7 Growth Industries Your Small Business Can Leverage in the Future
Negotiating with Your Vendors and Suppliers During the COVID-19 Downturn

4 Ways to Turn Your Service into a Sellable Product

By Angela Bao
Aug. 24, 2020
How companies can turn the services they provide into products they can sell. (Photo credit): Gettyimages.com/barisonal

The pandemic has hit service businesses particularly hard—here’s how you can combat that downturn.

The COVID-19 pandemic has disrupted businesses of all kinds, but none more than service-based ones. Whether you’re a restaurant, hair salon, boutique gym, or a design agency, any business that requires person-to-person interaction has been hurting in the wake of social distancing and shelter-in-place mandates.

The solution, says John Warrillow, author and creator of The Value Builder System, is to turn your service into a product. “We've noticed that just as service companies have started to get hit by this COVID-19 pandemic, product companies are doing just fine in many cases—we are still buying products that help us meet a specific need,” Warrillow explains.

For example, stationary bike startup Peloton reported a 66 percent increase in sales during the pandemic period. People who would normally attend a boutique workout class or train with a personal trainer (both services) could no longer do so, thanks to the coronavirus. Instead, they looked into products that would solve that specific problem for them—which is why Peloton, which offers live streamed and on-demand workout classes that users can follow at home, appealed to this demographic.

Here are four tips on how you can turn your service into a sellable product.

1. Find a homogenous need and niche down

The first step to turning your service into a product, says Warrillow, is to “niche down.”

“Segment all of the customers you would typically service, and really ask yourself, who are you uniquely wired to serve?” he says. “So niche down, much more than you are probably comfortable doing…to a point where it feels uncomfortable.”

Warrillow acknowledges that it sounds counterintuitive to narrow down, rather than expand, your audience in such economically uncertain times. However, in order to create a product, you have to find a “homogenous need” among your niche segment.

“Look at the psychographics of your potential audience,” he suggests. “Look at the demographics—age, gender, income. Look at the firmographics if you're a business-to-business provider, in other words the industry you want to serve, the company size…whatever life stage people are at, as well as company life stage if you're selling to other businesses.”

Warrillow uses UI Audit as an example. Jane Portman, the creator of UI Audit, works as a user interface/user experience (UI/UX) consultant. Normally, she would hire out her service and charge by the hour for web evaluations, but instead, she has decided to turn that service into a product—the UI Audit, a PDF guide for founders and business owners to do their own basic UI/UX audit. However, instead of targeting this product to all potential website owners, Portman has chosen to focus on software-as-a-service (SaaS) companies.

“What she's done is looked at SaaS companies and other software providers as her micro niche—all of them do UI/UX experience design,” explains Warrillow. “And so she's taken that first step of really niching down, much more than she would ordinarily niche down when providing a typical service. But, again, the reason we've got to do that as service providers is because we have to find a homogeneous need, something that all of our target customers have in common.”

2. TVR—teachable, valuable, repeatable

How to determine your TVR solution

The next step, says Warrillow, is to determine your TVR—your teachable, valuable and repeatable solution. In order to have a sellable product, you need to be able to teach your employees to deliver on the productized service, so that you’re not the only person who is an expert in it. Valuable is self-explanatory—your customers view the product as something that they want or need. “In other words, what’s the thing that you provide [that] is truly differentiated?” he elaborates.

However, the “repeatable” part is arguably the most important. Find an aspect of your service that not only is unique to your business, but something that can be turned into a “repeat purchase.”

The best way to start figuring out your productized service is to physically write down all the services you provide and score them based on the TVR system. “Write down all of the services that you provide today—all the different, discrete, unique services you provide—and then score them on the degree to which they are teachable to employees, valuable to customers and repeatable, meaning consumers have a repeatable need for them,” says Warrillow. Then score those services out of 10 on each of the TVR aspects, for a total possible score of 30.

“Then identify which of your services is the highest scoring, and that’s probably where you’re going to find the raw material for productizing your service,” he concludes.

BREX
A Smart Corporate Card For Your Business
  • No Personal Guarantee
  • Higher Limits
  • Build Business Credit
Earn 20,000 bonus points when you sign up with promo code REACHFURTHER. Brex is a separate entity not aliated with East West Bank. All applications and rates are subject to Brex’s underwriting and credit approval. Terms and conditions apply. More Info

3. Preempt your customers’ objections

“Whether you know it or not, you have the luxury of preempting objections,” states Warrillow.

When you’re talking face-to-face with a customer or potential customer, it’s much easier to see what they like and don’t like about the services you offer, and then negotiate with them or customize an offering. However, by productizing your service, you’re less able to do that, since you have to market it like a product by publishing a price and what your product offers (the “ingredients”).

“As a result, you’ve got to preempt those objections, and you do that through an FAQ,” Warrillow says. “In other words, you try to think of all the potential objections your customers have…and you’d want to preemptively address those in your marketing material.”

As an example, Warrillow uses car-cleaning service company Spiffy, which launched an online store for the sale of their vehicle disinfectants targeted at consumers looking to self-disinfect their cars during the COVID-19 pandemic. “The four most common objections (to the disinfectant) are: Is it guaranteed? Are you insured? Who are the technicians? And what’s the damage to the environment from the chemicals?” says Warrillow. “Well, guess what—Spiffy has preemptively addressed all four of those questions in their product literature.”

"What you want to do in lieu of having that natural scarcity…you need to make it clear that not everybody can buy your product or service—there is a finite number of units available, and you could do that by putting limits on how many people can buy your productized service."

-John Warrillow

(Photo credit): Gettyimages.com/winhorse

4. Create demand by showing scarcity

When you’re running a service-based business, the number of customers you can have is naturally limited by your ability to accommodate them. That scarcity helps motivate customers into committing to a purchase, due to FOMO—the fear of missing out. Although FOMO is frequently tied to the effects of social media, it also strongly influences consumer behavior: According to a study, 60 percent of millennials “make a reactive purchase after experiencing FOMO,” which means this can be a useful marketing tool.

“You’ve heard that before, I’m sure, that customers are much more motivated by missing out on something than [by] attaining something,” says Warrillow. “That’s one of the beauties of offering a service—you have that built-in ability to say, no, I don’t have time, and that elevates the customer’s appetite for purchasing.”

However, as a product provider, you don’t have that natural scarcity to help create demand, so it’s up to you to create it. Some e-commerce sites will notify customers how many units of a product are left after the customer adds it to their cart, to help push them to complete a sale. But you can create scarcity in a number of different ways, whether by limiting the number of units available in a certain time frame, or by creating exclusivity by only reaching out to a select segment of your customer base.

“What you want to do in lieu of having that natural scarcity…you need to make it clear that not everybody can buy your product or service—there is a finite number of units available, and you could do that by putting limits on how many people can buy your productized service,” suggests Warrillow.

For more tips go to our business continuity toolkit with the latest resources on how to deal with the pandemic

About
Reach.Further


Reach Further by East West Bank is our business news magazine connecting you to emerging opportunities in the United States and Greater China, helping you gain the edge to succeed.

Discover stories from the frontlines of entrepreneurial life, financial tips for small and midsize businesses, and in-depth insights on US-China business, trade, tech, innovation, entertainment, lifestyle and more.

2018 Best Digital Publication

Finalist in the prestigious

Content Marketing Awards.

Stay Connected!

We’ll keep you in the know about the latest US-China business news and trends.

Follow us:

Questions? Email us:

reachfurther@eastwestbank.com