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Brutally Honest Advice About Productized Services in 14 Minutes
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If I had to start over, I'd never offer custom services again. In this video, I'm going to be breaking down 16 brutal truths and lessons about productized services after mentoring 800 plus agency owners that I wish I had learned sooner. So, here's 16 things I wish I knew sooner that will make your journey easier as you escape custom services for the wonderful world of productized profits. Number one, I thought productized services meant done for you execution, like design services or content. The first time I heard of productized services was WP Curve, which was $99 a month for unlimited WordPress support. Then really popularized was Design Pickle, which was a few hundred bucks a month for unlimited creative tasks. Again, simple creative assets like banners and flyers and stuff like that. A turning point for me was when I realized that I could actually package my thinking, my process into done with you trainings, workshops that could be delivered in 90 minutes, 2 hours, 2 days, or even digital products, courses, and training that could either be executed by someone else like a client or a team member, or delivered in a a workshop-like environment where it was done with you, done together. So the lesson here is that you can actually productize more than services. Your expertise is scalable, not just your labor. Number two, in the beginning, I knew my offer was great because our clients were getting results. They were telling their friends. The problem was nobody else outside of who they told knew that I existed. So it was a real big turning point for me when I started building my own authority through releasing weekly YouTube videos andor writing my unique points of view and sharing insights on my email newsletter and my primary platform of choice at the time which was Facebook. It was the sharing of those insights that allowed me to collaborate with other people to expand my audience but also get introduced to my content because I was out there sharing and publishing my point of view. So the lesson here for productized service owners is that distribution is the most important lever that you have. The best product will lose to someone who has better distribution every single time. Number three, many agency owners that we talk to and you know when people come into our world and we start working with them inside of our programs, they're in a situation where clients are leaving faster than they can replace them. When I realized that I needed consistent marketing, the turning point was because of that authority building that I had been doing, I realized that I needed more consistent marketing oftent times just to break even bringing in the amount of clients that were actually also turnurning out at the same time. So the lesson here for productized services in the marketing and creative space if you're truly a productized service. Really in most businesses, you will need to always outrun your churn with marketing. You're not just selling, you're outselling churn every single month. Number four, so many people that are interested in productized services and the ones that advocate for productized services, at least many of them that I see on YouTube, brag about recurring revenue as one of the primary benefits of productizing your service. And in fact, it's why I see a lot of people choose to productize their service because they think that by productizing that they're not going to have to worry about marketing as much because clients will stay forever. But we talked about churn. But the reality is they're still experiencing clients dropping off. The turning point for me was when I started tracking churn, lifetime value, and the retention of different cohorts that we were enrolling into our service instead of just monthly churn. The real lesson here is that MR in productized services in most cases is a lie. And when I say a lie, what I mean is it's really more of a vanity metric than anything else. Especially because clients are going to be leaving pretty frequently inside of a productized service, whether that's month three to month six, which is pretty common for most marketing and creative related productized services. Number five, whether it's early days of my business or many of the clients that we've had the opportunity to coach and mentor over the years, the cheapest clients were always the neediest and they also were the ones that left the fastest. So, when I started raising my pricing, taking fewer clients, I had better retention and higher profit. Just because you're productizing your service doesn't mean you need to have something that is super low price, which we're going to be talking about a little bit later. So, the lesson here is that low prices often attract high churn. So, cheap clients cost the most. Number six, like most service providers that come into our world, you probably have been in a point in your business where you feel like you had to be involved in every single project for it to succeed. Once I built a repeatable framework, a repeatable process that others on my team could follow. I was the person that every client needed because everything was in my head. I knew how to do everything. So the lesson here is if you want to productize, the real pathway to a business running more smoothly without you or at least the minimum amount of you is that you need to create a framework because frameworks are greater than you. If it depends upon you, literally you as the founder, it's not scalable. It's extremely fragile. Number seven, pretty much every single service provider will resonate with this is trying to serve everyone and thus resonating with no one. Once I got clear on who my niche was, and by niche I mean who I serve, what problem I solve for that person and specifically how I solve that problem, I would take anything that I could get. I'd get a client. I'd go into project delivery. That project would stop. I'd come out, pick my head up, and I'd be like, "Oh my god, where's the next lead coming from?" And I'd be so desperate because I wasn't doing any marketing. I wasn't trying to attract anybody that I would have to take whatever opportunity came my way. That was also custom. So it kept kind of facilitating this flywheel of like being desperate and having to take projects just for money. So getting clear on your niche, who you serve, what problem you solve, and your how is going to be a catalyst. So the lesson here is that specializing is a non-negotiable. Specificity will be more scalable while vagueness will stall you out. Number eight, again, many service providers expect clients to stick around forever just because they created a productized service. I accepted the fact that many clients, especially early on while I was trying to figure out my service, would leave after 3 to 6 months because they got what they