Episode 103 – How a Young 5-Year-Old Firm Became Consistently Profitable By Productizing and Automating The Service – Member Case with Julian Lumpkin

Many boutiques are conventional in their approach. They convert their expertise into a methodology and train staff members on how to use it. They are then reliant on expensive labor that ultimately constrains growth. The firms that accelerate growth take a different approach. On this episode, Julian Lumpkin, Co-Founder & CEO at SuccessKit, shares how they drove profitability by leveraging technology to streamline, productize, and automate their service delivery.


Greg Alexander [00:00:15] Welcome to the Pro Serve podcast with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that are not familiar with us, Collective 54 is the first mastermind community dedicated entirely to helping you grow, scale and maybe someday sell your professional services firm. My name is Greg Alexander. I’m the founder and I have the pleasure of being your host today. And on this episode, we’re going to talk about prioritizing your service in the rabbit hunting business. And I will explain that to those that aren’t familiar with our terminology in a minute. And what I hope to discuss with you and share with you that if you’re going to if your business architecture is one that says you’re going to have lots and lots and lots of customers. But each customer is going to spend a little time versus a business that says you’re going to have a small number of customers, relatively speaking. But each customer spends a lot. If that is your strategy, what I call rabbits versus hunters, then productize your service becomes incredibly important because the unit economics of delivery requires it. You know, if your clients are going to spend a little, but they’re going to do it over and over and over in kind of a volume model, then you need to productize a service. If each time you have to deliver for a client, you’re doing a piece of custom work. It becomes almost impossible to scale and to be profitable in that space. So we’ve got a great role model with us today. He’s a member of Collective 54. His name is Julian Lumpkin. Julian, it’s good to see you. And please introduce yourself to the audience. 

Julian Lumpkin [00:02:09] Thanks, Greg. It’s great to be here. My name is Julian Lumpkin. I’m the founder and CEO of Success Kit. We started the company six and a half years ago, and I’ve been running it ever since. 

Greg Alexander [00:02:18] It’s very good. And I should say, as a full disclosure, I am a happy client of Julian’s. Julian’s company produces case studies and testimonials, and we are in the community business and we often get asked, are your members happy? And it’s it’s nice to have before and after case studies to share with them. And that’s what what Julian’s company does. So, Julian, let me let me start off with kind of a 30,000 foot question, which is how did you create your service? How did you productize your service? 

Julian Lumpkin [00:02:57] I initially came up with the idea for Success Kit when I was the sales manager at a tech company. And what I realized while working with our marketing team is that there was one particular part of marketing content that was extremely important and extremely underserved course, and it wasn’t getting done, and that was case studies. So we can talk about how I was able to productize the service, but I think it really started with honing in on a problem, a very specific problem that I recognized from the very beginning could be process oriented. I looked at everything the marketing team was doing and so much of it was custom and difficult and there are some great marketing agencies can help with that. But I saw this one part that didn’t need to be ultra complex and didn’t need to be unique for every single company. It was very standardized and companies still weren’t getting it done. So I focused on that problem early, and that’s what led to our company being, you know, very productized in about 95% of the work we do. 

Greg Alexander [00:04:07] Okay. So you crystallize around a problem. I love that that’s always the place to start. And then you provide a solution to that problem, which is the steady production of quality case studies. I would imagine that. Marketing departments don’t have a big budget set aside for case studies, which they probably should, but they don’t for whatever reason. So did you. Was the next step that you said, okay, how much? How much is somebody going to be willing to pay for this? And then you reverse engineered your service model. I mean, how did you go from identifying the problem to figuring out what your solution is going to be? 

Julian Lumpkin [00:04:48] Well, when we first started, we identified companies that we would even putting the budget aspect it aside, really bought into the idea of having a high volume of case studies. Most companies know they need, you know, at least three, six or 12 case studies. But we started with power users, companies or leaders within a company that saw the value of making their case studies and their competitive advantage. And they wanted to get to 40 or 50 case study. So by doing that work for them early on, we essentially. Productized it for each individual client because we’re running the same project ten, 20, 30 times as we kept doing that for more companies. We? Realized and saw that even company at company, the process didn’t need to be that different. There are a couple of options they had upfront, but ultimately we could run that same process. But we learned about it by essentially doing the same or very similar project for the same company over and over and over again until it was until it was a type process. 

