sweet idea that has the potential for greatness. However it hasn’t sold well yet.

So do I develop another productized service?

Or do I skip that step and go right to a product?

I’ve been reading some insight into a rising star in the productized service business model about lifetime value of the client being increased by the utility of the product you offer. An example of productized service with high utility is website hosting. You just need it and you need it every month. Whereas website design you need infrequently and it’s a bit more of a luxury and commodity at the same time. Not a great space to play in when looking at the lifetime value of the client.

So what product or productized service can I develop?

Typically I’m like the cobbler who’s kids go shoeless. I can help others develop great product and productized service ideas, but it’s like I’m too close to the service in my own business to step back and see the product right in front of me. Real quick here’s my brain dump of issues/potentials based on the services Connex currently offers

Services to Productize

  • SEO
    • The market is flooded with service providers, tools, and productized services
    • Productized services have deservedly gotten a bad rap in this industry
    • To do SEO right it needs to be custom, I could not live with myself doing anything else
  • Social Media
    • Again a flooded market with service providers, tools and productized services
    • Again to do it right it needs to be custom, I could not live with myself doing anything less
  • Online Ads
    • Plenty of tools, great service providers and a couple of productized services.
    • Market still seems flooded
  • Email Marketing
    • Market is flooded with tools and service providers. I don’t know of many productized services here
    • This has potential. We offer a service where we increase open rates through segmentation and list reactivation
    • Content generation here is flooded
    • The tools all offer Conversion Rate Optimization functions.
  • Data Analysis
    • People have tried to develop a productized service here (visual.ly and Quill Engage are the two best ones) but the problem cannot be solved through a simple repeatable process
    • To be honest, helpful and thorough it’s more service than product.
    • Could sell weekly or monthly analysis reports, but it’s still a service
    • Hard to sell because there’s very little need for it. Businesses run well without looking at their online data all the time. Those that need to pay close attention (ecommerce) already do in house.
  • Conversion Rate Optimization
    • A lot of tools, some service providers but very few productized services.
    • Too custom, too much service based not enough product.

What about you? what productized service will you be developing or what would you be interested in buying?

 

 

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Laymen’s Guide to the Kolbe Score

I was looking for a definitive explainer or a guide to the Kolbe Score and I couldn’t find one, mostly because consultants make a lot of money explaining how the kolbe works and they are old skool in that they don’t want to give away the information that they consult with.

And mind you I’m very un-trained in the Kolbe score reading land, but this is a layman’s explainer for how to use a Kolbe score (specifically in teams).

First off, a Kolbe score shows your instincts, your natural desires of how to act. This isn’t Myers Briggs’ “are you an Extrovert or Introvert?” It’s more of a how well do you work with teammates to get things done?

It’s also a holistic view of people, we all need to work on areas that are not our strengths. Instead of an excuse for laziness (well my Kolbe score says I’m no good at doing it that way) see it as more of a prediction of where problem areas lie between two individuals.

Kolbe scores on 4 modes, Fact Finder, Follow Thru, Quickstart and Implementor.

Fact Finder

This is your propensity to seek out information before acting, or before making a decision. Are you more likely to read a recipe, watch a video, and witness a demonstration before cooking a new dish? Or are you more likely to read the ingredients, see a picture and go from there?

Follow Thru

Are you a systems creator, or a person who bypasses the system to get the task done? Those who score high here are able to document processes and develop repeatable systems. Those who score low here adapt to find ways to accomplish the tasks through multitasking or other shortcuts

Quickstart

This describes your propensity to do stuff without knowing the outcome. Typically a high quickstart person will be heard saying stuff like “I don’t know, let’s just try something” They are an experimenter. Those who score low here will want to stick with tried and true plans. Middle of the road will check things out before trying them.

Implementor

We’re all Implementors in a non-physical sense. But this Kolbe measurement measures how we work with physical space, do we work with our hands to create something physical? Those who score low here can see things, they can understand how physical objects work together. Those who score high here can create physical solutions to problems.
Now that you know what all four of the modes are what are these predicting?

First off there’s a 9 point scale in each, the lowest you can score is 1, the highest is 9. In one area, say for example Quickstart, a 1, 2 or 3 will push back when they are in a situation where they need to do something that hasn’t been proven to work. a 4, 5 or 6 will be middle of the road, they can fluctuate and operate well with a proven plan or without by trying some new stuff. A 7, 8 or 9 will feel like the lifeblood is being sucked out of them if they need to repeat a proven process without any experimentation.

So the key is knowing which of the 4 you are in the high, middle or low sections and seeing how that blends with other teammates.

Real life example, I’m currently a 5-4-9-2 Which means I’m a middle of the road Fact Finder and Follow Thru, I enjoy getting more information, but can take action without all of the information. I also can create systems, but I have a greater tendency to develop a shortcut, or multitask to get things done.

I’m a high quickstart, almost off the charts :) which means I like trying new ways of doing things just because. For example my commute home, I’ve tried over a dozen different ways, and will frequently change up for no apparent reason, just because I wanted to test a theory.

I’m a very low Implementor, which means I have difficulty working with my hands to create solutions. I would be a terrible mechanic. In the scene from Apollo 13 where they dump out the parts and say build a solution — I’d be the guy at the white board drawing a solution (I can picture it) versus actually taping together parts to make a solution.

Great so now you know more about me, my strengths and weaknesses, but so what? Well, lets look at where conflict might occur.

Kolbe Score on Conflict

Fact Finder and Follow Thru, I’m middle of the road and so I work will with folks who are either high or low in both, the only potential issue is with someone who is a 9 in Follow Thru (I’m a 4) I might struggle with always having to do the system, the repeatable task.

Quick Start, I will cause someone with a low quickstart (1, 2 or 3) anxiety. As I’m not sticking to the plan, to the proven track record, I’m always out there trying new things, doing things different just because. Conversely I’ll get frustrated with a low quick start for not trying new things, for not experimenting and just doing something because its “the way its always been done”.

Implementor, I will actually block a high implementor from working with their hands because I’m (naturally) so opposed to doing stuff with my hands, I may end up wanting to draw it out, or wanting them to explain it to me without using objects or something like that. Whereas the high implementor wants to build it, put it together physically.

Like I said in the beginning the Kolbe is not an excuse for laziness, just more of a helpful tool in predicting and explaining inter-personal relational difficulties or successes.

Oh and yes kolbe scores change over time, I used to be a 7-6-5-3 and now I’m a 5-4-9-2 which means I’ve moved into a more experimental phase in my life, wanting to operate out of trying new things more than finding all of the information (high fact finder). I’ve also lowered my system building tendency and my tendency to work with my hands in the physical space.

So where do you see yourself? High, Medium or Low in the four modes?