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2019-05-29 (1)
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Productisation & Overdelivering - Growth Engine - The SuccessHub

By Mike Midgley Posted 9 October, 2018 In GrowthEngine Blog - Episode 83 - Productisation & Overdelivering

Productisation & Overdelivering - Introduction

In this Growth Engine daily video, I really want to talk to you about productising and over delivering. 

So I'm a big believer in productising everything. 

It doesn't matter how wild your services are as far as intangibles.

I believe you can productise or package everything.

I want to talk to you about the reasons why you should be considering that, the benefits of doing it, and also about the added value you can give. 

So it doesn't matter if you're a one-man consultant who just supplies services.

It doesn't matter if you're an obviously a larger organisation with a multi-tiered or affiliate-channelled structure.

Watch The ‘Productisation & Overdelivering ' Video

Productisation & Overdelivering - Why Productising Everything Is The Best Option For You

I believe that with the product, people can identify value better, so that's another reason why you should do that or a starting point of a reason why you should do that. 

So for those who have bricks and mortar stores where you can walk in and buy a product off the shelf, this is pretty straightforward stuff and an inventory system for you guys.

But for the people out there who, maybe let's say is a one-man consultant, bookkeeper, accountant, that would rather just trade my time for hours, but then you're always up against the price in sites like PeoplePerHour and Fiver.

Saw an interesting post on LinkedIn where people were saying, do are you competing against people who are fiver and I mean having time to cut? 

Well, a second benefit of productising your services is that they become unique. 

Then they can't be compared in any direct format.

Indirectly, an accountant for an accountant or a childminder for a childminder, yes. 

But indirectly, that's there, but directly they can't. 

Because if you create a product that is so unique that it builds up and bundles up, which we'll talk about in a moment, then you've got a discussion point and value to demonstrate. 

This is really, really important, guys. 

I want you to really hone in on this. 

So let's take a bookkeeper, for example, who's trading time for hours. 

I'm on your site eight hours, eight hours at X per hour, whatever that bookkeeper charges. 

The customers see, okay, I'm getting that person for so many hours and it's costing me so much money, that they're focused on the cost in return for a time as opposed to the value that you're actually providing. 

Productisation & Overdelivering - What Is Your Bronze, Silver Or Gold Package

So if you were to say, you know, we have we'll keep it very simple, just for example purposes, but if we had a gold, silver, and bronze package. 

So our bronze package includes so many hours on site, so much for setting up your system, so much for auditing your system, so much for entering invoices and taking them off or reconciling them, you get the picture.

You got to put a certain amount of services in which they equate to the hours. 

So instead of sort of giving it out, it'll take me roughly eight hours to roughly get you where you want to be which is totally intangible. 

The customer's thinking that's a cost. 

You could say our bronze package will cover these following services and that is the package price, not the hourly price that we will charge you to achieve that outcome or that output. 

Same for silver and gold, although naturally like anything that ascends up, silver is better than bronze.

So that would have more inclusions of services, and naturally a higher premium. 

Then gold would be your top package. 

Then again, more services at a premium over the silver. 

So if you can productise it, people can start to see it. 

People can start to see oh yeah, I'm actually paying a flat fee for that, it's all-inclusive. 

Then like, holidays, all-inclusive, I don't have any extras to pay, that peace of mind and reassurance comes in. 

So I really want you to think about productising from that side. 

The other great way of doing it is that you can then start to bundle, or splinter, and if you bundle let's say you've got ten products in your service range. 

So you may have a gold, silver, bronze package and then you might have a year-end, say I'm an accountant, for example, a year-end service.

A tax service. 

There is a pre-quoted. 

So nothing new here, like I say, 

I'm just sharing my thoughts. 

I've seen a couple of businesses recently who have tried to trade time for hours and wanted to get out of that sort of rat race and that hamster wheel. 

We did a little exercise around this that they really got a lot of value to sort of shape out what their products look like. 

For you guys out there who are shaking your head and saying this is basic stuff, and we're so custom it's unbelievable. 

We're so custom it'll never work for us. 

Let me share this story with you about a product called Valspar.

Now for you guys out there in the building trade, or decorating trade, or even some homeowners who've used it, Valspar is a specific type of paint. 

You go to B&Q and you go and mix any colour or a Johnstone Paint Centre or something like that, I'm not quite sure what the retailer is.

I know we've had it at B&Q before. 

But you can go and get any colour paint by talking a RAL code, an R-A-L code, or a hex code or a CMYK code in, they'll even scan a piece of paper if it's a clean enough one and mix it to that sort of shade.



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Productisation & Overdelivering - Do Not Settle For The Nearest Colour Paint

So if you've got corporate colours, you go into these centres, take your colour codes, or your paper scan they'll scan it and mix it exactly to that and again, if any of guys have been to the SuccessHub, you know we've got HubSpot orange, what was Infusionsoft green, we've got those old purple and reds and light blues in there which are all branded colours on our walls. 

