Consulting services: move from a service to a product model

1. Differentiate between product and service models

Before understanding the steps involved in this transition, let's start by clearly defining what we're talking about. 

a. What is the service model?

The service model focuses on customization and customization. Even if there are similar types of customers, in the end each one is unique and requires a significant time-consuming investment to create a relationship of trust.

Take the case of a consulting company: each customer is assigned one or more dedicated consultants, account managers or even customer success. 

In this way, the service model is truly based on the availability of company resources, requiring a high level of expertise in recruitment and training. In addition, the quality of service quality of service variable depending as it does on the specifics of the project.

Consequently, the activity of a company with a service model turns out to be quite irregular and its difficult to predict. This not only complicates cash management but also its sustainability.

b. What is the product model?

Unlike the service model, this one is based on standardization.

The aim is to offer a comprehensiveeasier to to sell on a large scale.

This operation makes it possible to reduce costs by limiting the amount of time employees have to be involved, thus extending the sales target. In fact, once a product is ready for the market, theeffort remains the same whether it's sold 50 or 200 times.

In the digital world, the product model takes various forms: a tangible product such as a file (like ebooks), software or a subscription. 

Estimating sales becomes much easier, as it corresponds to the number of sales to be made.

As a result, scaling a business is much more feasible with a product model.

c. How to differentiate a service model from a product model?

Consider this diagram: 

• The role of technology

As we have seen, the greater the degree of productization, the more technology is involved. Automation takes on a crucial role, especially for repetitive repetitive tasks and low value-added tasks, generating considerable time savings.

Select the right tools and train teams to these new methods is crucial. An effective use of CRM tools and the selection of business management software such as Stafiz become indispensable.

• Greater perceived value

Comparing two qualities of service is not always easy, since they depend so much on the project, the context, the customer, the period... The product, which is tangible, enables a clearer comparison. clearer comparison and the perceived value generally remains the same over time.

• A certain continuity 

Services and products may seem to be opposed, but in reality the line is blurred. In fact, both are moving in the same direction but to different different degrees. This is illustrated in the diagram, which shows 4 shapes:

• Personalized service
• Productized service
• The product
• The product as a service

Some companies opt for a middle ground between several models.

2. Why switch from a service model to a product model?

a. Improve your efficiency

A company moving from a service model to a product model sees its efficiency efficiency increases. Indeed, once the product and the sales strategy definedthe offer is ready to use It takes the same form for each customer. This reduces the number of meetings and trips back and forth.

This transition is therefore often accompanied by a productivity gainsto focus on higher value-added on higher value-added tasks such as research and product development, or taking user needs into account.

b. Enable a more granular breakdown of tasks

In a service model, the sales cycle is strict to ensure maximum consistency. Each stage depends on the previous one. 

With a product model, each skill or service can be broken down into broken down into modules. In this way, customers can select the ones that interest them, without having to pay for a complete service. This makes it possible to reach larger number of potential customers.

c. Increase your turnover

The product model offers profitability than the service model.

It allows you to bill more without incurring higher costs. The effort is the same, while the number of sales increases, offering the possibility of a higher margin.

What's more, the improved productivity mentioned above frees up time to approach customers with higher budgets. 

d. Improve cash management

By moving from a service model to a product model, you improve your cash flow management. Revenues are more regular and can be more easily anticipated. This makes it easier to anticipation of cash flow and improves long-term financial stability of your company.

e. Strengthening customer relations

The product model, while limiting personalization, does not preclude a trusting customer relationship. 

Indeed, the product model implies payment by result, not by time spent. 

Each party therefore has a vested interest in seeing the objective met as best and as quickly as possible.

It's a win-win situation for both customer and service provider, with mutual trust.

Making the transition from a service model to a product model has many advantages. advantagesfor the day-to-day day-to-day work of our teams as for finances finances. However, this change requires some upheavalsThese include the evolution of customer relations, changes to the company's organizational structure, and the need for a new sales approach.

3. How do you make the transition from a service model to a product model?

a. Understand your customers' needs

The first step is to understand your customers' needs and how you currently meet them. Moving from a service model to a product model doesn't necessarily mean changing your customers, but rather your methods.

