If you run a service-based business there is a ceiling to your income. There are only two things you can leverage: the amount of time you work, and the rates you charge for your services.
But there is something else.
In my article Why you need to productise your services (and how it works), I showed how you can package your services so that you can sell them more like products. Products are a lot more scalable than services, and if you can productise your services you can sell more at higher rates.
One of the key concepts underlying productised services is the 3-prong strategy.
The 3-prong strategy
The 3-prong strategy helps you design your products (or productised services) to get the most leverage from your expertise and your time.
As the name states, there are 3 “prongs” to the strategy:
- 1:1 products: these are products that you deliver personally to one client at a time. Consulting with a client is the most common way to do this.
- 1:n products: this is where you work with multiple clients at the same time. Workshops and webinars are good examples of 1:n products.
- 0:n products: these are products that you build once and sell many times. Ebooks and self-study courses are good examples.
Leverage your expertise now, your time later
There are a number of advantages to the 3-prong strategy. It is relatively fast to start generating revenue by selling consulting services, or 1:1 products. The amount of preparatory work is relatively low and you can leverage your expertise from the beginning.
Workshops are generally cheaper for your clients than 1 to 1 consulting. On the flip side, you can make more money in the same time because you’re working with multiple clients at the same time. However, it takes longer to build up enough of a market presence to consistently fill workshops on a regular basis.
Eventually, you can start building up passive revenue by building 0:n products, or info products as they are generally known. I have info products such as DIY guides and self-study courses, but to make significant amounts of revenue from them it takes a long time to build an email list – or a presence on a marketplace like Amazon.
But building up enough of a presence in the market to regularly fill your workshops takes time. And building enough of a following to purchase your info products takes even longer.
In the graph above you can see the principle at work. The percentage of revenue you generate from 1:1 work is relatively high when you start out. You can supplement the consulting revenue with workshops and info products, but it takes longer to build significant amounts of revenue from these streams.
So a fundamental principle of the 3-prong strategy is:
You an generate income from 1:1 products relatively quickly. In the longer term, you can leverage the expertise you’ve gained in the 1:1 leg to create 1:n and 0:n products that generate more revenue for less of your time.
It is tempting to want to jump right into the 0:n leg and write books and make all your money from that. There are certainly people who do this very successfully, but there are two things that you have to know:
- They are experts in their respective areas. That expertise allows them to write with authority and create products based on real-life experience.
- It takes a long time to build steady revenue streams from 0:n products. Think years, not months.
Build a product ladder
Once you understand the 3-prong strategy, you can start building a product ladder.
A product ladder is a selection of products that start free, make it easy for clients to buy with lower-priced products, and culminate in one or more “flagship” products that are the most expensive.
When you use the 3-prong strategy to build a product ladder, it looks something like this:
In this diagram, you can see the three prongs of the 3-prong strategy down the left. Then there are 4 columns:
- Ideas: I find it useful to have a column where I can list ideas for future products. It is so easy to think of many different products, but you can easily drown in all the ideas. So keep them in a separate column.
- Lead magnets: These are products that you give away for free in exchange for an email address. Your client gets something of value for giving up their email address, and you get a new subscriber in your list. Typically, you want to design these lead magnets so that you spend as little time as possible delivering them to clients that you haven’t qualified yet.
- Entry level: These are your low-cost entry-level products. By keeping the price relatively low you reduce the risk potential clients face when they first buy from you.
- Flagship: And finally there are your flagship products. These are the most expensive and valuable, and clients typically only purchase them after they’ve downloaded a lead magnet and purchased an entry-level product.
The temptation of too much
It is very tempting to want to fill in every part of the product ladder. But this is a recipe for overload; it takes time to build workshops and a lot more time to create and sell info products.
You need to avoid the temptation of adding too many products into your product ladder. Too many products – especially in the 1:1 and 1:n prongs – can be confusing to sell and difficult to choose from.
My advice is to keep the number of 1:1 and 1:n products relatively low. Over time you can add as many info products as you like (provided of course each one is clearly different from others).
Here’s a partial view of my current product ladder as an example:
Note in the example above that there are no lead magnets in the 1:1 row. This is because almost all of my coaching and consulting work comes from referrals.
Use the 3-prong strategy to design your product ladder
The 3-prong strategy makes it easy to design a product ladder that works for you and for your clients.
The best advice I can give you is to keep it simple. Too many products will confuse you and your clients, make it difficult to maintain your web site, marketing material and marketing, and detract from what you should really be doing – selling and delivering.
I would love to see your product ladder – drop me a note.