So you know, we don't settle for nearest colour. 

We want the exact colour because we're specific about our brand. 

So back to the productisation, and the point that I raised around Valspar was for people who say I'm so custom there is no way that I can productise. 

Well, I'm telling you you're wrong. 

Here's why. 

Every time you go into a Valspar store, every single tub of paint on there is white.

You want the list, they all start with white. 

Then the colour mixing machine squirts in a specific colour, you know, mixes and then that gets shaken up and mixed and then it produces the exact colour.

Paint is paint. 

There may be better qualities of paint, there may be basic or cheaper versions or budget versions of paint. 

But paint is paint, it comes from mostly the same substance or raw materials. 

Then it's just the colour pigments that make that there.

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So you know, if you are so specialist you will always have a core delivery of services.

Whether that is custom dentistry, there are still teeth involved, okay? 

If you're doing event management, you're still providing tables and chairs and glasses and staff. 

They're the white paint, they're the core that you need to get your head around. 

Cause that's, you know, the basics from there.

So even with a fully customised solution, there will always be a baseline that you guys will deliver, whether it's a basic custom, super custom, personalised or non-personalised delivery. 

So I'm asking you to get your core basics down. 

Once you've got your core basics down, then you can start to sort of customise it out of there. 

Your gold, silver, bronze could be customised package one, customised package two, customised package three, and then take out a VIP upsell, or splinter bundle product then sorts of put some personalised initials or colour schemes or whatever you want to do up there. 

So that's all doable. 

Splintering allows you to sort of getting customers to try you before they buy you. 

So if you've got a product that delivers ten services, but the starting point of that says product or service A, in the product, then you can splinter that out. 

Credit where credit's due, but you know splintering isn't new, again, Ryan Deiss at Digital Marketing talks heavily about this. 

About splintering out of his trip wires. 

But if you were to say, the first part of your delivery is a consultation then why don't you splinter that out and either offer it free or even better, offer it at a small price. 

So instead of your big product being say 1000 or 10000 that splinter piece could be 500 or 50 or whatever piece. 

They can see what they like, they get a feel for you. 

It gives you an opportunity to demonstrate your expertise, and then I'm sure if you do a good job, your customer's going to have a better chance of converting with you.

Bundling, the enclosure on this, you know, if you've got two or three product services as I said earlier, you could put them together and make a super product. 

You know if there's repetition in those products.

Let's say you've got three separate products and in each three of those products you always have to do a set-up. 

Well if you do it all as one, you could then maybe reduce the time. 

Then if product A is one thousand pounds, and product B is two thousand pounds, and product C is five thousand pounds, the total is eight thousand. 

But if there's a repetition of set-up in there that's worth a thousand or fifteen hundred, you could actually discount that down and go to the market and say hey, if you bundle these together, we can actually offer you a leverage of price. 

Or you could give them part of the leverage in price and keep more as extra margin, which is really the smart thing to do. 

Share some of that saving with the customer, share some with your finance director or your finance or your profit and loss. 

Make a little bit more money out of doing the same job. 

So, not about ripping customers off, guys.

I'm just sort of talking about leveraging margins here and giving value to the customer at the same time where it's a win-win situation. 

So getting that productisation into your business, getting it mapping out, costing each element and then putting a price together, one, it helps your customers identify with you, especially if you're trading time for hours, two, it's really going to help you sort of deliver and demonstrate more value so you know, your competitive positions there. 

Three, it gives you options for splintering or bundling, and even if you're custom, you can still customise baseline products and then build your customisation up there to really ramp up the margins. 

If you're watching this on YouTube or the blog, you can always leave a comment below, cause I'm pretty sure this is a fairly long video. 

But see how you go with it. 

Ultimately, if we can help you sort of productise to help you get better in the marketplace we're happy to do that.

'Every businesses product or service line has core components that can be used to productise, then use the custom of bespoke features to cater for different client demands' - Mike Midgley

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About The Author
TSH - GE - EP83 -Blog header
Mike Midgley

Mike Midgley is an experienced entrepreneur and executive board professional with venture capital experience and a proven track record in high growth business strategies. Throughout his career, Mike has achieved successful six and seven-figure exits plus he has raised over £1.6m in Venture capital and franchised his businesses over 68 times. As a podcast Host, Keynote Speaker, Angel Investor, Executive Coach and Non-Executive Director, he provides a motivational ‘hands-on’ driven approach that is supported by an extensive skill set across the fundamental disciplines of business. Outside of his executive services, Mike still plays an active role as the a Growth Engine Architect within The SuccessHub's HubSpot Inbound Certified Partner Agency channel that supports High growth SME's and Mid Corporate / Enterprise clients. Mike is passionate about giving back to the community, he is an active Business Mentor for Doncaster Councils 100 Mentor Program, plus he contributes to the SuccessHub Community Program and Charitable work where he raises money for his favourite charity the NSPCC.