We offer several services to clients around teambuilding, organizational assessments, and leadership and culture transformations. We occasionally introduce new services and products but are unclear which ones will be winners because each seems to have some clients who like them. How can we tell which ones to invest in and which to drop if they all sell reasonably well?
There are emotional and logical aspects to this problem. First, you developed a new service because you saw a need in the marketplace and/or you had a capability and a passion to provide a service. Your company committed resources to its development and market testing then, with high hopes, you launched it to at least modest success. This is the emotional part, having invested both desire and hope into a new way to provide services.
The second, logical, part is the financial aspect of running your business. You are a consultant because you want to help clients improve their leadership and culture, but you do so as a business. In any "helping profession" like management consulting, many of us would provide the services we do for free if we were independently wealthy. Hence the quandary when we deliver a service in which we are emotionally invested but one that does not produce much in the way of profits. The trick is to set up the conditions for deciding to invest or terminate before you launch, and stick to them. Tip:
Part of your planning for a new service must be the profitability of that service. If you are selling a service at a bare minimum, you are starving other services for which you could be making a much larger profit - and whose value to clients is much larger. Two points. First, you need to really understand how much a service is costing you to provide. This means tracking full costs of marketing, administration, and delivery and weighing this against revenues and risk. Second, set some standards for how you will evaluate your service's profitability and when. Usually, if you don't have a demonstrably successful product launch (when enthusiasm is highest and you target your best prospects) the likelihood for increased profitability is lower. Be realistic about your natural inclination to think "costs will decrease with experience" and “more clients will come once they hear about this service." This may be true, but if your service doesn't make the grade with your best shot, drop it and improve your most client-valued services.© 2009 Institute of Management Consultants USA