An Unexpected Journey: Four Tips for Managing the Transition from Service to Product (Spoiler: No hobbits)

written by: Mike Granetz

February 5, 2013

We have a nucleus of clients in the mobile communications, mobile app management, and cloud computing markets. Like many in that space, they are startups, launched by an intrepid few who dig risk as much as they pursue innovation.

Whether working with them for just a few weeks, or several years, we’ve noticed a point of continuity among their organizational evolution. They come to market with a concept rooted in establishing ongoing working relationships with their customers, but their technology inevitably becomes better packaged as its own solution — a product that their prospective customers can fold into their operations to best realize its advantages.

That’s not to say that they detach as consultant service providers. Most maintain strong partnership relationships, but the initial source of attraction is not “great customer service”, but rather a strong, readily deployable solution that will bring benefits right away. In short, a product.

Fortunately, we work with people smart enough to recognize the transition. We can point to a few experiences where people refused to accept the reality of their company’s shift from a service to a product provider. It was subtle and easy to resist at first. And perhaps pride of ownership or originality clouded their vision. When they did make the realization, it was often too late, and competitors were already chewing through the market with well-branded, well-marketed products of their own.

Again, not the case with our current clients, who weren’t too proud to let their solution manifest itself in the most profitable way possible. That has often meant changing their messaging, their marketing outreach, and even the identity of the organization itself.

The communications and information technology sectors are packed with fledgling companies on the verge of these kind of breakouts — ready to bring a solution to market that doesn’t just address a need, but identifies needs that might not have even existed mere months ago.

How does their marketing adapt, in-line, to the change?

Things to consider:

All About the Benefits

Service-based organizations put a lot of weight on their ability to empathize, their accessibility and availability (remember when “partner” became a buzz-verb a few years back?). Instead of hammering on how chummy you are, and how you’ll always answer the phone, shift to heavy bottom-line advantage of your product. It’s not how great you are, it’s how much better your client is going to be once they have your solution in place.

Lead With Issue Awareness

When disruptive innovation is the rule of the day, the problem your product solves is getting as much attention as your product itself. Whether you’re reaching out to prospects, media, partners, etc., they may need a minute to absorb the idea of a new issue. The good news is that you can take point as an educator, explaining the emerging need for a solution to a problem that simply didn’t exist a few months ago.

It’s Not as Easy as You Think

You’ve got a great product, everyone is going to want it – why wouldn’t they? Look at Gangnam Style, over 1Billion YouTube views that started with just one. The erroneous presumptions:

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Just because the math is easier (like “if we only .5% of the market, we’ll do 2MM in our first year!”) doesn’t mean marketing and selling is going to be any easier. It’s still going to take getting the right messaging to the right audience at the right time. It’s going to required focused content marketing, engaged users, a dynamic web presence and seamless transactions. Don’t jump to a product because you think it’s easier. Cleaner? Perhaps. Easier? No.

Don’t Underestimate it, Sex Sells

Thinking of offering a free trial? A video demo? Better make it look good, and not just because a slick looking screen cap has a better chance of being downloaded than one that looks like it was built in for Windows 3.1. Good UI means ease of use. Ease of use means speed and efficiency. Bad design adds to seconds lost. Multiplied by hundreds of users and hundreds of days adds up to hours and days of lost productivity. These mean much higher costs, as in higher than spending an extra few weeks of development on design and user testing.

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