“Work smarter, not harder”
While this well-known phrase has been with us since 1930, all thanks to the industrial engineer Allen F. Morgenstern, many can confirm it’s easier said than done. In many cases, you have to work both hard and smart, and in others, the work can’t be simplified even more.
But once the opportunity to work smarter shows up, you should instantly seize it right by the throat.
Productization is one such opportunity. If you’re working in professional services — which are fickle, intangible, and particularly vulnerable to economic disruptions — struggling to achieve steady, predictable income should sound familiar. Working overtime and having to start from ground zero with each client should also ring a bell. Not to mention how difficult growing your business seems to be — you’re buried in too much work to figure out how to scale.
If you’ve been nodding your head and sighing while reading that paragraph, this article on how to productize a service is dedicated to you. Hopefully, with its help, you’ll be able to optimize your service business enough to finally go on that vacation you’ve been dreaming of for the last few years.
Productized Services: Quick Brief
If you’re hearing about this business model for the first time, we’ve got your back.
A productized service is a service that comes with both fixed scope and price. All terms and conditions are set in stone, so that all potential customers know what they sign up for. In result, the sales process decreases, reducing the back-and-forth that comes with discussing the scope and negotiating the price. From the customer’s perspective, it’s easier to compare services that are described in detail rather than inquiring after each one.
Moreover, most productized services are offered in the form of packages. For example, as a digital marketing agency owner, you can offer content marketing. But instead of leaving a vague proposition of collaboration, you can specify your responsibilities: like delivering a 1000-word blog article for $400. You can go one step further and offer recurring services, like 5 articles per month for $1600. If you’re not sure what number of articles would be attractive to most clients, you can diversify the offer by offering three tiers, each with different scope and price: basic, standard, and premium.
So how can you create a productized service for your own business? Follow this guide to find out; this process is more difficult than it seems at a first glance. A rookie mistake would be to jump right in — a seasoned professional would lay down some groundwork first.
Know the Industry
First of all, you need to get to know the industry you want to attack first. Many sectors will be extremely hard to break into, be it because of fierce competition, an almost monopoly state, or the humongous costs required. That’s why you should carefully consider the risks, benefits, and prerequisites of each sector that sparks your interest.
As you may discover, most industries are already oversaturated with all sorts of companies, agencies, and freelancers alike. So it might be extremely difficult to actually find a place for your service business. Our answer: you need to go deeper.
Nowadays, finding a niche is more of a must than a need to stand out (although you get that too). By offering very specialized services, you severely reduce your direct competition. It’s true that at the same time you limit your target audience, but its quality should be actually higher. If you’re one of the few who offers a unique value proposition, more people will choose you.
Also, by specializing you show yourself off as an industry expert. Customers will more likely place their trust in a specialist than a generalist, because claiming to be great at everything isn’t that believable. If your problem is peculiar and one-of-a-kind, you’d rather go to someone who knows these issues like the back of their hand.
As an example, Dr Katarzyna Kaleta, a law firm owner, specializes specifically in fighting — and winning — with all the injustices brought by the Polish Social Insurance Institution. She’s so well known for that fact alone that whenever anyone brings up any issues with that Institution on Linkedin, she’s immediately mentioned. More often than not, by many different people at the same time. It’s a giant proof of Dr Kaleta’s trustworthiness, credibility, and skills that are sought-after.
Stalk the Competition
Once you’ve figured out your playing field, it’s time to meet the players.
Learn as much about your competitors as you can. By doing so, you’ll notice certain patterns that are true for most of them — from how they present themselves, what channels they use for promotion, and what they offer, exactly. Not only will this help you grasp the unspoken rules that reign over the specific industry, but also come up with ideas to stand out from the crowd.
Moreover, many business and agency owners alike have an active presence in social media, posting thought leadership type of content. This can include insight into behind the scenes of their business, reminiscing over the mistakes they’ve made over the years, sharing their successes and failures. Again, this can give you some inspiration and clues as to what you should and shouldn’t do — after all, it’s better to learn from other people’s mistakes than your own.
You can go one step further and impersonate a client in order to figure out the customer experience your competitors deliver. You can note such things as response time, helpfulness of the support team, level of personalization in communication, and many other things that make customer experience unique.
So don’t be afraid to get close and personal with service businesses that make your competition — there are only benefits that can come from that approach, as long as you stay objective, critical, and have an analytical mindset turned on.