To do this, you can use several tools that will help you to identify which features are essential to retain during your transition:

• Customer service feedback
• Trade negotiations
• Reviews of your company 
• Conversations with your customers 
• A dedicated questionnaire 

Don't hesitate to ask your customers your customers about their expectations.

b. Prioritize 

Once you have a list of all the features you need, you'll need to prioritize them. 

Ask yourself the questions that seem essential to you: 

• What is my my customer's objective when using my service?
• What problems is solve my customer?
• What solution can I build to solve his problem?
• Am I sure that the solution I propose will provide a satisfactory satisfactory response ?

c. Determining the structure of your offer

Switching to a product model can take many forms. Some companies simply decide toadd a product line to their current model, while continuing to offer their services. In this case, it's not a question of replacingbut to building a complementary offers.

This structuring stage is crucial to the construction of your product, and requires careful thought. Not only do you need to consider your customers' objectives, you also need to think about your own ambitions. your own ambitions.

d. Identify tasks that can be automated

Automation plays an important role.

Consider all the features to integrate into your product.

List all those that can be automated or facilitated. Numerous tools are being developed every day, so don't hesitate to keep a regular watch.

Studying the competition will also enable you to identify relevant technologies technologies.

Remain vigilant, however: while the use of technology is intended to generate time savings, it must not alter the quality of service.

e. Building a standardized product offering

• Analyze your competition

Study your competitors in detail using a benchmark will enable you not only toidentify important features to include to include, but also give you an idea of of market prices. Test their offer, contact their customer service, consider their sales pitch by presenting yourself as a potential customer.

• Involve your teams

The transition from a service model to a product model impacts the entire company. Therefore, you need to involve your teams as they will be directly involved.

Engage your employees and maintain a high level of transparency will maximize their commitment their loyalty. It will also stimulate initiative and dynamism within the company.

Eisha Armstrong's book "How to Transform a Services Culture and Successfully Produce" should help you with this. 

In addition, you will gather the information you need to create your offer, thanks to the collaboration of all your teams: from customer service to marketing, technical, finance and administration.

• "Simple is better

Stay as functional as possible. Offer your customers a smooth transition by offering them a easy-to-use product. You'll probably have to develop it further as your market evolves, but start simplyand iterate quickly.

While moving from a service model to a product model will certainly expand your customer portfolio, the key is to maintain the trust already acquired. Make sure that the transition supports quality of service for which you are renowned.

• Develop an offer tailored to your business 

Build a product offering that is not only relevant to your customers, but also consistent with your company's image and values.

This change in business model raises a number of questions, particularly with regard to the long-term vision vision of the company.

Another dimension comes into play: the price. The prices charged by your competitors can already be a clue. Take the time to identify the right price for your product. It must enable you to ensure profitability while remaining consistent with the expectations of your target market.

4. Examples of companies that have made a successful transition to a product model

a. Productized service

Many companies are straddling the gap between service and product, thanks to the development of technological tools. Here are two examples from France.

• Moka.care

The company, which specializes in corporate mental health, offers a variety of services ranging from coaching for managers, to employee support and crisis management. 

However, the startup has also developed physical products to support it in this mission: a chatbot, a dashboard and a set of on-demand training courses.

These digital tools enable the company to support its growth. As its customers become more independent, Moka.care has more bandwidth at its disposal to expand to a larger number of customers.

• Ignition Program

This specialized recruitment and training agency combines human expertise with technology. The company's mission is to support both recruiters and candidates.

To fulfill this mission, it develops HR resource tools resource tools to help you prepare for your discussions. Needs are determined in advance, saving everyone saves timethe agency can handle a wide variety of profiles.

The professional alignment barometer, for example, helps candidates to get to know themselves better. The recruitment profitability simulator enables recruiters to determine the real cost of recruitment. 

b. Product 

Some companies or entrepreneurs who specialize in personalized support have opted for productization. These players have not made a 360° turn, but continue to offer two complementary services.

• Maud Alavès and Thibault Louis 

Content creators Maud Alavès and Thibault Louis with their Linkedin manual are a case in point. These two particularly well-known Linkedin entrepreneurs (with 64,000 and 90,000 subscribers respectively) have used their knowledge and their notoriety to develop this project. Sold for around 50 euros, it fulfills several objectives:

• Generate regular income
• Establish their credibility in order to generate requests for individual for several thousand euros

c. Product as a Service (PaaS) 

Other companies have adopted a subscription-based approach, while continuing their consulting services. 

