I ran another agency for thirteen years before starting Special Sauce. We won awards, made the Inc. 5000 list, and had multiple seven-figure years. We also struggled with inconsistent cash flow, stressed employees, and a dangerously top-heavy client list where 50% of our revenue was from one company.
It felt like we were always fighting for life. The rollercoaster was caused by our lack of focus. We did everything from design Whole Foods stores to manage social media. Our staff was maxed out and underutilized at the same time.
I sold that company to my partner, started Special Sauce, and committed to developing a set of products backed by systems. Productizing our services has been the path to growth and sanity. I’m willing to bet you’ll experience similar benefits by applying the principles outlined below. Implementing a product funnel will improve your marketing, sales, retention, client results, cash flow, and revenue.
What is a product funnel?
A product funnel is similar to a marketing funnel in how it works. Marketing funnels are intended to take prospects from awareness to purchase. Product funnels are intended to take a client from hook product to retainer. Both provide a manicured trail for your clients to follow toward their goals.
You’ll be rolling in leads, clients, and recurring revenue when you stack a marketing funnel on top of your product funnel so there’s a clear path from awareness to retainer. Your marketing funnel will do the heavy lifting of getting someone to the hook product and then your products sell themselves. Sounds wonderful, right?
Here are the four stages of productizing your business with a product funnel:
These stages may look different for your business. Sometimes it makes sense to combine steps two and three into one. Other times, it’s logical to go straight from hook product to retainer (more on this below). I’m going to walk through all four stages for this article. Whether you use two steps or four steps, it’s good to understand the purpose of the full expanded funnel.
Hook Product: Roadmap For Success
Sitting at the top of a product funnel is the hook product. This is the most transformational aspect of a product funnel. I see the lightbulb fire up when I explain this concept to clients. It’s really simple. Instead of trying to sell every service you offer out of the gate, focus on the one step all projects must go through to be successful.
Your hook product will deliver a quick win for clients, have a set fee, move them closer to their goal, and tee up your next service (product). Hook products should include specific deliverables that are repeated for every client. The end result is different for each client, but the process to reach the result is the same.
Having a hook product makes selling your services, improving your operational efficiency, and delivering an impressive experience for clients easier. We have a high close rate on people that inquire with Special Sauce because we’re only selling one thing. We don’t have to explain everything we can do for a prospect. The only thing we have to convey is the value of our Brand Recipe process and how it works. Once they sign on with us, the Brand Recipe process carries clients to the next appropriate product for their needs.
How do you develop a hook product? Start by asking yourself a few questions…
How did your best client relationships start?
What are the steps you went through to get those clients results?
What do you repeatedly do for every client at the start of a relationship?
Document the steps you took with your most successful client projects and turn them into a process. Once you’ve defined the steps, specify how long it will take, determine a price, and give the product a name.
That’s your hook product.
You’ll get pushback from some people that want to skip straight to your other services. Stick to your funnel and require clients to progress through your system. Remember, you built this based on your most successful client projects. It’s in their best interest to start with your hook product. Let them go elsewhere if they don’t see the value in your process. They’ll never be a good client if they want to change how you do things.
Product 2: Foundation Work
We move from laying out the architectural blueprint with our hook product to pouring concrete with product 2. For Special Sauce, this is our creative development phase. The precise deliverables of this step depend on the business. New businesses will often need a name, visual identity, and website. Established businesses may only need fresh copy on their website to make it better connect with visitors.
The specific deliverables are determined by what each individual company needs. The one uniting factor is that every company needs some type of creative preparation before we move into launch prep. If you’re working with clients, there is some type of foundation work to be done before moving forward. This product is where you make that happen.
Product 3: Prepare For Launch
With our strategy and foundation set, we can move into preparing everything for launch. For Special Sauce, this step is where we build out a full marketing plan from goal and strategy to tactics and schedules. We set up Google ads accounts and campaigns, integrate analytics, add tracking pixels, allocate specific tasks to team members, and train our clients on how to execute their plan.
Your tasks won’t be the same, but you’ll have some type of pre-launch checklist to complete. The purpose of product 3 is to give your clients the best shot of hitting their goals through preparation, training, and documentation.
Retainer: Ongoing Execution & Management
Recurring revenue is like having a money tree for a client-based business. Starting each month with $10,000, $50,000, or $100,000 of revenue guaranteed makes life a lot less stressful. Use your other products to lead clients right to your retainer.
Your sales cycle for retainer work will be short if they’ve already gone through your other products. Honestly, you don’t really have to sell. Many of your clients will ask if you can just handle it for them (whatever it—your service— is in your case).
I’m a believer that a service business must have some retainer work to scale. Ideally, your business model is built completely around retainer work. However, most clients are understandably hesitant to jump right into a retainer. Use projects to put their worries at ease and tee up retainers for the right clients. If you can go straight from hook to retainer, you’re ready for…
The Simple Retainer Funnel
Some businesses can skip products 2 and 3 in favor of a simple retainer funnel. You go straight from hook product to retainer with this type of product funnel. There are many cases where we use this approach. Knowing what our two funnels look like allows us to match the appropriate path to each client.
The one constant is that we’re always working to progress the right clients to a retainer. If you’re in the client business, you should be doing the same. Your goal is to build up a monthly base so you’re not starting over at zero every month.
How to get started with your funnel.
Start by coming up with a killer hook product. Don’t worry about selling all of your other services. Educate your sales team on your hook product and focus all of their efforts on moving that one item. Once you do that, make it a natural progression from one product to the next. End everything with a strong push for retainer work and you’ll be off and running. Over time, a productized service business is much more predictable thanks to clear steps you can measure at each stage of the funnel.
Remember how I mentioned the power of stacking a marketing funnel on top of a product funnel? Here’s your chance. We’re running a marketing plan challenge starting September 8th. We’ll be going through the steps of constructing a marketing plan to finish 2020 strong and charge into 2021 like Mel Gibson in Braveheart (minus the disembowelment).Andrew