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A longer version of this article was originally written for our sister site, PracticeWeb – but as the advice given here is relevant to any business owner planning to launch a new service, we’ve decided to adapt and publish it here on UKBF.
Starting a new service is a great way to expand your revenue and enhance your proposition in the market. That’s especially true when many firms are responding to changes in what their clients want and need as a result of COVID-19.
Perhaps existing clients are starting to ask for services that you don’t yet offer but feel you could. Or maybe you’ve started to provide a service on an ad hoc basis to a few clients and it’s now got to the point where you want to build it into a service offering.
When starting anything new, planning is everything, and designing or integrating a new service into your business is no different.
Before you get stuck into the plan, ask yourself why you're doing it and who it’s for. This will provide a quick sanity check and make sure you’re doing it for the right reasons, with a target client in mind.
To start with, let’s focus on how you can package your service. This is often confused with promoting a service, but these are two fundamentally different tasks.
When you package up your service, you need to think about what you want to include. What does the client get for their money? What are the features and how much does it cost?
When it comes to promoting it, it’s more about explaining how the service solves the client’s problems and the results they can expect. This is where your buyer personas come in. What do your ideal clients care about? What do they need? How will your new service relieve their pain points?
Packaging your services is often an effective strategy because it reduces the information a client has to process and simplifies the decision they need to make, removing barriers and prompting them to buy your services faster.
Make sure your package is clear, concise and attractive to the type of clients you want. Avoid using overly complicated language when you’re describing the service, or making assumptions about what the client already knows.
You also need to define how the new service will integrate into your existing business offer. Are you enhancing an existing service or creating a new one?
There are four common ways to price services, and each one has advantages and disadvantages.
Value-based pricing is the practice of setting the price of a service at its perceived value to the client.
This gives you the advantage of being able to sell at the highest price and increase profits, as well as attracting higher-value clients.
It also means you can attract and retain highly-skilled employees, and use your business’s knowledge and expertise to guide your clients.
It may, however, mean that clients have particularly high expectations of your standard of service, and it could leave you exposed to competitors undercutting you on price.
Labour costs may be high as you’ll need to employ highly-skilled individuals, and scalability can be difficult due to resources required.
Grouping individual services together can make it easier for your prospects to choose and to buy at a reduced cost.
With this method, you have the benefit of simplicity and clarity, with a single price for a number of services, and you can appeal to prospects on different budgets. It can also help you to weed out prospects who aren't the right fit.
On the other hand, the bundles may not meet your customer’s more specific demands – or they might not want all of the services in the bundle.
If it’s not done correctly, you run the risk of under-selling your services.
Paying a fixed monthly price for services is a great way for clients to spread the cost – and it gives you a regular monthly revenue stream.
Clients spending monthly are less likely to churn, and that stability means subscription businesses tend to be valued higher when sold.
You’ll need to make sure you can justify the monthly fee, however, and being tied into a contract can sometimes make prospects nervous.
It also requires a specific set of internal systems and processes to those needed when you’re selling one-off services, and you should make sure it’s scalable without eroding profitability.
Alternatively, you could charge one-time payments when a client or prospect requires specific work to be done.
This comes with a smaller barrier to entry for your clients, and gives them the flexibility to use you when they need to and fit the service into their budget.
The downside is that it means there’s no client commitment, making it potentially harder to retain customers, and more difficult to predict revenue. This can make resource planning harder for you.
When you launch a new service you won't have any skin in the game. Your clients won’t know you offer this service and the market you work in won’t know either.
And you’ll be up against well-established competitors who already have the proof to demonstrate they can deliver the service.
To gain traction with your new service you’ll need to build your reputation, demonstrate you have the right expertise, and push its visibility.
The best way to do this is to create a marketing strategy aligned to your target clients and business goals.
This should include specific campaigns that promote your services to target clients, and that give them the information they need to buy.
Twelve months down the line, the chances are your service will have grown into something totally different. Adopt an evolutionary mindset to keep improving as you learn.
With that in mind, the process of creating a new service should look something like this:
The key to a successful service launch is doing your research, knowing your market, and resisting the temptation to make assumptions.
While you’ll have good knowledge of the markets you serve, you need to test your hunches. No single person can represent an entire market so do your homework and challenge your own thinking.
As you design the service, make it easy to understand. The buyer's journey is already complicated – keep your offer simple and make it easy to buy.
When it comes to promoting your service, make sure you educate, inform and demonstrate expertise.
And finally keep an open mind as you test, learn and improve.