9 min read · Written by Grant Rayner on 20 Dec 2023
Share by emailOver the past few weeks, I’ve focused on different products and services you can consider as an independent security professional. Several times I’ve touched on the concept of ‘packaged services’.
A packaged service is a product that you would traditionally deliver as a service. However, instead of delivering the service to a single client as part of a consulting project, you prepare the product in such a way that it can be used by multiple clients, and package it in a format where it can be accessed online.
The premise of packaged services is to offer a service, that you would traditionally offer to a single client, to multiple clients at a lower cost than if it was a single client engagement. Your clients benefit from gaining access to a high quality service at a fraction of the cost than if they were to commission the work themselves. Assuming you’ll be able to sell the packaged service to multiple clients, you should benefit from higher revenue than you would have had, compared to if you delivered the service to a single client.
As an independent security professional, packaged services provide you an opportunity to increase revenue by scaling your services.
I’ve been experimenting with packaged services for a few years now, with some success. They are now a key part of my approach to delivering services.
In this article, I’ll provide some characteristics of effective packaged services, share some approaches to developing packaged services, and provide some thoughts on pricing. I’ll conclude by considering how to distribute your packaged services to your clients.
There are several services that lend themselves to be effective packaged services. Here’s a few characteristics of effective packaged services:
However, bear in mind that your clients won’t necessarily be active in all countries. Looking at my own experiences this year, I didn’t bother developing a packaged service based on work I did in Laos. The demand wouldn’t be there.
Now that you have a clear understanding of the characteristics of a packaged service, it’s useful to explore the different approaches you can apply to developing packaged services.
There are a few approaches you can take to developing packaged services. You could either start from scratch or build on existing work. You could also create a series.
The first approach to develop a packaged service is to build something from the ground up.
If you decide to take this approach, you will need to be confident of client demand for the product. You don’t want to invest several weeks of your time and energy developing a product only to find there’s insufficient demand to cover the cost of your time.
The disadvantage of building a packaged service from the ground up is therefore the amount of time you’ll put into the product, and the uncertainty that you’ll be able to recoup the money associated with that time.
An alternative to building a packaged service from the ground up is to build on existing work.
A great approach to develop a serviced product is to build on existing work. In this scenario, you’ve already been engaged by a client on a consulting basis to do a piece of work. Once you complete the project, you repackage the work into a packaged service.
The key advantage to building from existing work is that you’ve already been paid for most of the content. Whatever you earn from selling your packaged service is going to be mostly profit.
It should go without saying that you shouldn’t simply recycle client work. You need to be careful to ensure you don’t include any information specific to one client. You should also add to the work to provide a more robust product.
As a related point, your approach to consulting in general should always be to build on the work produced during different projects. If you develop a high quality framework for one client, you should absolutely be considering which other clients may benefit from that framework. The new knowledge and insights you develop during each consulting project, and your ability to apply that knowledge and insights to new projects, is the foundation of your competitive advantage as an independent security professional.
Expanding on the options above, an effective approach is to create a series of related packaged services. If you developed a packaged service focused on a specific subject in one country, you could develop additional packaged services focused on the same subject in other countries.
Examples of packaged services that would work as a series includes assessments of hotel safety and security, assessments of vendors, or contingency plans. These meet the criteria discussed earlier and you’ll find there is widespread demand for such work provided the deliverable is of a high quality.
The advantage of a series is that it allows you to tap into your existing clients. If a client purchased a packaged service relating to a particular subject, they may also be interested in purchasing others. This approach is also efficient, in that you’ll be able to re-use the same approach and probably even the same templates.
Let’s move on to look at different approaches to pricing packaged services. I’ll then wrap up by addressing how you can distribute your packaged service.
Overall, you have two options when it comes to pricing your packaged services. The first option is to charge your clients a one-time fee to access the packaged service. The second option is to charge your clients on a subscription basis. Let’s explore the pros and cons of each approach.
Charging a one-time fee is appropriate in cases where your packaged service isn’t going to be updated. There will be upfront time and effort to develop the packaged service but once it’s developed, there won’t be any ongoing work.
If you charge a one time fee for a packaged service, you’ll need to calculate your target price based on the time it took to develop the product and your estimation of the number of clients that will purchase the product.
The first step to determine your target price is to work out how much time it took to develop the packaged service. Once you’ve done this, multiply the number of days by your average consulting rate and then divide this by the number of clients you believe are likely to want to purchase the packaged service. You may then decide you can charge more or less than your target price based on the value your packaged service provides.
As an example, let’s say you spent 5 days on the ground in a location preparing an assessment. You then spend another 3 days writing up that assessment and getting it into a presentable format. Based on an average daily consulting rate of $1,500 a day, the cost of the packaged service is $12,000 (8 days x $1,500). If you’re confident you can get 20 clients to pay for your packaged service, your target price would be $600. However, if you only think you can get 10 clients, your target price would need to be $1,200.