• Piano Analytics 

This digital platform, and in particular its French branch AT Internet specializing in digital analytics, is a powerful piece of software, but can be complex to use. Its customers access it by subscription, generating regular income.

However, the implementation and the need to perform specific analyses or train in-house or to train in-house teams are sometimes necessary. In such cases, our consultants can intervene on both short-term and long-term assignments, providing a another source of income to the company.

Many software publishers have opted for this model: Adobe, SAP, Salesforce... 

• Swapfiets

This Dutch bike leasing company offers the use of a bike in exchange for a monthly subscription. monthly subscription. The user benefits from a state-of-the-art product, always in good condition thanks to the repair services included.

Swapfiets has truly adopted the "product as a service" model, relying on recurring business to generate regular income. The company responds to the needs of its users: the provision of a bicycle.

More and more companies are adopting this model, driven by ecological motivations. Such is the case of Homie, dedicated to the leasing of household appliances.

Unlike a traditional model that focuses on the product, Product as a Service emphasizes the benefit. In this way, software offers a global, evolving experience rather than simple access to the tool. Figma, for example, offers not only its software, but also a community, training courses and new features. The software evolves with the needs of its customers. The pricing system changes from a fixed price to a customized depending on needs and number of users.

How can I scale my consulting business?

In the end, isn't the question : how can companies with consulting activities be scaled up? ? That's the question we asked ourselves at the outset, and it's the mission of Stafiz.

How can you save time, avoid repetitive tasks and concentrate on your core business?

Companies with consulting activities lose productivity and scalability for the following reasons: 

• Poor collaboration (missing information, email communication)
• Lack of visibility on business. We can't monitor and improve what we don't accurately measure.
• Data compilation & manual tasks (double data entry, file updates, poor connection of management tools)

To scale your consulting business, it's essential to optimize the processes that are dragging you down:

Pre-sales, resource planning and capacity planning

• Anticipate needs, assignments and deals to be signed in the coming weeks. Without this process, you can't organize and pre-staff your talents optimally. Stafiz helps you to manage your pre-sales to better organize your projects in advance.

• Build the best project teams for today and tomorrow. How can you anticipate your resource requirements, identify them and combine them appropriately for each of your projects? Stafiz enables you to organize your capacity planning and your resource planning automatically and efficiently.

• Resource allocation. How can you easily monitor, modify and optimize your employees' schedules & workloads: avoid overloads, underloads or long inter-contracts? Stafiz lets you be more efficient, with unified views that are always up to date. No more email or chat exchanges.

Learn more about resource planning with Stafiz

Project and budget monitoring

• The unexpected happens, the schedule and profiles allocated to the project are modified, cost items are added. How do you keep track of all these items and not forget anything? Stafiz lets you keep track of all your costs.

• Financial tracking. If you want to know the financial impact of the measures you are planning to take or have taken, Stafiz presents you with your KPIs, always up to date and at project completion. This means that these KPIs are constantly recalculated in line with your actions. So you can compare your scenarios and analyze deviations (and be alerted if there's a risk of deviation).

• Global monitoring of your project portfolio. How can you compare your projects and choose the best ones? How do you align strategy with operations? Stafiz offers you dedicated views for rapid decision-making.

  Find out more about project management with Stafiz

Billing and cash management

What needs to be billed? What has not yet been invoiced (and should have been)? What has not yet been paid by your customer?

Stafiz lets you track all this automatically: invoice schedules and triggers, reminders and dunning, mass invoicing, purchase order management. Find out more about invoicing with Stafiz.

Final thoughts

Moving from a service model to a product model represents a major major project project. However, the benefits are well worth the effort: greater profitability, improved cash flow and, above all, the possibility of scaling up your business. To make this transition a success, we strongly recommend that you take the time to prepare.

Involve your teamsyour customersanalyze your market, think strategically with a long-term vision. Use the technologies to support you in this strategic change: automation tools, as well as project, activity or resource planning management tools like Stafiz to help you make the right decisions. Last but not least, keep it simple Good design is as little design as possible!

Stafiz is a modular, all-in-one ERP solution that enables you to manage your portfolio of projects and customers even more efficiently and profitably. Stafiz is primarily designed for consulting firms and, more broadly, professional services.

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