Next to cross-selling, “productization” (or the act of turning a successful engagement into a commercial product) is the holy grail of professional services firms. Productization allows firms to package repetitive processes, achieve scale, increase profitability, and drive new growth—all great outcomes. Unfortunately, the way firms often go about product development means they are seldom realized.
Professional services firms are filled with smart, driven, client-focused people. They spend their lives building and honing capabilities and expertise that are uniquely theirs. They take their skills and apply them to big client problems with the hope of producing excellent results. Often, when consultants see that one client is happy with their results, they surmise that there are a whole bunch of clients who will want the same solution and they begin developing a “product” that meets everyone’s needs. Not so fast.
Here’s why.
The typical professional services firm product development process normally looks something like this:
Step 1: Name it. A cool product deserves a cool name. A huge amount of time is spent creating a catchy name.
Step 2: Package it. A product, with a name so special, requires it owns unique packaging. That means a new logo, maybe even its own brand identity.
Step 3: Protect it. This product, name, and logo are so different and important that they have to be protected. Trademarking the name and process are obvious steps.
Step 4: Market it. This product, with its unique name, naturally deserves its own URL and website, four-color brochure, press release, 10-city tour, seminars, and webinars. A product with this much power and creativity also needs to be featured on the firm’s home page.
Step 5: Sell it. Consultants say to partners, “This is the best product ever. All your clients need this. Set up cross-sell appointments for us to get out and talk to your clients about how they need this cool, one-of-a-kind solution.”
Step 6: Start over. Sales stunk because, strangely, no one wanted the product.
Does this process sound familiar to you? If so, you’re not alone.
Let’s retrace the steps and see where the product development process broke down, where the fallacy reared its head, and how the approach can be improved.
Fallacy of product naming: Naming a product is fun and exciting (kind of like naming your baby), but naming the product should not be step one.
The first step in developing a product should be creating a hypothesis about the product-market fit. This process begins by making some guesses about who the “ideal” client or market might be for the product. This is where you would detail the needs and challenges the solution would address (i.e. your value proposition). Then you would test the hypothesis by doing what Steve Blank, author and serial entrepreneur, calls “getting out of the building” and meeting tens, if not hundreds, of potential buyers. Talk them through your hypothesis, ask questions and adapt your hypothesis. The goal is to identify the “minimal viable product” for launch to ensure that you are not just wasting time “packaging” your core capabilities instead of creating a viable product. For more on Steve’s phenomenal process, check out his class on Udacity.
READ: 6 Tips for Assessing Growth Opportunities in Professional Services Firms
The fact of the matter is that the name really does little to promote or sell the new product. Most clients are inundated with catchy names, and they forget them right after they hear them. Worse, most professional services products are relegated to a meaningless three-letter acronym in less than three months and all the naming effort is wasted anyway.
Fallacy of product packaging: “Branded” products can dilute meaningful firm-wide brand building. Clients only have so much bandwidth to consume marketing messages. Firms already want clients/prospects to know the firm’s name, its value proposition, its values, its industries, its practices, its sub-practices, its geographies, AND now its products? Most firms simply do not have the resources to go that deep and clients have little interest. When you look at most firms, their product portfolios are mishmash because they lack a brand architecture to manage the products’ relationships with the firm’s brand. Adding brand names simply confuses clients when a simple descriptive name will do. Deciding whether to brand a product, and how, should come later in the process.
Fallacy of trademarking: Look through your list of intellectual capital assets. Count the number of proprietary names you invested in and are still using. I suspect the number is very small. What was the ROI on the time and legal fees? Save your money. If you are thinking about investing in a proprietary name, then make sure that the product meets these criteria:
- Does the product advance the business strategy?
- Does the product offer competitive advantage? (i.e. it gives you a clear advantage over your competitors and allows you to generate greater sales or margins and/or retain more customers than your competition.)
- Does the product offer a high growth opportunity that alters the service make up of your firm?
- Have you developed and committed to a three-year marketing plan and budget to build the brand for the product?
If it does not, give it a simple descriptive name and get moving.
Take your minimal viable product, or proposed product, to “friends of the firm” who meet your ideal client profile. You do not need brochures, websites or other marketing materials for this step. A Power Point deck is sufficient to explain the benefits and the concept. Implement the solution again and again. Learn, refine and substantiate. I recommend 10 successful engagements. If your market is viable and your process is scalable, getting to 10 should be relatively straightforward. Once you are through 10 engagements, think about launching and marketing the product.
Fallacy of marketing: Next to the time consumption of creating a name, the marketing step sucks up the most resources. Trying to build demand for a product takes time and money. A launch is just the beginning, and the initial “launch” effect wears off quickly. Building demand requires substantial and sustained resources. Most firms have an initial push and then move on to the next practice’s priority. This is why it is critical to establish firm-wide support and commitment to a minimum three-year marketing investment. A marketing plan is much more than a press release, a few webinars, and a vanity URL. Your marketing plan should leverage your firm-wide branding efforts, but focus on nurturing leads for the product. This means a comprehensive approach that educates prospects on the issues, builds demand, and seamlessly moves them through their buying process.
Fallacy of selling: If you have done the new steps, getting appointments with existing clients and cross-selling should be the easiest part of the exercise. If you haven’t, selling is hard.
Take away
Developing new products and services is critical to the livelihood of a professional services firm. However, one successful and exceedingly satisfied client does not a new product make. Don’t dilute your core capabilities to package a “product.” Use a rigorous product development process long before “launching” a product. Don’t think that a brochure and a catchy name get you there. It’s a fallacy.
Be prudent.
If you’re a practice leader or partner, one of your primary goals is hitting your number.
Improve your chances of hitting it by NOT asking marketing to do these 20 things that waste time and resources. Free them up so they can get to more demanding, and more valuable, work.