Following this example, you could also decide that $600 is too low given the value you’re providing. To better align your provide to the value your serviced product provides your clients, you could increase the price of your packaged service to $800, $1,000, or more. The price ceiling will depend on your customer’s perceived value of the product. Remember that the entire premise of a packaged service is that clients gain access to a solution, for a fraction of the price they would have paid had they commissioned the work themselves.
I make this point clear when proposing my packaged services to clients, reinforcing the price they would pay for the same product on a consulting basis.
Let’s say you decided that $800 is a reasonable price and you were able to sell your product to all of your 20 clients. Your revenue would be $16,000. Had you delivered the same work to a single client (8 days x $1,500), you would have earned $12,000. You’re $4,000 ahead.
In the above examples, I haven’t factored in time for marketing and ongoing administration. You might decide to include additional time into your pricing model to take into account these additional commitments.
Now, let’s say you’re building on work you’ve already completed as part of a project that a client was paying for. Even if you take this approach, there will still be work to be done to prepare the product to be a packaged service that will have utility to multiple customers.
If that additional work turns out to be 3 days, based on an average daily consulting rate of $1,500 a day, the cost of the packaged service is $4,500. Again, you believe you can convince 20 clients to pay for the product. Your target price based on the additional work alone is only $225. However, that price is so low that it probably sends a message that the quality of your packaged service is poor. In addition, if the original client work involved 5 days of work, that’s $7,500 of value already captured in the packaged service.
A better approach would be to apply the same approach to pricing as before. The key difference is the profit you’ll realise from the project. Following the earlier example, let’s say you decided to price your packaged service at $600 and were able to sell to 20 clients. Your revenue would be $12,000. However, in this case, you would be earning an additional $7,500 (vs $4,000 for the ground up approach). That’s the benefit of the packaged service model. The more clients that purchase your packaged service, the more you’ll benefit from these economies of scale.
The approach I take to pricing packaged services is to base my target price on 5 sales. The prices for my packaged services range between $1,200 and $2,500. In all cases, my packaged services build on prior work. As all of my work relating to packaged services requires travel, I’m also very careful to ensure I recoup travel costs in addition to my time.
Another consideration I apply when considering the upper limit to pricing is to ensure the price is within the threshold of most corporate credit cards. By doing so, I’m avoiding the additional hassle of having to go through corporate procurement processes. As a side note, sometimes a small project like this provides you the opportunity to get on a company’s books as a vendor. Doing so may provide advantages in the future.
If you’re likely to be updating your packaged service over time, you can consider a subscription pricing model.
If you’re providing ongoing value by updating and improving your packaged service, you could offer it as a subscription product. You could, for example, charge clients $125 a month to access the service, bringing in a total annual revenue of $1,500 per client. You could also offer a discount for subscribers who pay for a year in advance.
A key advantage of a subscription pricing model is that you earn a steady income over time. There’s also the potential to earn more over time than if you applied a fixed-price model. For example, if you were going to charge $2,000 for a packaged service, you could charge $125 a month for a subscription. Charging $125 a month for subscription would allow you to hit your target price in 16 months. Additional revenue from month 17 onwards would be in excess of your target price.
There are some risks to be aware of with subscriptions. If you’re charging on a monthly basis, be prepared for a client to sign up for a few months, extract the information they need, and then cease their subscription. You would then lose the benefits described above. This is one reason why I’ve tended to avoid subscription models and ask for payment up front.
In addition, you must provide ongoing value to justify the ongoing payments. You should be making updates and improvements at least once a month. The time spent on these activities may detract from other work. If you’re unable to get enough subscribers, you may find yourself working for free every month keeping the packaged service updated to meet your obligations to a handful of subscribers.
Before closing, it’s important to consider how you will distribute your packaged service.
Once of the most important aspects to consider if you’re interested in selling packaged services is to determine a means of delivering the product to your clients.
You will have to deliver the product in an online format. You will also need to ensure only paying clients can access your product. You might even decide that you want your product to be interactive, for example, by allowing your clients to comment.
The tool I use for packaged services is Notion. Notion allows me to invite specific individuals to a workspace. I can also allow these individuals to comment or edit the pages. Overall, I’ve found Notion to be an excellent solution for this purpose.
Alternatively, you could develop a report in PDF format and make that available for download. To me, that’s almost more of a book than a packaged service. When I prepared contingency plans for Taiwan, I published these as a book and also provided an online workspace as a packaged service. You can learn more about this approach here.
To wrap up, packaged services are a good solution if you’re finding it difficult to scale your services. By building on prior work to build packaged services, you’ll be able to provide a larger group of clients with access to your work. Importantly for your business, you should be able to earn revenue in excess of what you would had you delivered the same service to a single client.
For those of you that celebrate, wishing you and yours a happy Christmas!