A Productized Service Story

This is the story of SiteRescue.  It is the second productized service that I launched.  My goal was to achieve $7,000 – 10,000 a month in sales within six months of launching.

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Before we get into the meat and potatoes though, here’s a little background:

I’ve been struggling to switch from consulting to products for years. It’s been an uphill battle as I’ve had to simultaneously deal with show-stopping tendinitis that ruined my ability to consult as a programmer.  In the years since my injury, I’ve built a small development shop with the intent of using our team to spin off digital products. In the meanwhile, an alternate framework to developing products evolved called productized services.

What’s a Productized Service?

A productized service is simply the treatment of a service as if it were a stand alone product.  Some of the benefits of this are:

⦁ Easier profits because of increased efficiency in delivering a specific solution to a customer.
⦁ Speed to market is lightning quick.
⦁ A much higher price point than a digital product makes getting meaningful traction easier.

My First Try

In early 2015, I decided to “productize” a retainer that we already provided our clients for maintenance and support.

The challenge was that our target customer was a small business with a Joomla website and you can’t market to something so broadly defined.  Sales becomes the only viable channel.  However, if a small business isn’t currently experiencing a problem, interest is low.  I leaned heavily on cold emails with little to show for it.

Late in the year, I signed up for Brian Casel’s “Productized” course and a coaching call.   Brian recommended that I identify a target customer and do 20 interviews.  He also commented that maintenance seemed like a “vitamin” service: it would help people, but its persuasiveness  was weak because prospects weren’t experiencing “aspirin” level pain.

It was good advice, but was also disheartening because it was proving challenging to get interviews and I saw the process stretching out for months.  With no clear customer and no strong incentive, I decided to put the service on the back burner and try to come up with a better offer.

SiteRescue

Rather than start from scratch, I wanted to try again to utilize some of the existing strengths of our consulting business.

We are strongly positioned as developers for the Joomla CMS and hold top search engine rankings for key terms. I wanted to use our positioning, our experience, and our search traffic to sell a service with a higher price and pain point.

We were experienced recovering hacked sites and I couldn’t think of anything more painful than dealing with being hacked. I was confident that it would be a winner even with the same broadly defined customer as the maintenance service of “small business with a Joomla site.”

I named the service SiteRescue and set a goal to work on it for six months and try to achieve $7,000 – 10,000 in monthly sales. If I wasn’t in that ballpark, I was going to drop it. The deadline was July 1, 2016.

January to April

Initially, I just wanted to figure out if it could work. Were there enough potential customers for the problem? I checked the search traffic and saw that there were 700 – 800 searches for related topics a month. I figured that we could get at least 400 of those. If we could convert 5% of that traffic to a sales call and convert one in five (20%) to a sale at $1500-2000 it would put us in the $6,000 – $8,000 a month range.   We would likely pick up at least 1 more through PPC and had that as a buffer.  Cool.

400 x .05 x .2 x (1500|2000) = 4 sales a month to the tune of ($6,500|$8,000).

One of the challenges of the maintenance service was that we couldn’t sell it standalone. Clients who had worked with us would sign-up, but leads from the Internet weren’t warm enough to sell. To address this risk, I set up a small experiment with the objective of quickly getting a landing page up, driving traffic to it, and seeing if I could get 8 sales calls within a month.

I put a landing page up and set up advertising within 24 hours. Three days later, I had our first call and sold a SiteRescue.  Awesome!

I figured that because so little time had passed between putting up the landing page and making the sale that more would follow.  Besides, in the previous month we had performed two other site recoveries as consulting projects without any real offer on our website.  Clearly, there was demand for the service.

Rather than continue the experiment, I decided to invest in creating a content guide on how to recover hacked Joomla sites to target those 700 – 800 searches and build our own on-site sales page.

A couple weeks later, no new sales had materialized, but I knew that I’d missed a few sales calls and wasn’t overly concerned. My attention was elsewhere – I was building.

Two months later, we still didn’t have any sales, and while I was worried, I was pretty sure that I had made a mistake in our PPC campaign. Plus, our guide was rocketing up through the search engine rankings.  I was confident that SEO would be the main channel and PPC would just be supplementary.

In my journal, I wrote:

Search engine rankings are climbing. Leads *should* follow.

A few days later:

My prediction is that we’ll have three months of steady ranking improvements and then it [leads] will turn on like a tap.

To accelerate getting to page one on Google, I launched a small marketing campaign across LinkedIn, Twitter, and Facebook. The goal was to see the guide fielding 40 unique visits as a landing page by April 1. The campaign was successful and boosted our guide to 130 unique landing page visits in March.

However, on April 1 we still had no new sales: a 3 month drought.

April to July

In April, I attended Microconf, an awesome conference for self-funded startups. While there, I took a workshop from Hiten Shah. It was money well spent and he hammered home that success in entrepreneurship is about critical thinking.