Greg Alexander [00:06:05] So starting with the power user, that makes a lot of sense. You know, somebody who wants 50 case studies is more valuable than somebody wants. One case study, of course. So let’s talk about how you structured the engagement and maybe we’ll use that hypothetical as our use case. So now you’re talking to a prospect and they completely understand the value of having case studies. They understand where to use them and their sales and marketing efforts. They understand that they need to be kept fresh, you know, with new case studies, that if you’re going to use case study, kind of bottom of the funnel to try to overcome objections as an example, they better be of the highest quality. Like they get all of that. When someone says, I want 50 of them, how would you structure your engagement? Because that’s part of the product design process. 

Julian Lumpkin [00:06:54] Yeah, it was always very important for me to not let success get become a regular marketing agency, and that’s based on the skill set that I had coming in and what I wanted the company to be. So when I started setting up these arrangements, people were used to dealing with marketing agencies where it was very customized, and then they would maybe agree to pay a little extra for revisions. From the very beginning, I knew I wanted a productized service. So what I said to my clients and we actually maintain this policy to this day, is we’re going to do an upfront. We’re going to do a flat fee per case study paid upfront. And that’s going to cover everything. And that will be and we’ll offer unlimited edits and revisions, no additional charges. And that allowed us to work with the clients, first of all. And. It made it easier for them to say yes to working with us because that’s not something they were used to hear from marketing agencies. And it also forced us to really productize our service because we weren’t custom making each proposal in terms of the deliverables and the pricing for the client. So it forced us to be productized from the very beginning. 

Greg Alexander [00:08:12] Okay. So I understand how you prioritize on the front end, you know, the way that you positioned it to the marketplace as an example and standardized proposals. Couple of choices. You want a you want be and then everything flowed from there, standard flat fee, etc. That makes a lot of sense and it does make it easy to buy in having someone who bought. So it was very easy to buy. Then you got to figure out how to deliver it. So was it did you create kind of a step by step color by numbers type of method to deliver the service? How does how does that work? 

Julian Lumpkin [00:08:49] We did and we in the very it earlier on, we were more flexible and we were getting more information about our clients requirements and being more customized, willing to customize it more. But ultimately, we were just concerned with delivering great work. So earlier on I was a little more willing to be customized, and then I would create a process for that specific company based on what you know, what they needed and what we’re doing for them. But as we progressed, we became comfortable enough in our recommendations that it became far less customized. And we could say anything that was different from our recommended process is an upcharge. So we really created it by being willing to be flexible in the beginning and act a little more like a kind of custom marketing agency. And then by doing that, we developed such strong opinions on what each of our clients needed when they when they came to us and told us a little bit about their company, that we were able to fit 95% of our clients into this productized service now, and only about 5% of them requiring customizations, not because they don’t come in with different ideas, but because we are the experts and we have strong opinions on what their content should look like. And that lines up with our our product offering, of course. 

Greg Alexander [00:10:24] Okay. So then you you handed off to the delivery team, like literally like what is the what is the thing? Is there a manual? Like, how does your team know what to do? 

Julian Lumpkin [00:10:35] Got it. Yeah. So from the very beginning, we managed everything in Trello. And initially we would create a new Trello board for each client. 

Greg Alexander [00:10:48] And for those who don’t know what Trello is. What is that? 

Julian Lumpkin [00:10:51] Trello is a a project management system where you can create a card and it has different steps and you can add different information to it. So in the very beginning when we were just learning how to do this, we would understand what our client needed, build out a little process based on what we thought it was going to take to get there. And we’d create a unique Trello board for that client, having the different steps in the process to create the content they needed. After 3 to 6 months of doing that and maybe ten of those boards, which is what I was saying before, we were able to get to the point where this process is changing so little that we can combine it all into one process. And that’s the same Trello board and process we use today and we have the ability to make small customizations on it. But the team member who’s working on the project can see very clearly this is the stage that it’s at and then it goes to the next stage, the next stage until it’s complete. 

Greg Alexander [00:11:53] Okay. For those of us who talk about this stuff for a living, we use fancy words. We would call that that that’s a tech enabled solution, which is the next piece of prioritizing your business. So we’re talking with Julian and we discussed, you know, he focused on a certain type of customer in pursuit of prioritizing his offering. That was a power user. Somebody that was going to need lots and lots of case studies. Then he talked about how he structured his engagements with the clients standardized proposals, 95%, the same shop, the shop paid up front, etc. Then we came back to the process itself so that, you know, average human beings can actually perform and deliver these world class case studies. And that was done through technology in this case an application called Trello. So that’s a blueprint for those that want to productize this service, for those that want to sell the type of engagement that Julian is selling, where it’s it’s relatively speaking, inexpensive, but it’s volume based. And if that is the business of that’s the customer set and that’s what they want, you can build a very successful, highly scalable services company if you follow those steps, if you prioritize. Because Julian, I would imagine in the early days you weren’t nearly as buttoned up as you are right now, and it was probably a lot more difficult to make any money in the early days. Is that accurate? 

