With nearly 80 per cent of UK jobs in the service sector, trading time for money is a common theme, says Tim Johnson, author of The Authority Guide to Meaningful Success.
How many times have you worried about the meter ticking away on your accountant’s or lawyer’s hourly rates? This is not an efficient way of working. It encourages mission creep, complacency and even laziness. This in turn affects productivity. According to Deloitte, slow productivity growth is one of the biggest topics shaping current economic discourse.
While weak productivity is a global phenomenon, international comparisons suggest that it is a particularly acute problem for the UK. For example, British workers are less productive than the French by a third. As a result, the average French worker could stop work on Thursday afternoon and still produce as much as the average British employee does in a week.
Trading time for money is not only bad news for customers but it’s not a great business model for suppliers either. There are only so many billable hours, and there is a limit to what price the market will bear. Fundamentally it’s not a scalable model.
So what can you do?
In short: create products out of services, introduce a one-to-many approach, and automate activities such as marketing.
Creating Products out of Services
By codifying you or your businesses smarts into information products, your know-how can be created once and delivered multiple times. Rather than having to go through the same explanations time after time with each client, capture it in video format. This way they can get the message at their own pace and time, so when you meet you can focus on higher value conversations. This approach also allows for the same smarts to be utilised by less skilled people in your organisation, making them more productive too.
By codifying your knowledge it allows you to create a more consistent and robust offering, which when you commit to incrementally improving over time, increases the value you add to your clients.
By creating your content in modules, you can bring together separate modules to provide a customised offering, at a fraction of the cost of starting from scratch.
Introduce a one-to-many approach
Whether it be a workshop, group coaching, or a membership subscription service, delivering one-to-many allows for the double benefits of a cheaper price to your customers, at the same time as massively increased margins for you. Suppose you provide a £2,000 service on a one-to-one basis, but offer it at £1,200 as a one-to-many service. Even if you delivered it to a small group of 5 customers, you’d make £6,000: three times as much money for a similar amount of effort. Your customers gain from the input and questions of the other group members as well as a lower price, and you positively impact more people. Everyone wins, and the all-important productivity improves.
If you extend this principle to a monthly subscription service so the £2,000 one-to-one product is packaged and delivered on a drip feed in manageable chunks over a year for example. Then if you charged £30 a month, and because of the very accessible price point you can sell it to 100 customers, you’d make a whopping £36,000 instead of £2,000. All for the same content.
This may seem fanciful to some, but Blockbuster video didn’t adapt to a subscription model, and consequently let Netflix put them in them in the grave. From Amazon Prime, to organic veggie boxes, we are becoming more used to subscription services for convenience and value. It’s time to embrace the change rather than being left behind.
Automate your marketing
If you are going to benefit from packaging your services into products, and delivering one-to-many then you’ll need to attract more customers, but it will be easier to do because your service will be better (you’ve honed your smarts into great products) and they will be cheaper too, helping you knock your competition out of the frame.
You will need to ramp up your marketing. The good news is because you’ve codified your services into products, it will easier to lead your clients down a clearly laid pathway, and that starts with your marketing.
ABOUT THE AUTHOR
Tim Johnson is the author of The Authority Guide to Meaningful Success: How to combine purpose, passion and promise to create profit for your business. Published by SRA Books as part of the Authority Guides series of pocket-sized business books. www.authorityguides.co.uk @SRA_TAG