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July 16, 2018
What Are the Keys to Packaging Your Services to Win in a Competitive Market?
By: SBI
If the above is true for you, you are not alone – but the trend is shifting. To skip to the juice, Download the Packaging Services for Revenue Growth Assessment Tool.
When we hear “services revenue” we often think of professional services packaged on top of recurring SaaS products. Break that mindset. Services revenue can exist across many (if not all) Go-To-Market models. For the sake of simplicity, we will discuss three models:
Services is often a secondary focus – particularly transactional services revenue in SaaS companies. In one sense, this is valid – enterprise value is deemed higher with recurring SaaS revenue vs transactional services revenue. One point often missed: services revenue typically indicates a stickier customer with higher lifetime value. On the flip side, decreasing service revenue is an early indication of impending customer churn. So how does service revenue get the attention it needs? Packaging.
Creating the right packaging makes a customer feel good about the product. It drives customer acceptance of the product and the purchase decision.
Grow Services Revenue By Overcoming These Six Buyer Obstacles
Put yourself in your buyer’s shoes (ideally, via a persona!) Switching vendors or taking on a new vendor has both emotional and logical objections.
On the emotional side, your buyer is likely feeling impatient – how long will this transition take? Insecure – what if the vendor that I chose, fails? And ignorant – I don’t know much about this process, that’s why I have a vendor solution.
On the logic side, there are goals to hit. Implementation timeline. Employee adoption. Regulatory standards. A product that supports resolutions to these objections is valuable. That value can be captured through services packaging.
Emotional
Logical
When you know your buyer, you can package services to increase value, and thus deal size. We recommend using market feedback to test and validate your packaging (e.g. win/loss calls ), experimenting via A/B testing, customer advisory boards, pilot customers, etc).
So You Think Packaging Services Does Not Apply To Your Business Model?
Let’s look back at the three main product operating models and how to get more revenue via packaging service:
Great, We Sold More Services, Now Who Can Deliver It?
There is one key assumption that must be recognized – that you have an excellent Services Organization. If you can achieve 20-25% of revenue from services but leave your services organization undeveloped, you are at risk for customer churn and creating detractors in the marketplace.
The old paradigm of Services-As-An-Annoyance is over. The new paradigm is Services-to-Capture-Full-Opportunity. The value is there: go package it!
Download our Packaging Services for Revenue Growth Assessment Tool to evaluate 10 Packaging Services best practices, rate your company performance based on these best practices, and find your company’s weak areas in Packaging Services.
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