Julian Lumpkin [00:13:17] Absolutely. We had to go through a real learning period. We wanted to. Get into the market by being a lower cost than a marketing agency was paying, was charging for case studies. We did not just want to become a marketing agency that did case studies. We wanted to be we wanted to show the world that we’d figure out a better, more efficient way. See case studies and their idea of what it cost to create a case study wasn’t true anymore. So from the beginning we had to offer low pricing before it was fully productized while we’re figuring it out, which was not particularly profitable. But now because everything is so standardized, like you said, I can have regular people do the process. If we needed to, we could sub different people in from the existing team, add to it very easily and more and more of it’s done by automation. So for example, now when each step is complete, since it’s the exact same for each client, we can have an automatic update email, go out to that client each time a step is complete without doing without lifting a finger and providing a great service. 

Greg Alexander [00:14:30] Yep. Now, when somebody reaches this point that you’re at right now, sometimes the next step they take is that they move the labor offshore. So it’s so standardized, it’s so automated that you could leverage a global talent pool and lower your cost to deliver even more. Did you experiment with that at all? 

Julian Lumpkin [00:14:56] It’s something that we are considering for certain parts of our process. What we do is very simple in some ways, but when it comes to a company’s case studies, it’s not just that we’re creating a $2,000 piece of content for them. They’re introducing us to their best clients. So from the very beginning, it was important for me to show new prospective clients that were not outsourcing the work to a whole bunch of different people where you don’t know what you’re going to get. So we want any any part of the process that is us interacting with the client’s client. So doing the interviews to be done by the same person or same small group of people that are likely going to stay us based. But once you’ve done that interview and you created the core piece of content, then there are other steps of designing it and repurposing it that are can similarly be productized and can be done by almost anyone. Those are the areas we’re considering offshoring. But our core service, we think it’s important to stay us based. 

Greg Alexander [00:16:09] Okay. And when you have this highly productized service, you can sell it to the client at a very attractive price point and still earn healthy margins. And that’s a win for the client. It’s a win for you. And normally what happens in that scenario, I don’t know if this has happened to you. I’d like to hear about this as that. That’s called demand elasticity. And what that basically means is as you lower the price, demand increases, for example, there’s probably a lot of clients out there that would love to have professionally created case studies, but have not been able to do it because it was cost prohibitive up to this point. They me, Julian, they’re like, wow, this is actually this is affordable. I can do this. So the market itself expands because of the lower price point. Have you seen any demand elasticity in your space? 

Julian Lumpkin [00:17:02] Absolutely. You’ve hit the nail on the head and appreciate the reminder to my economics degree from college. Yeah, it’s exactly what happens because case studies are the type of thing that. I don’t know too many B2B company owners that don’t want case studies. It’s always a time and cost tradeoff for them. If it was free, they would have every single one of their clients in a case study. So yeah, part of my offering and working with clients is showing them that they had to take an initial step because not necessarily the cost of buying the case study, but just bringing in a new vendor to talk to their biggest clients was a bit of a step. So I convinced them to take that step by showing them that once you’re set up in our system, this can be different. You don’t need to settle for just six case studies. We can get you 12, 18, 20 and 30 or 40 for a reasonable price. And I have clients who’ve gone on record and said, initially, we’re planning on getting to 3 to 6. You just kind of check the box and be solid there. But once we understood how efficiently and effectively you could do this, we opted to go to 20. And now we’re seeing the results of that. Yep. 

Greg Alexander [00:18:13] So this is a very, very important point. And it’s one that often doesn’t get spoken about when we talk about prioritizing a service. And let me spend a moment defining this point. This point is called economies of scope, which is different than economies of scale. Economies of scope in professional services says that the cost to sell. Goes down. When you’re able to sell the second and third product with one person. So I’m now selling to a client and I’m selling product X if I want to sell more of product X and I can do it by setting up the client in such a way that Julian is talking about. Then I effectively have one customer or client acquisition cost that now can be spread out over 50, 60, 70, 100 individual transactions. That’s called economies of scope and sales and marketing costs are expensive, and professional services, anywhere from 20 to 30% of revenue is consumed in pursuit of new clients when you consider time dollars, opportunity cost. So if you can set it up in such a way and you truly have a productized service where you have one expensive upfront client acquisition cost, but that cost then stays fixed and you now sell unit after unit after unit against that in perpetuity, forever. Then your client acquisition cost cost plummets and your profitability goes up. Now to pull that off, Julian, you’ve got to get your clients to consume at a rapid rate, which can always be a challenge. So how do you get somebody to go from three case studies to 30 case studies in a fiscal year? 

