Productizing Your Way to a Predictable Income
Key points
- Productizing services can lead to a more predictable income stream for service providers.
- The challenge lies in delivering high-quality services consistantly, which requires to have a refind process in place.
- Constantly optimize your workflow, improve upon it, and reduce costs and work for your entire agency.
There’s a reason why Uber has gone from zero to billions in a few short years. They are the masters of productizing the delivery of a service to the point where there’s an entire industry being disrupted.
The cost is known upfront. You know exactly when an Uber will arrive. Reliability from drivers is almost guaranteed, and the comfort and experience is next to predictable.
Which begs the question, could you achieve predictable income in your business and see it take off?
What is predictable income?
Predictable revenue refers to income that usually stems from recurring revenue, for instance subscriptions or retainers. The predictable revenue model is popular among agencies and productized services because it makes it easier to scale, anticipate growth, and be prepared for it.
Why your service offering can’t be unpredictable
You might say that achieving predictability in a service-based business is tough. You’d be right, but it’s certainly not impossible.
Business is unpredictable by nature—on both sides.
Bringing in cash month after month and giving clients an identical experience is not a walk in the park. Especially when your product is generated by humans.
But, whether you like it or not, the only way to get to the top is to deliver predictable results. Every giant in business is proof of that fact.
Sam Walton once said:
“The two most important words I ever wrote were on that first Walmart sign: ‘Satisfaction Guaranteed.’ They’re still up there, and they have made all the difference.”
If what you want is predictable income and growth, it starts off by offering uniform and reliable value to each client you work with consistently.
Predictable revenue strategy and ideal customers
Most of us get started in business for the wrong reasons. Some start accepting every client that knocks on the door without thinking about their ideal customers. Others struggle to get them in the first place—without really thinking about who they want to work with.
Sure, you must know what you do. You must master the know-how. But it really starts with the who.
Until this is in place, business growth is an uphill battle.
Focusing on a market segment immediately reduces needs to a handful.
Things become more predictable and lead generation makes sense because you (and your sales team) know what to focus on. Building systems and processes becomes easier, and getting people to fit into the company is much more straightforward.
This gives your business direction while making your message stronger—something we all need in this distracted world if we want to command attention.
No one likes uncertainty
People want predictable results, predictable experiences. They also want a predictable price when possible.
This is where packaging your services (also known as the productization of services) comes in.
Think of productization as if you’re trying to package everything up in a little box—with a specific size, clear instructions, a clear value proposition backed by company values, and an expiration date—to sell it at a store.
The less ambiguity about what it is that you sell, the better.
Defining your “little box” content and instructions relates to establishing the results you promise to clients—as well as the turnaround time and deliverables.
This sets the foundation for providing the same benefits every time. Which is the first part of a predictable business equation.
“But what if clients want something different?” you may ask.
The answer? You should be very cautious of bending the rules for a particular client.
When you get inbound leads, you’re supposed to be the expert specializing in a niche, giving advice and delivering measurable results. Always evaluate if you’re talking to qualified leads and if you packaged the right services in the first place. After all, it’d be crazy for Kraft to manufacture personalized Macaroni & Cheese. And as Kenny Schumacher mentions in an interview with us, don’t waste time trying to make things too personalized in hope to convert prospects into clients. Bending your rules only for them to churn in a few weeks will not bring much revenue to your business.
Remember: the fact that you’re removing cost ambiguity and adding a layer of predictability to your offer enhances its perceived value.
People don’t like negative surprises. We’re wired to expect the same experience again and again, and that alone deserves a premium.
Delivering profitable & consistent quality at scale
Saying what you’ll deliver is one thing. Delivering great service again and again is another.
To deliver a fixed result on time, every time, you must have a well-defined process. This is probably the most important part, because it can make or break your business as you scale.
There are multiple business process management solutions available. I’ve heard people using all sorts of fancy stuff. But sometimes even a Google Document can cut it.
Implementing it and actually using it is what really matters.
Grow your industry knowledge
This also allows you—and your team—to make things faster, so you can optimize for profitability over time. It also makes training new people and planning painless.
If you come from a freelance, I-do-the-work background, it can be a challenge to implement a measurable, repeatable and predictable business process to transfer your knowledge to the people you hire.
But there’s simply no other way to do it. You need to learn the art of delegating.
Optimizing your workflows for growth
When it’s time to scale, you can’t solely rely on referrals. You need a predictable way of getting agency clients to your door.
MJ deMarco, author of Unscripted, talks about a concept called legacy value systems in his book—referring to the different ways in which you multiply yourself, so to speak.
This encompasses virtually anything—from a team to content to any other way of setting up a marketing system that promotes your business for you.
It’s not enough to have a system in place to deliver work.
If you get to that point, great. It means you can take a few weeks of vacation and probably your business won’t stop.
But things get exciting when you can take a few months of vacation and see your business grow instead. That’s when you know all the cogs of the machine are firmly in place.
If you’re dealing with one-off projects, this is a must to drive consistent revenue, and if your business’s revenue model is recurring, we can start talking about consistent growth.
How’s that for business?
Summary
Predictability in business is more likely when you package up the things that you can control—what you do, how you do it, and who you do it for.
This allows businesses to become more efficient, effective and productive, giving clients a crystal-clear offer—and their staff an easy-to-follow process.
All big companies have scaled and grown by a method of standardization.
Without question, when you’re able to promise—and deliver—a predictable outcome is when you start to see disproportionate business results.