Companies that follow the specialization, verticalization, productization (SVP) formula make it easy for their buyers to buy from them.
Though the name sounds duller than a dishwasher, it could prove to be the most important piece of your sales and marketing revenue increasing strategy.
But first, a short history lesson…
Developed by Verne Harnish in his book, Mastering the Rockefeller Habits and Scaling Up, SVP is one of the best ways to differentiate your IT Services firm from your competitors instantly.
Here’s how it works:
- Pick 1-2 technologies in which to specialize
- Select 1-2 verticals in which to sell
- Offer your solutions as an SLA-based product
- Charge a flat fee for each user
Essentially, his advice is this: take your services and turn them into something tangible, like a product.
Okay, great, but seriously, why should I listen to Verne?
Because most clients understand and are familiar with buying products. This includes everything from the product’s value to how it’ll help their client to the product’s lifecycle is infinitely more tangible than buying services.
On the other hand, services can get complicated and overwhelming fast. Add to that, the company who purchases your services now has another partner relationship to manage for timely and quality delivery of said services.
Also, the benefits and results of the services they purchased often take longer to receive and require creative measurement. And, at times, refinement or even finagling. This all sounds like more time and money spent in the ears of your buyers.
So, make it easier for your clients to buy services from you by productizing them. You’ll make them, and your sales team, even happier.
Here’s a real-life example:
Let’s say your IT Services firm has expertise in Microsoft’s Cloud stack. Not only do you know your stuff, but you can deliver on it like no other IT firm in your region. Even better, you have experience in offering and delivering this Microsoft Cloud stack specifically to healthcare practices and manufacturing facilities.
To better serve your clients, while also capitalizing on your niche expertise, you start charging, $200 per month per user in true SLA-based or MRR. This type of simple, flat fee per service per user billing makes sense to clients. And it prevents you from nickel and diming them to death.
This specialization approach puts your IT Services firm in the top 20% tier of your peers. It also provides the fuel to dramatically accelerate your revenue and profit growth.
IT Services firms and Microsoft partners that successfully implement the SVP formula create new opportunities to grow their businesses in ways that weren’t accessible before. In addition, companies that successfully implement this model are in high demand and commanding a premium financial valuation when seeking growth dollars for M&A purposes.
SVP provides your IT Services firm with sales and marketing that’s easier to execute, and even easier to sell.
Other important takeaways from Verne’s book and methodology for professional services firms include the following:
Growth only happens with a focus on sales and marketing. The most successful tech companies will need a comprehensive plan to market themselves, with a regular stream of content being produced that educates and engages your ideal buyer.
Hyper-specialize for instant growth. In the competitive world we live in, you must differentiate yourself by specializing in an industry, vertical, and a specific solution. The goal is to become the number one IT firm in that specialty, which makes you stand out among your competition and bestows a competitive edge to your clients through working with you.
Avoid the AFAB (Anything-For-A-Buck). While you have an ideal buying persona, you also have a negative persona that you should run from. These are buyers who have money to pay but don’t align with your mission, vision, values or lack the maturity level to follow through and benefit from your IT recommendations and advice. Stop AFAB-ing or you’ll risk harming your reputation and company goals in the long run.
How can you start SVP-ing like a pro?
First, you’ll need to make sure that you have your brand voice, identity and messaging clearly dialed in. It’s hard to sell anything if you don’t have a firm grasp on who you are and what you offer.
Our best way to accomplish this is by employed the StoryBrand 7-part framework, which helps you craft your story, dial in your voice, better understand your services and then how to productize them.
If you’re looking for help in this process, we’d love to connect.
Our unique brand voice, identity and messaging process will help you avoid the pitfalls of being a generalist while working with a marketing group that’ll challenge you to grow.
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