Must KNOW #Hack for professional service businesses
In the gaming world, there are two types of the way you can take short cuts to complete and conquer the game. Firstly, you can take advantage of a glitch or bug which is an unforeseen issue in the game's code that allows you to take advantage of a quest. Secondly, you could hack or cheat in a game by doing something contrary to an agreed-upon set of rules in the game. These are two ways of taking shortcuts in the gaming world. At MGA we would never put forward taking short cuts or cheating in business, however, there is one terminology that we, at MGA like to put forward and that is to “hack the game”.
Urban dictionary describes the ability to “hack the game” as someone who is so good at the game, the only excuse that seems reasonable is that they somehow hack edit via cheat or glitch. This is used for someone who has mastered the game above and beyond his or her competitive peers. In the same way, I believe that you can “hack the game” of the professional services industry by implementing this one key strategy.
In my experience and observation, the mistake that many professional service organizations make is that they lack a recurring revenue model. Many of these businesses usually offer a service that is a "once-off" service or maybe a "twice-off service" however there is no subscription or recurring revenue product. They constantly rely on that once-off service being in high demand in order to survive. However, when there is a lack of demand for the service, and then they see a downward trend in revenue there comes a liquidity crunch that could be detrimental for the business – possibly even leading to bankruptcy.
Given this, as a business growth advisor, I recommend all my professional service clients, to continue to do once-off services but also to create a recurring revenue or subscription-based product. While it seems easy in theory, the question from most of my clients is how so here are my top 3 tips for creating a recurring revenue product for professional service firms:
1. Understand your clients: Your clients will always give you clues in regards to what they need. For instance, if you are a personal trainer who offers PT sessions for people to lose weight, they will probably come to you for 3-6 months to lose it and then leave. After this, you will need to find another person who also wants to lose weight. So the first step here is to understand what other needs they may have? For instance, using the PT example again, I’ve seen in the market creation of diet plans, food supplements, further training and online training etc. The first step is to understand your client needs which they may not even understand themselves.
2. Subscription-based products: A large trend these days is to create subscription-based services and products. For instance, Netflix uses a subscription-based model that gives users full access to their portfolio of movies. Rather than the Apple TV model where you pay as you go, Netflix has used subscription-based products to create a “sticky” and“recurring” revenue model. When it comes to your professional service, what possible products can you innovate into a subscription-based product service line? Firstly, you must understand your customer and, secondly, create a product worth buying and subscribing to.
3. Think outside the box: Creating new products is never easy especially when it comes to the professional service industry. However, finding creative solutions for your clients requires innovation,trial and error and then making tough decisions to continue the product or not.It will take time, effort and resources to come up with a recurring revenue product that your clients need but it will be worth it for your business in the long run. My tip is to think outside the box and you’ll find there is usually a product that can potentially be “sticky”.
I trust that this blog helps you and if you are keen to level up your business and be part of our Phamily at MGA, feel free to contact me and we’ll get your mission to grow your business started.