On the flight home, I reviewed our situation with SiteRescue and realized that I didn’t know much about what was working and why. I had a list of questions like, “Is PPC effective at getting leads?” Most were embarrassingly basic and I couldn’t answer.

Back at work, I built separate lead submission forms for PPC and SEO. I created goals within Analytics and developed a spreadsheet to track any relevant data point I could think of regarding the service.

In early May, we had our 2nd sale and in the first two weeks of June we had 3 more.

Was the tide turning?

Though July 1st was looming, we finally arrived on the bottom of page one of Google for key search terms.

I told my mastermind, “July 1st is two weeks away. I doubt we sell more than one more SiteRescue. I’m going to back burner the service because the best we did was June when we sold $4500- only half of what I was aiming for.”  They entreated me to keep going with the service.  After all, who knew how it would do now that we were actually ranking for key terms in Google? Was I crazy?! I told them I was just sticking to my guns, but it did seem worth working on at least a little further.

I went back and reviewed the data that I had started collecting after April. I wanted to see how many SEO visits to our guide converted to our sales page and how many of those converted to contacting us. Answer: 10 people of the 400+ unique monthly visits we were getting through our content looked at our sales page.

2.5% simply viewed the sales page… If we converted 5% of them and then 20% on the sales call we would have .1 customers a month.  I had skipped an entire step in my napkin math: how many people would move from content to offer.

In my journal I wrote:

SiteRescue is doing okay. I’m a little down on it because even though the marketing has paid off for SEO in unique visitors, few of them are converting to the sales page. It’s great that I know where the problem is, but a part of me feels like… “Fuck. Really?”

The first two weeks of July I was on vacation so I decided to extend the deadline to August and treat it like just another month and reevaluate on a personal retreat before August 1.

July

I wanted to see if I could improve the conversion rate to our sales page for our guide visitors.  It was a gaping hole in that funnel. To generate some insight, I installed Crazy Egg, a heat map overlay product that would tell me how visitors were using our content guide. I also improved the visibility of the call to action by moving it above the navigation on the sidebar on all the guide pages and adding a button.

After a week, I reviewed the results. No one had hovered over the button.

I made the heading and button neon green which made it clash obnoxiously with every other color on the page.

Two weeks later, I reviewed the results again. No one had hovered over the button.

Shit.

I created a graphic with a skull and cross bones and removed the copy so that it was just a neon green heading, graphic, neon green CTA button. Then I deemphasized the content in the guide so that other images didn’t compete with the graphic.

Two weeks later and no one had hovered over the button. Our visitors loved our guide and would spend up to seven minutes on some of the pages.  Few were interested in hiring help.

The Personal Retreat

I take personal retreats once a quarter to think deeply about goals and challenges. I spent four or five hours and multiple cups of coffee at the end of July mulling over whether we should continue to work on SiteRescue. I was trying to answer questions like:

⦁ What if we doubled our organic traffic?
⦁ What if we doubled our PPC traffic?
⦁ What if we increased sales page conversions by x%?
⦁ What will change when we hit the top three slots in Google?

I was running through my formulas again and again about how we could get to $7,000 – $10,000.

I was poring over the spreadsheet I used to track metrics for our marketing.

There weren’t any clear answers.

I did realize though that creating content was a huge waste of time. PPC delivered 3 out of 4 of our sales and most of our leads.  PPC was great for aspirin pains.

Unfortunately, I had wasted months creating content. Not just our content guide, but also five different blog posts targeting specific pain points that exist for hacked sites, a drip email campaign, a seven-page opt in bait, and a widget to check spam blacklists. All that content generated one sale by means of a referral from a sysadmin who encountered it.

The challenge in deciding what to do was that it wouldn’t take much to change for SiteRescue to work because our goal in sales was minuscule (4-5 sales a month.) If I was missing a key weakness and could fix it it would dramatically alter our results.

Additionally, I felt like there was potential value in what we had developed over the first half of the year. It wasn’t sunk cost, but that I saw resources that were just missing the mark:

⦁ A decent sales page with good testimonials.
⦁ Intel about advertising, the market, the obstacles, the players, and the pitches.
⦁ A tool that we developed iteratively through each SiteRescue to increase the speed in which we could recover websites.
⦁ A solid process that provided a lot of value for the customers who hired us.
⦁ Content that was capturing around 40% of the available traffic for key terms.

It felt like I had a crappy band, but that there was promise in the guitar player, drums, and vocalists.  I just had to figure out a way to bring them into harmony.

The decision was painful. On the one hand, it could work. On the other hand, I could waste another six months trying to make it work.

In the end, I decided to create no more content, back burner the service, but continue to tweak and test PPC and our pitch. I give myself three days in the next quarter to do this and decided that I would reevaluate at the beginning of the fourth quarter.

