If you lead an expert services firm, a digital product should be at the forefront of your strategy.
Historically, digital product based businesses have been difficult to start, but easier to scale. With recurring revenue baked in, they can grow very profitably. But the expense made it so only venture-backed startups or big enterprises could take them on.
Today, that’s no longer true. Design and development is increasingly more efficient. The rapid advance of artificial intelligence has sped up the timeline, unlocking easier access to digital product development. The proliferation of niche digital products will change how you compete for customers and what customers will come to expect from you.
Below, we have compiled the most compelling ways — along with specific examples — digital products can make a deep and lasting impact on your business.
A Digital Product Allows Your Company To…
Reach a wider audience.
A digital product can massively increase your reach, allowing you to serve many more customers. Services companies are limited in how many customers they can serve because they’re traditionally labor intensive. Your company has only so much bandwidth to work directly with your customers.
With a digital product, your ability to reach a broader audience is exponentially greater. Using a digital product leverages your expertise without adding staff or workload.
Example:
At Archer Career Services, the founder built a business as a career coach for undergraduate college students. She developed a process for students to follow to help them prepare for interviews and applications to graduate schools or jobs upon graduation.
However, she could only work with a few dozen students at a time. She approached Highland about the idea of distilling her process into a digital product. Highland helped Archer develop a product that could be sold to colleges and universities and serve an unlimited number of students.
Now a digital-only company, Archer Career Services serves over 20,000 students and counting.
Create recurring revenue.
If yours is like most expertise-based businesses, you charge for your services based on time and material. It might be by the hour or by the project, but that fee arrangement typically means you are going from job to job without a consistent and reliable revenue stream.
That unpredictability makes it difficult to properly budget, hire, and grow. A digital product can provide income stability and predictability, unhooking revenue from linear time and effort.
Example:
Program Productions is a specialized staffing production in Chicago. The company primarily arranges the staffing of crews for TV productions and other events. They work with a pool of freelance, unionized laborers and operate as the middleman between the workers and the production companies, handling contracts, scheduling, and payments.
The company came to Highland with an idea for an app that could handle both sides of these relationships: the workers and the companies that need to hire them temporarily. Staffers could see the available gigs, and companies could put out a call for crews. The app would send out reminders, track hours, and process payments.
The ProCrews app was so successful the company began leasing it out to others, and it is now a separate business entity for Program Productions.
Unlock new customers.
Today you’re likely only servicing a percentage of your potential customers; sometimes only the biggest customers can afford you. What about a smaller company or individual who might only need or afford a slice of your services?
A digital product allows you to create a more customized, a la carte menu of your offerings to serve smaller customers without additional staff to expand your potential market.
Example:
Genioo is a global management consultancy that primarily works with larger, more established, companies. As a premier consultancy, they rely on direct communication, interaction, and hands-on work to deliver projects for clients.
Genioo saw the potential for a new kind of project management application: one that would combine best practices along with access to resources and expertise. The company wanted to reach a broader customer base with a digital product.
Working with Highland, Genioo developed a subscription-based project management product based on their decades of expertise, distinct from existing task-management software offerings. The result is a recurring revenue source that can serve many more types and sizes of businesses than Genioo's current consulting clients.
Augment your current service offering.
A digital product can fill in gaps or provide additional synergies alongside your current offerings. In the course of providing your services to your clients, you might discover something else that you could be providing. A digital product can help you derive a new source of income from existing customers.
Example:
Creative Group, a corporate travel, experience, and event company, saw an opportunity to create a digital product for their customers. The core of their business had been tied to various employee and customer incentive programs. Why not expand to design and deliver those incentive programs themselves?
Working with Highland, Creative Group created a digital product to expand their existing offering and create synergies. Highland helped the company build an app to facilitate incentive programs, allowing employees to earn points and redeem them. The timing was fortuitous, given how the COVID-19 pandemic disrupted the entire travel industry.
In a little over a year of active development, Highland launched a platform that could out-compete incumbent platforms with decades of development from dozens, if not hundreds, of software engineers. The distinctiveness of the platform allowed Creative Group to capture market share in the midst of the 2020 pandemic.
Create more value in your company.
However successful your company has been as a conventional service provider, a digital product can lead you to a more reliable revenue stream, greater profitability, and more attractive valuations for investors.
Example:
Treatment, an AI-diagnostic company, wanted to provide consumers with powerful health and wellness tools. The innovative healthcare technology company develops advanced artificial intelligence (AI), and they knew they had the makings of a healthcare app unlike anything else on the market.
They had developed a powerful diagnostic AI and wanted to give consumers a health and wellness experience that puts healthcare into their own hands. Highland’s successful MVP launch got the company to a $60M IPO.
Your Company’s Future Should Feature a Digital Product
We are not suggesting you need to build the next killer app or bet your entire company on a single big idea. You can start with a nugget of a notion of what you might build.
Think about which portions of your business best translate into a digital product, who else could benefit from your expertise, or other tools your existing customers say they would use.
You can start small and go from there. If you’re interested in discussing how a digital product can take your services business to the next level, we’d love to hear from you.
