Understanding High Touch, Low Touch, and Leverage in Your Product Mix
In today's business landscape, it's important to have a diverse product mix that caters to different types of customers. However, creating a product mix that works for your business can be a little tricky. In this article, we'll explore the concepts of high touch, low touch, and leverage, and how they can help you create a product mix that works for your business.
📝 Table of Contents
- Understanding High Touch, Low Touch, and Leverage
- The Four Quadrants of High Touch and Low Touch
- High Touch Sales and Delivery
- Low Touch Sales and Delivery
- Moving from Custom Projects to Productized Services
- The Power of Leverage
- Creating an Annuity with Low Touch Products
- Conclusion
Understanding High Touch, Low Touch, and Leverage
Before we dive into the specifics of high touch, low touch, and leverage, let's define what these terms mean. High touch refers to products or services that require a lot of interaction between the seller and the buyer. This can include things like custom projects, where the seller has to work closely with the buyer to create a tailored solution. Low touch, on the other hand, refers to products or services that require minimal interaction between the seller and the buyer. This can include things like ebooks or video courses, where the buyer can purchase the product without any interaction with the seller.
Leverage, in this context, refers to the ability to create products or services that can be sold multiple times without incurring additional costs. This can include things like ebooks or video courses, where the seller can create the product once and sell it multiple times without any additional work.
The Four Quadrants of High Touch and Low Touch
To better understand high touch and low touch, let's look at a four-quadrant graph that splits products and services into different categories based on their level of difficulty to deliver and sell.
In the graph, the vertical axis represents the level of difficulty to deliver a product or service, with the bottom being very easy and the top being very difficult. The horizontal axis represents the level of difficulty to sell a product or service, with the left being very easy and the right being very difficult.
High Touch Sales and Delivery
Most software developers operate in the top right quadrant, where they have a relatively difficult sales process and a high touch delivery process. This can include custom projects, where the seller has to work closely with the buyer to create a tailored solution. While this quadrant can be lucrative, it can also be challenging, as it requires a lot of work to sell and deliver the product.
If you're currently operating in this quadrant, the easiest place to move is to the left quadrant, where you still have a high touch delivery but you make your sales process much easier. This can include offering a productized service like a roadmap, which is presented as a product and has a relatively fixed scope regardless of who buys it.
Low Touch Sales and Delivery
Moving down to the bottom left quadrant, we find things like info products, which are relatively easy to sell and deliver. This can include ebooks or video courses, which are the kind of things that almost approach an impulse purchase type of decision for the buyer. While the prices are usually lower in comparison to other offerings, the seller can resell each of those things without any incremental cost on their part, giving them leverage.
Moving from Custom Projects to Productized Services
As mentioned earlier, moving from custom projects to productized services like a roadmap can make your sales process much easier. This is because the sales cycle is very easy compared to a custom project, as you don't have to do a quote. You can just describe what is included in the project, and it's a relatively fixed scope regardless of who buys it.
Once you've got experience selling a product in the top left quadrant, it becomes easier to move down to the bottom left quadrant and start to sell things like ebooks or video courses based on your experience with a wider number of customers. This can help you create a powerful focus for some sort of info product that you know is going to sell because you've been selling the done-for-you versions in the top half of the graph.
The Power of Leverage
Creating low touch products like ebooks or video courses can give you leverage, as you can resell each of those things without any incremental cost on your part. This can create an annuity, where you're making money from those products without having to do any additional work. While it may seem like a waste of time to spend 100 hours writing a book that you're going to sell for $20, it's important to remember that things that have really low touch sales and delivery give you leverage.
Creating an Annuity with Low Touch Products
Creating an annuity with low touch products can be a powerful way to build up your business. Even if you're making just a thousand dollars a month from this annuity, it can add up over time. This is the equivalent of having $500,000 under management that's throwing off dividends to you. So, don't discount low touch products as you flush out your product mix.
Conclusion
In conclusion, understanding high touch, low touch, and leverage can help you create a product mix that works for your business. By moving from custom projects to productized services and low touch products, you can make your sales process much easier and create an annuity that can add up over time. So, take the time to consider your product mix and how you can leverage it to create a successful business.
Highlights
- High touch refers to products or services that require a lot of interaction between the seller and the buyer.
- Low touch refers to products or services that require minimal interaction between the seller and the buyer.
- Leverage refers to the ability to create products or services that can be sold multiple times without incurring additional costs.
- Most software developers operate in the top right quadrant, where they have a relatively difficult sales process and a high touch delivery process.
- Moving from custom projects to productized services like a roadmap can make your sales process much easier.
- Creating low touch products like ebooks or video courses can give you leverage, as you can resell each of those things without any incremental cost on your part.
- Creating an annuity with low touch products can be a powerful way to build up your business.
FAQ
Q: What is the difference between high touch and low touch?
A: High touch refers to products or services that require a lot of interaction between the seller and the buyer, while low touch refers to products or services that require minimal interaction between the seller and the buyer.
Q: What is leverage?
A: Leverage refers to the ability to create products or services that can be sold multiple times without incurring additional costs.
Q: What is a productized service?
A: A productized service is a service that is presented as a product and has a relatively fixed scope regardless of who buys it.
Q: How can I create an annuity with low touch products?
A: By creating low touch products like ebooks or video courses, you can resell each of those things without any incremental cost on your part, creating an annuity that can add up over time.
Q: What is the easiest way to move from custom projects to productized services?
A: The easiest way to move from custom projects to productized services is to offer a productized service like a roadmap, which is presented as a product and has a relatively fixed scope regardless of who buys it.
Resources:
- [Value Pricing Bootcamp](https://valuepricingbootcamp.com/)
- [Concierge Medicine](https://en.wikipedia.org/wiki/Concierge_medicine)
- [Dr. Spock's Baby and Child Care](https://www.amazon.com/Spocks-Baby-Child-Care-10th/dp/1476767949)
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