As of today, SiteRescue isn’t dead.  There are a few alternate approaches to investigate for it, but it’s mainly sidelined and I have shifted my focus to what will follow.

6 Key Takeaways

1) Relevant Traffic != Customers

What if we could double our organic traffic? Nothing would happen because organic traffic doesn’t convert. 400 × 0 = 0. 800 × 0 = 0.  Even focused, seemingly commercial, keywords like, “clean hacked joomla site,” or “hacked joomla site fix” don’t convert. As I write this, we continue to rise through the rankings and are in the top three for some keywords.  Nothing has changed.

I can’t say exactly why this is because SiteRescue doesn’t have well-defined customers that we could interview, but I suspect that Joomla’s large do-it-yourself style market is why the content is engaging, but will rarely sell a higher end service.  Most visitors are interested in information and tools, not services.

Traffic is not the same as customers and cannot replace customers.

2) Confirmation Bias Is a Bitch

I jumped too soon based off of one quick sale. I was sure that the idea would work because the only missing piece was the marketing and I knew that I could get traffic. What I had was a few recent related consulting sales and one direct sale and an assumption about SEO that was incredibly risky. I wanted it to work and was seduced to the dark side of, “this feels like a winner.”  I was a blind to the risk.

3) Identify and Either Test or Eliminate Deal Killer Risk

My business model was based on a huge assumption: that SEO would be the main channel and would give us around 4 – 5 sales a month. The “side” channel of PPC turned out to be the main one and it was much more competitive than SEO. I thought that PPC would likely give us 0 to 1 sales a month and this turned out to be more accurate (unfortunately.)  0 – 1 sale wouldn’t meet my goal unless I was selling a $20,000 service.

There is no way to test to resolve the risk in this scenario because who knows how organic traffic converts until you have it? However, going forward, I would want a business to succeed via another, testable, channel and have SEO be an auxiliary to turn to once the model works.  (More on types of risk here: Beating the Odds When You Launch a New Venture)

4) Speed to Market Is Less Important Than Feedback Loop Length

The beauty of a productized service is that the higher price point can help you to leverage tiny niches. However, because we didn’t have a real target customer that I could interview or research, and because we were in one of those tiny niches there wasn’t much in the way of relevant information.

Earlier, I mentioned that I thought I messed up our PPC in February. I tried to run 5 different ads in Adwords to see which positioning converted the best. With 800 searches to target for PPC and 5 different ads running around .5% – 1.5% CTR it would be over six months before I had statistically relevant information even if one was significantly better than the others.  I reduced it to two identical ads with different headlines and was able to to get relevant positioning information about every 45 days. Yikes.

Additionally, our traffic based market meant fewer leads and sales calls with less information to be gained in those interactions.

Assessing our results was sloooow and pretty much nonexistent until April.

With a long, weak, feedback loop, it was really challenging to get intelligence about nearly every aspect of our marketing. It ruined the speed to market advantage of the service and we might as well have been building SaaS in the background for the length of time it took to get feedback and evolve.

5) Set Yourself Up To Learn

After the workshop with Hiten, I treated SiteRescue as a small laboratory and made my hypotheses explicit. I began gathering lots of data about each aspect of the two channels we were focusing on. I went from just having a plan to testing key hypotheses about that plan. I shifted focus from doing to learning. After a few months, instead of guessing about what wasn’t working, I could identify exactly what parts of my strategy were wrong.

6) Ignore Defining the Customer at Your Peril

This the theme of this entire case study. Trying to move forward without a clear, focused, target customer is like building a table with three legs instead of four.

It’s a huge weakness in our consulting business and as you can see from this case study it created serious obstacles in both of the productized services we launched.

As Brian succinctly put it on our coaching call back in December:

…a small business with a website is not a target customer.

Even a small business with a website and a migraine of a problem.

Losing and Winning

I’ve thought a lot about losing and winning the past couple of years. Not the emotional impact of it, but how it affects future success. In brief, winning begets winning and losing begets losing. It’s like this bell curve where you slide off to one side or the other depending on which side you’re on.

Being on the losing side does have one advantage over the winning side of the curve: psychologically, you’re in a better spot to grow.

You’re still humble. You don’t have everything figured out. And you’re hungry. Every twist in the road provides a lesson whether it’s a success or failure.

I learned a lot more than the six takeaways above. I have two pages of my notebook which list what worked and didn’t work as one-liners. My knowledge of web security topics deepened as I focused the service. My SEO, marketing, and PPC skills were pushed up another level. I added several techniques to my toolbox for getting intelligence about a market. I learned about blind spots in my mindset that I didn’t realize were there.

All this to say that though I failed in creating a service to meet the goals I set for it, the experience has made me fitter.  Winners get to win, losers get to grow.