Market consultants sometimes struggle to consistently meet expectations. Maybe it’s because they offer too many services in too many areas of expertise. The lack of focus leads to less differentiation in the crowded market and inability to set premium prices.
Today’s guest is Max Traylor, author of the Agency Survival Guide. Max talks about how consultants and agencies can avoid pitfalls by productizing their services and get paid on perceived value.
Ben: Hey, Max. How's it going this morning?
Max: Couldn't be better. My in-laws left yesterday.
Ben: Say no more. I can imagine the sense of—not to be impolite, but relief when you're back to normalcy in your own world.
Max: Relief is a nice term for it, Ben. Joy is the first word that comes to mind for me.
Ben: I'm happy for you to be experiencing the elation that comes with completing seven days of Thanksgiving.
Max: Elated. I like that. We're going to go with that. Circle gets the square.
Ben: Nice. I guess getting ourselves back on track a bit here, we're going to talk about productized consulting services and what that means. I think for consultants, this is a more powerful way to package and sell services than what people might assume. It doesn't sound like the most thrilling topic on the surface, but I think it is definitely something that consultants, agencies should really be thinking about.
Before we get too far along, what does productization mean within the context of marketing and sales consulting? What are we talking about here?
Max: I like to explain it as things in steps. You use the same things and you go through the same steps so that you can set and meet expectations every time.
Max: Like a Nike shoe. You know how they're made, you know how much it costs, and you're not making it up as you go along. Unfortunately, most consultants, because they're brilliant, they get dragged into doing anything, and everything under the sun. Consistency is not their middle name, so it means things and steps to me.
Ben: Got you. I imagine that if you don't have consistent processes in place, then you're probably going to experience fairly high variance in the quality of your work and the results that you get with your clients.
Max: Yeah, quality work is one of them. Your mental health is another. Have you ever tried juggling five or six different balls at once? You drop a lot, you don't feel good about that. We're here to make an impact on our clients’ businesses, so we can get pretty paranoid as our business gets more complex.
If there's no consistency in what you do, you don't experience price premiums. You're never known for that one thing. Whether you become an expert in something is arguable, but regardless of that, your perceived value in the marketplace is broad, thus you are replaceable, and thus you are subject to competitive pricing, not charging whatever you want because you're the greatest in the world at whatever you chose.
Ben: Sure. I think that makes a lot of sense. What led you to the realization that this approach of productizing services, maybe narrowing your focus, and then just putting things into steps, building consistent processes into your work? How did you realize that that could be a powerful differentiator for consultancies, agencies, and maybe other solopreneurs that offer services, like services are their products?
Max: I learned the hard way. Burnout, depression, that stuff. I was running a small agency, 10 people, a little over a million dollars. We had the typical content marketing services menu. We were a HubSpot partner. Every time I took on a new client, my life got worse. Boy, is that a formula for feeling stuck in your life?
I have these goals, I hit these goals, and I come home with dark circles under my eyes. I'm pissed off even though, by all intents and purposes, I'm successful. That doesn't make any sense. Once upon a time, I'm running this agency and 30 opportunities all at once were dropped in my lap. It was a thing happening with HubSpot. I won't get into it, but I took 30 phone calls and the only thing I could do for these people was a strategy workshop.
In the beginning, I started charging $2500 for it. By the end, we were positioning it to higher education institutions and charging $30,000 for the same five-hour process that we were using. It changed my life. Lesson number one was strategy over implementation services. You can charge whatever you want.
You can't charge $50,000 for a blog. You just can't do it. But you can charge $50,000, you can charge $100,000, a million dollars for strategy. I've seen a million-dollar strategy. It changed my life because it was not that good.
Learning that strategy played by different rules was the first piece, and then we had the opportunity to license that process to allow other agencies, our competitors to pay us to learn how to do it our way. They would go out and do the work and we would get paid. We get paid 20%, which was about three times the profit margin that we were making off of the labor at our agency. We were making 20%, three times as much for someone else doing the work. That's son's management, that's son's effort. That was really the life-changer that set me on a course to help folks productize their services.
Number one, I only want to touch the things that are strategic. Number two, I want to create a consistent process, something that you can touch and feel so that you can turn it into scalable revenue streams, above and beyond the one-to-one delivery of the service, which is often the core of our business. But once you have something that's repeatable, you can do group workshops, you can license it to people, you can train people on it. Lots of fun things.
