Creating packages of the services you offer to clients is one of the most valuable actions you can take to scale your business.
It is also, however, one of the most daunting and time-consuming processes you can undertake.
You need to gather your team, everyone who is involved in what you sell and deliver to customers, and work together to itemize everything you get paid for.
It probably feels like you provide a thousand different services in delivering a customized offering to every customer.
Painful and frustrating it might be, but it’s an incredibly important exercise and you will find that you are gradually able to build up a definitive list of the services you provide.
Identify the Value You Deliver to Customers
Part of this process has to be attaching a value to each service you provide to each customer.
This can be challenging, but I would suggest you work out how much it costs you as a business to deliver. Once you have that figure you can apply your gross margin and you have a price for each service.
The next step is to calculate the value your service creates for each customer who buys it. We know it costs us “this much” to build – maybe it actually delivers a far greater value to the customer and you can add additional margin to that. The valuable services with the largest margins should be your focus.
This is why everybody needs to be at that table, including the sales team, to build confidence around the importance of what you are delivering.
That in turn will give you the confidence to be able to sell better and sell more because you now see the value it brings – not just what it costs you to create.
If there is an item on your services list you simply cannot justify as a team, then you should cut it out because nobody wants it in the first place. You may have been selling something no one on your team likes and no customer really cares about.
The Three Categories of Services in Your Packages
Remember, all your packages are designed around what customers want, not what you want.
1. The First 80%
As you inventory all the services you provide, you will find that there are many services that prospects ask for most often. Although you may perceive that you are customizing your offering, in fact the vast majority of the services you provide will be common to all customers.
Services that you sell on a regular basis should always be part of a package. By analyzing how often you sell them, and the value they deliver, you can adjust the packages to make them more attractive to customers and more lucrative for your business.
2. The Next 10%
During sales calls, your team will find that about 10% of the time they are being asked for services that do not fit easily into a package.
However, the requests are regular enough that you can deliver those line item services as a premium-add on.
One example is that of a provider of video or written content who may want to deliver a translation to a different language. Your standard (80%) package might come with English only. If a customer wants another language, you can sell that as an add-on for an additional premium fee.
Those extra little items on your menu can have a great margin because they seem small compared to your overall package. If you find yourself having to “include” random items for “free” to get deals done, add-ons are the way to fix that.
3. The Final 10%
Here is where it gets really interesting. This category is for services that virtually nobody asks for but, when a really high-ticket prospect comes along and is willing to pay for it, you can customize for them.
There is an opportunity here for a substantial mark-up. You already have your packages but this is a chance to expand out of your zone.
You are comfortable that you can produce the service requested, you like the customer – and you have the opportunity to add new and innovative capability to your company.
Be hyper aware of this 10 percent because this is where your future add-ons might come from. Your high ticket customer is essentially paying your company to develop a new capability. Take that opportunity to do so in a scalable way and you’ve got a new, lucrative add-on to offer other customers.
Naming Your Packages – How Much Does It Matter?
Deciding on the names of your packages is a micro-branding exercise. Ideally, you should look at your vision and mission and find three words that echo them to work as titles for your packages.
For instance, if you have a brand that includes a rocket, you might go for “launch,” “orbit,” and “infinity.”
At Add1Zero, we thought it would be cool to use words starting with “X” so we titled packages “Xpert,” “Xpand,” and “Xperience.”
One thing I would suggest, though, is that you do not put too much effort and time into it. People can get deeply invested into choosing names but ultimately the customer does not really care.
It’s the name of a box – it’s what’s in the box that is important. And the price tag on the box is even more important.
Make Sure Your Customers Fit Your Niche
The scoping process you undergo to identify your packages should reinforce your vision about where your company sits in the competitive landscape.
“What we do,” and “what we don’t do,” are critical questions that a company should always be able to answer.
At Add1Zero, we work with B2B services companies with a tech flavor that have mid-six figures of annual revenue and want to grow to mid-seven figures. There are millions of businesses that do not fit that profile.
Finding your niche is the right move because selling to everyone is selling to no one.
As a founder and entrepreneur, I truly believe people should actively seek out their smallest possible niche and do an amazing job within it.
How to Sell Your Packaged Deals
Salespeople armed with packages can focus almost all their energies on making the sales call all about a prospect and building a relationship with that potential client.
They can work out quickly which of the company’s packages can be offered as a starting point and will have a menu of add-ons they can throw into a deal if required.
Your salespeople don’t need to be thinking about the product and the services – they need to be focused on making deals, following the little cues you pick up in sales calls, focusing on those really important, soft things that a good closer can spot and exploit.
If you give them packages and let them do their job instead of everybody else’s, that’s where the magic happens – and that’s where more closes happen.
Contact us now to find out more
If you’re a B2B services company, and this information resonates with you, book a free consultation with us, and we’re happy to talk to you about packaging your services.