came for. Now, this obviously varies very much depending upon what your service is and the value of the deliverables and things that you have productized. So we have seen productized services where people stay for over a year. But if you look at most agency services and specifically productized services around marketing deliverables, creative assets, they're going to churn somewhere between months three and month six for most businesses. Again, there is exceptions to the rule. So the brutal lesson is even though you've productized your business, you're still likely going to have higher churn. And so you need to manage it intentionally. Churn isn't always failure. It's part of a model where they come and they got what they came for. So, you have to plan around for it. Number nine, many services and agents that come to us, they have really big ticket items like quoting a $45,000 package and that scared people off. And what was interesting is I had an interview on this channel with Hunter Hammonds who's created a handful of productized services behind people like Ali Abdal and Sahil Bloom. He even shared that he hit a point where he realized that that 45K package was scaring too many people off and made the sales process more friction. So he switched to monthly pricing with a 3month expected duration. So a three-month commitment. So it was $15,000 per month for 3 months and then it would go monthtomonth. And that was for his high-end design service which is like a premium version of unlimited design. But again, even in this interview, he talks about how some people will stay for month four and month five, but when they're coming for a specific thing, which most people are, a website or logos or new brand or a bunch of assets, there is a finite time in how long it's going to take to deliver that. And so, the lesson here is that if you've been packaging things up into this one big offer, it might benefit you to leverage into the sales psychology of just a three-month commitment with monthly pricing. So, how you frame pricing changes how fast people will buy. Number 10, because of services like WP Curve and Design Pickle and and all of those. I thought early on that productize just equaled unlimited design subscription or unlimited deliverable subscription. What I really realized was it's about fixed price for fixed outcomes no matter the delivery style. So when you are creating a productized service of your own, whether it's strategic productized consulting or deliverables like a creative service, it's not just unlimited. Unlimited is a tactic. Productization is a model. Number 11. I like many service providers thought that productizing meant remove all chaos from business. I realized that at the end of the day, a productized service business is still a service business. You're still in a service. It's just more of a structured one. The lesson here is that if you got into productized services because of recurring revenue and it being more passive, recurring revenue does not equal passive income. Productiz does not equal passive. You still have to show up and serve because it's a service business. Number 12. Most agencies and services, myself included, in the beginning, required a custom proposal, which usually led to some sort of back and forth sales cycle that sometimes could be dragged out for way too long. Once I packaged my offer into a clear, easy to buy, easy to sell, easy to deliver solution, sales started happening a whole lot easier. So the lesson here is productizing does make getting clients a whole lot easier. If it's hard to buy, it's always going to be hard to sell. Number 13. I set my price in the early days and I left it alone for far too long and revenue flatlined. Once I started adjusting and playing and testing pricing based on things like the information that I got about churn retention and the value of each and every client, things started to change inside of my business. So, the lesson here is that pricing and LTV will require ongoing tuning and optimization. Pricing is not a one-time decision. It's an optimization lever that happens ongoing. Pricing is a living, breathing thing. Number 14. Like many that go to productized services, they expect that the client will show up to their sales page, scroll down, see the different packages, and just click buy now and commit. The reality is, I've seen that not to be true more times than it has been, right? So, I added a simple call with a filtering process to ensure that I was talking to the right people, and that led to way more sales and way more income in my pocket. If you are productizing in the hopes of now I don't need to have a sales call or people will just click and buy without me talking to them. I think you are very far gone. You still need a sales process. Selling outcomes still requires trust and trust still requires a process. Now if your marketing is amazing, you can probably get away with driving people to a sales page. But after doing this over, you know, 800 times with 800 clients, most people need to build the skill of being good at marketing so that their marketing is building enough trust that people will buy from a sales page without a sales conversation. But in the early days, you're going to need a sales conversation. Number 15, you think productizing means you will escape client chaos. You productizing is the beginning, right? It makes getting clients easier. It wasn't until I really built systems for the operational side of the business, for the delivery side of the business, for client support and client management that actually unlocked my time freedom. So, the brutal lesson here is that it's still a service, right? It's still a service business. It will just run smoother when you have the right systems in place, not because it's productized. Number 16. The problem with most creative services, which this one will sting for you a little bit, is you want to get better at your craft. We all do, right? We want to be masters of our craft. That's how we got into this game in the first place. But the problem is that while trying to continually get better at your craft, you ignore the business side, pricing, operations, acquisition, sales. I started treating creativity as a skill inside my business. My craft was treated as a skill inside the business, not the business itself. So, the lesson here is most creatives actually suck at business. It's not a skill that you have naturally. You don't need to be a better designer or necessarily better at your craft. The skills you need to acquire and hone are your business skills. Now, if any of this hit a little too close to home, I totally get it. I was deep in custom service burnout myself, but I found a way out and I documented exactly how I did it. So, click on the video here or the link in the description to watch how I went about escaping custom services and built a business that actually works with the minimum amount of Me.
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