Ben: Sure. To condense that down a bit, it sounds like there are two sides to this. Focus and consistency. With those two things together, you can make more money with less effort, less energy expended.
Max: I would say strategic and focus.
Ben: Got you.
Max: Because if you’re a differentiator, if your focus is on writing blogs, that's the doing of something. A slight tweak will make that strategic, your content strategy, even blog strategy, which is slightly more tactical. But positioning yourself for the thinking, the knowledge, the plans, rather than the doing, the writing, the publishing, whatever it is.
The doing of things will become commoditized, it's more susceptible to new vendors entering the marketplace, and new people are being trained every day in those things. The strategy side is slightly more protected. You can charge whatever you want for it. People tend to give you a seat at the big boys and girls table.
Ben: Sure. It makes a lot of sense. So if you were meeting with a new client or another consultant, someone who was coming to you just asking for your advice on how they could follow a similar approach to the one that you've developed for yourself, how would you begin building the case to them to say that they should consider taking a productized approach toward their services?
Max: I think the first step is convincing people that one side of their business is sucking the life out of them, and one side of their business has a future like The Matrix. I think there's a new Matrix. I love The Matrix. There's a new one coming out.
The thing is, people have experienced the difference for themselves. The relationships in the agency world or consulting world almost always start out as strategic. In the sales process, you help your client make a decision, that's strategic. Then it becomes tactical, you become a replaceable vendor, and you get price shopped, or there's scope creep and it ends in disaster, you being replaced by somebody cheaper.
People have experienced the difference in delivering strategy and delivering implementation services. It's more profitable, you feel different about it, you're invited to the decision-maker table, and then it all gets worse after that. Step one is helping people understand that they have two different businesses and they're currently positioned for the one that's dragging them down, not positioned for the one that people actually want and need indispensable partners in that strategic area. Then after that, it's marketing 101.
What are you going to do? Be a generalist or are you going to focus? Are you going to be sought after in your industry? Are you going to have the benefits of a pattern recognition and running the same process over and over the operational efficiencies?
I don't think people are ever against the idea that you need repeatable processes in your business. That's business 101. It's the, where in the business should we focus our effort in creating those processes, creating those things and steps? Does that answer your question?
Ben: Yeah, it does. I think that makes sense. You're not just advising people to just do things a certain way just because it's going to be better just because. I like the way you're tying in the—I don't know the best way to put it. But it sounds like there's some cost-benefit analysis that comes into it or maybe not cost-benefit, but—
Max: Ben, here's what I find. Nobody argues with the fact that the strategy side of your business is more profitable, more fun, and positions you more strategically in the marketplace because of your relationship with your clients. Nobody argues with that. Nobody argues with the other side of the coin of you need to create processes around everything you do.
The thing that holds people back is the limiting belief that they can make an impact on their clients' businesses without actually doing the work. They believe that it is the doing of things that gets them paid. It's simply a limiting belief and it's a hurdle that when people get over it, they never look back, but it's something that holds everybody back.
I think it's a matter of fear and hunger. I think it is simply easier to sell the doing of things because that's what people are looking for for sure. You actually have to sell strategy. You actually have to sell the thinking, the plan. Once you do it, it's actually easier to sell that because you're not competing against everyone in the world to do it, but it's an emotional hurdle.
Ben: Right. I think that makes a lot of sense. Do you think that some of that comes from the fact that if you're a marketer or probably any kind of creative professional, your entryway into that line of work was by being a doer, and you probably became a doer because you had a passion for something, whether it was writing, design? Maybe you have some type of mathematical or analytical background, you just love digging into data, numbers, and spreadsheets.
Whatever end of marketing or maybe whatever end of sales you got into, that was the thing that sparked your passion. Letting go of that is really, really hard for a lot of people to do. Do you think that that's part of where that comes from?
Max: Yeah. I honestly hadn't thought of it that way before, but you're right. We spend a lot of time developing self-worth and an attachment to the thing that we're doing. Everybody starts in the doing, nobody immediately goes to strategy. It's not even morally correct.
At what point are you good enough? Do you look at yourself in the mirror and you say, I'm good enough to sell my knowledge, to sell my process, that's how good I am? That's a tough question. Nobody comes along and deems you worthy.