Julian Lumpkin [00:20:07] 3 to 30 in a year is really aggressive. We’re typically recommending people aim to get, you know, for our high volume clients like you’re talking about will typically say let’s get you somewhere between eight and 12 in the first few months and then try to move to a1a month after that. Now how we get them to do it? I always explain to people that I try not to be in the business or the position of convincing people that they need more case studies. Now, sometimes I push on this a little bit and I have some traction, but the vast majority of my business comes from people who already understand how important case studies they already want case studies. They just didn’t know there was an efficient and effective way to get them done. Right. So I will I can talk all day about how if you’re a sales rep, just how valuable it is to have a true repository of case studies instead of just a few good ones. So that is and this is what I’m trying you know, the CEO of a company, your sales reps there, they’re out there selling. They’re learning about what their prospects care about, what their challenges, what’s on their mind. You’ve probably already helped someone with that exact same problem. If you only have three case studies, it’s very unlikely your sales rep is going to be able to make that connection and show them that you’ve already helped with something like that. So I do sell this big picture idea of getting a repository of 20 or 30 or 40 case studies. Not only does it look great on your website, it allows your sales reps to sell on a more effective way. Mm hmm. I’ll I’ll talk about that. But mostly it comes from the person working with us already understanding that case studies are important, but getting to that volume is really important. And if they’re at that level, the alternative is hiring a content writer and devoting 20 or 30% of their time to case studies. And when they start to do that math and can compare it against it, they can see that not only is it effective to do case studies, you know, do get a few case studies done, but it’s effective to do it at scale with us. 

Greg Alexander [00:22:21] Yeah, you know, and we’re discussing here there’s a term for the business model. It’s called consumption based pricing. So let’s let’s use an example. Everybody could understand. Let’s say you got an Uber account and you have a credit card on file and you don’t pay Uber anything until you start riding around in their carts. You’re consuming it and then they charge you for that. This is a very effective monetization practice. When you are selling a product as offering. Like Julian, for example, he’s charging a flat fee on a per case study basis. So it’s consumption based pricing. Now, in that environment, the benefits of that are this when you sign a new client, you don’t have the sales difficulty of getting them to commit to a big deal upfront. They say, okay, I’ll try a few of them out and it’s a little investment and then they have a lot of success with it that salespeople are really happy with the case studies. Maybe their close rate goes up, they start making their number, etc., and they start consuming more and more and more of it. That’s called consumption based pricing, and that is the best monetization. If you are a services firm that’s selling a productize offering in that rabbit model, we have lots of clients, but each client only spends a little and you eventually get them to spend a lot by getting them to consume. That’s where the term, the name consumption based pricing comes up. You know, if I can, I’ll tell you why I bought from you is that in our sales motion, we would have a candidate for membership. Always say, can I talk to some members? And my members are super busy and I used to have to be a pain in their you know what, to get them to get on the phone with somebody. And they were happy to do it, but it was an inconvenience and I hated inconveniencing them. So once I got to case studies, I had to document it. And I would say to a candidate in that scenario, I got one better, you know, tell me what the perfect reference looks like. And then we would have a library of them and provided by you. And then we said we should share the case, study with them. Nine times out of ten that satisfies their need. On the odd case, they say, Hey, this is a very kind of, you know, sterile control type thing. I want to I want to get on the phone with somebody. But it dramatically reduced the effort that I needed to put in to do references. So that’s why I did it. All right, Julian, we’re at our time window here, but this was a great use case, a great interview to discuss how to productize your service in that rabbit type business. And you’ve done a great job with it. And I know that you’re going to have a bright future. So thanks for being on the call and thanks for sharing your story. 

Julian Lumpkin [00:25:03] Thanks for having me. It’s been an R&B on the podcast and it’s great to be part of Collective 54. 

Greg Alexander [00:25:07] Okay, great. All right. So for those of you that are not a member, but you want to meet really cool people like Julian and learn from your peers, consider applying for membership and you can do so at collective54.com. If you’re not quite ready to be a member yet, but you want to consume more educational content, check out Collective 54 Insights. And you can subscribe to that. Get a weekly podcast, a blog, you’ll get some benchmarking data. We even have a best selling book called The Boutique How to Start Scale and Sell a Professional Services Firm. I encourage you to do so. So with that, that’s the end of our show. And thank you for listening and I look forward to our next episode.