Usually, it's some life-changing event that forces you to sell your thinking, or some client comes along and accidentally hands you a contract for $50,000 and says, I just need the process. I have the people to do it. In my life, it was those 30 clients landing on my desk and saying, I don't have the people to service these clients. The only thing I can do is strategy. And then realizing that I could charge whatever I wanted.
HubSpot was saying, wow, this is incredible. You're turning these clients around. Can you teach other people how to do it? It was the sequence of events that happened after that led me to where I am today. To one day decide that you're worth charging more and doing less, that's tough.
Ben: Yeah. I think for myself, I can definitely relate to the internal struggle that comes with moving from being a doer to being a strategist.
Max: Imposter syndrome.
Ben: Yeah, for sure. Big time. You're absolutely correct that it's difficult, but that seems like that's really powerful, though, when you can show people a better future for themselves.
Max: I find the first time you experience it, you're cured. All limiting beliefs are gone. The first time you put a contract in front of somebody, there's no doing, not going to do this. I'm going to give you the plan, I am going to give you an actionable strategy, I'm going to facilitate the result without running onto the field and getting tackled by some 300-pound linebacker. I don't know why I went to a football analogy. I don't even like football that much.
The point is that when you get paid for strategy or a plan, and the client turns around and says, wow, this is incredibly valuable. Now I get to go make all the right decisions because you get that positive reinforcement. You go, wait a minute, that didn't take a lot of effort. That was actually the thing that I'm most passionate about, I could do that all day. Then you're cured.
It's the courage and the overcome of the fear and hunger to say, I am going to put the $10,000, $20,000 that I know I can get every day for writing that blog, building that website, or whatever it is. I'm going to put that at risk and I'm going to do something that I'm terrified of. But once you do it, you never look back.
Ben: For sure. If anyone listening to this conversation is interested in getting started with applying a productized approach to their consulting services, or even more broadly speaking, I think a lot of this conversation really could apply to anybody working in any creative field where maybe they're approaching a transitional point in their career. Where they might find themselves in a position where they have the opportunity to make the transition from being just a doer to move into a more strategic role, and then enjoying all the benefits that come with that kind of advancement.
I guess for anybody who is in a situation like that, how would you recommend they begin? Maybe the first thing, how would you recommend they begin just opening their mind?
Max: It's a very simple answer. I'll speak to the doers out there. I'll speak to the people that are already doing their own thing, they're making money, but they're doing the work. Charge for your proposals. Very simple concept. I'm not even encouraging you to convince yourself. You know that it's the right thing to do. But what we need to do is accelerate that first experience of you charging for strategy.
The strategic thing that you do today, if even all you're doing is writing blogs, managing an ad campaign, or building websites, the process that you go through to understand a client's needs, apply your knowledge, and deliver a proposal for what's going to give them the most value. That is strategy. That is the strategic process.
I tell people, look at their process for proposals. The proposal is the strategic deliverable, and the process is your service. You give it a name. It could be Ben's Super Secret Fargo process, that'll be $3000. Go out there and get some nos, because you're not going to get five nos. You're going to get four nos and you're going to get one yes that's going to change your life.
Ben: Yeah. That's very clear, very concrete.
Max: You can't mess it up. You can only just not do it. You can only just say like, that Max guy, Ben, I don't know, man, they're crazy. I'm not going to do that.
Ben: They might be correct in their assessment that one or both of us is crazy, but I think this sounds like pretty, pretty solid advice.
Max: Yeah. Even if it wasn't good advice, I'm convinced that you can sell anything to anyone if you try it five times.
Max: Five times, you'll figure it out. Two of them are going to do it their own way, two of them are going to do nothing, and one of them is going to do it your way. You really don't need to be that good.
Ben: So you can play a numbers game and eventually things should tilt in your favor.
Max: I've been on my own for six years. I ran the agency for three years. I'm a pretty young guy. So that basically accounts for my entire career. Regardless of how commoditized what I was doing was or how outlandishly well-positioned, regardless, you close one out of five deals. If you close more than one out of five, you're not charging enough.
Ben: Sure. That's actually an incredible conversion rate when you think about it. That's 20%.
Max: Opportunities. I define opportunities as they're fit. They're a good fit and they are interested in working with you. So if I give someone a proposal, one out of those five is going to close. I don't just give people proposals. They say yes, I would like a proposal for that thing that you do. In my case, it's productizing consulting services.
Ben: Got you.
Max: In that case, a lot of professional service organizations look at a lost deal. I gave you a proposal and I didn't win it as something was wrong with that proposal. That's not the case. You shouldn't win all the deals, you should win one out of five. That's what six years of interviewing sales consultancies have told me.
It's human nature. Two of them are going to do nothing, two of them are going to either try to do it themselves or do it with a different vendor that's cheaper than you, and one of them is going to go, I like you, Max, I'll pay you whatever you want.
Ben: So you're really trying to look for people who are clients that are really an ideal fit?
Max: Yeah. I think that's actually the most important question. Because if you follow the line of thinking here, if you're in the strategic realm and not the tactical vendor, then you get paid based on perceived value. That has nothing to do with what you're doing. It is 100% on what the client perceives the value to be.
The most important question is not what are you selling as long as it's strategic. The most important question is, who are you talking to? Because that could mean the difference of you charging $10,000 to $1 million. Guess what, folks, those strategies look exactly the same. I've seen them.
I've spent six years interviewing people that sell strategy. There's no difference between a $10,000 strategy and a $1 million strategy. The only difference is the million-dollar guy has more gray hair. That's it. The most important question and the most important thing that you can do for yourself is fill your calendar with conversations with people that will pay you the most for the thing that you are uniquely good at.
Ben: Sure. Makes sense. Once a consultant, marketer, solopreneur, creative professional, whatever title they might go under, whatever circumstances or situation they're working within, once they start to apply this approach to how they package, sell, and promote their services, and you've touched on this in a number of ways, but I think just to put a bow on things, how can they expect their business to change and their life to change? What's going to be the outcome that they experience by applying this approach that they would miss out on if they just didn't change anything at all?
Max: The surface-level non-interesting answer is you'll make more money. That's a given. You're in the price premium realm. You don't actually have to do the things. So you want to charge $50,000 for a five-hour process, sell strategy, perfect. You could do a lot of things and make a lot of money.
I think we're in this space, as consultants helping people grow their business, to make an impact on people while keeping our sanity. We want to have fun doing it. That's why we're doing our own thing. That's why we're not working for some boss that doesn't respect us. We want to feel fulfillment in limiting our sacrifice.
When you go from selling a bunch of things that you compete on and other people can do the one thing that you really feel confident like, this is my contribution to the world, how do you even begin to talk about the value of that? I am certain that this is my calling. This is what I'm here to do.
When I work with people, they say you're the best in the world at that. You might be the only person in the world at that, but you're the best. The clarity, the confidence, and all the challenges that come with doing your own thing, the risky thing is combated by your ability to simplify your business.
Ben: Yeah. I think that that's an awesome way to wrap up this conversation, which by the way has been fantastic. If people want to find you online, where's the best place for people to go?
Max: Maxtraylor.com, which is a funny story. I was running this agency and when I left my agency, I had some other crazy name for my company. Your company is you. Nobody's going to fire me for maxtraylor.com. He's actually a really nice boss. So you can find me at maxtraylor.com or beerswithmax.com. That's my podcast.
If you want a beer and a half, read in some opinionated opinions, you can pick up my book Agency Survival Guide, which to the disappointment of people that advise me on books, it is available for free on my website, maxtraylor.com. You can download it for free. It'll save you $3. That's all I have to say about that.
Ben: Very cool. I like that you described the length of the book in terms of how many beers you can get through before you wrap it up.
Max: Obviously, it depends on how many in-laws you got staying with you at the time.
Ben: Fair enough. Max, once again, this has been a fantastic conversation. Thank you so much for taking the time to come on the show and sharing your insights with our audience.
Max: I appreciate you, Ben. You're doing a good thing.
Ben: Thanks again to Max for coming on the show and to all of you for listening. That's all I've got for this week. Until next time, best of luck with your marketing.
Ben was the Inbound Marketing Director at CoSchedule. His specialties include content strategy, SEO, copywriting, and more. When he's not hard at work helping people do better marketing, he can be found cross-country skiing with his wife and their dog.