Understand Your Clients
The biggest mistake you can make is to create a service nobody needs. And then dig yourself an even bigger grave by trying to sell it anyway by coming up with fake problems.
You need to know exactly who your target market is. And it’s not enough to create imaginary, ideal customers profiles and pray they’re correct; as with your competitors, you need to get more personal than that. How can you achieve that? Through research!
First of all, you can use your network and ask around if anyone’s ever been in need of such a service. If yes, you can ask in-depth about their experience, the choices they’ve made and why. If someone reached out to your direct competitors, even better. Then, you can hit up popular social media and other platforms; see what people say about your competitors, their praise and complaints. You can do that by joining specific groups, channels, and conversations.
You can top that up by creating your own surveys and posting them in proper spaces. This way, you can discover the most common behavior of your target group, their pain points, spending habits, and needs. Note though that some findings might be contradictory, and also that there might be a dissonance between how consumers act and think.
That’s why it’s also prudent to look for already existing research that touches on your industry and consumer behavior, which might have more objective findings. Although because of how turbulent the world’s been in the last few years, they might be slightly out of date.
So now you know the first stage of setting up your own productized service: researching to hell and back the chosen industry, direct competitors, and their clients. Most importantly, you should have noticed how common productization is in your niche by now — is it a standard everyone follows, or is it a rarity? Or are there hybrid solutions that lure potential clients in with packaged offers, only to discover there are forms to fill out anyway?
Once we’re armed with this hardwon knowledge, we can finally create a productized service of our own.
Choose Format & Structure
Depending on your service, you can tailor a suitable format that fits your business best. After all, we wouldn’t like to change it beyond recognition and create a Frankenstein of a productized service.
For example, if you work in traditional consulting services — that is, you’re offering knowledge for sale — you have many possibilities to consider. If you dream about the most passive form of income (which, mind you, doesn’t necessarily have to be stable), creating ebooks and courses might be your alley. They’ll require lots of time and effort from you at the start, but once they’re ready, you won’t have to do much besides promoting them.
You can combine the two formats by offering three tiers of productized consulting. The first one could be just the ebook with any other bonus materials, the second one could offer both the ebook and the course, and the last one would add a personal consultation on top of that for the highest price.
On the other hand, if you offer marketing services and would love a recurring revenue, consider a subscription model. This could work for long term business relationships where instead of billable hours you offer monthly plans of your services. For example, you could offer 10-hour, 20-hour, and unlimited services per month for a specific price, with the option to buy additional hours anytime.
No matter which productized services model you choose, remember that in the end, you should keep it simple. Offering millions of options will only delay your client’s decision and or even discourage them entirely if the process is too complex. So make sure that your chosen format and structure is straightforward enough that even a drunk user could understand this.
Upselling, Cross-selling & Discounts
But we wouldn’t want our productized service offering to be bland, do we?
In order to sweeten the deal, we can offer some extra treats in the form of upselling & cross-selling strategies as well as discounts. We’ve already introduced a form of upselling — by offering a better, more premium version of our service where we offer more hours per month or include a 1:1 meeting on top of a course.
If we try to entice our customers with another successful productized service entirely by promoting it in the checkout, send a promotional email after a purchase, or post it anywhere else with the caption “you might also like”, then we’ve applied a cross-selling strategy. That is, we try to persuade the clients who have already made a purchase to buy something else in order to increase customer lifetime value.
Then, we can also offer all sorts of discounts. We can lower the price, add a freebie, or offer a whole bundle of services for a better deal. Be careful though — don’t go overboard or else you’ll keep selling yourself short and the ROI won’t be as satisfying.
No amount of tricks will save you if you neglect to do one thing — promote your productized services.
The biggest issue in selling services is customer acquisition. Services are intangible, their results are hard to imagine, and in some cases, they might be delayed (like in the case of content marketing, where you need to wait a long time for SEO tactics to bear fruit). Therefore, clients take their sweet time in making decisions about whom to trust, and if you’re targeting businesses, the sales process might take even longer.
And of course, you need to make yourself easy to find. So you might need to invest in beautiful ads with enticing copy, SEO content that makes you show up high in SERP, or being super active in certain circles (showing up to all the possible conferences, collaborating with bigger fish, or trusting in the traditional word-of-mouth). No easy task, right? For that reason alone, if you’re just starting as a business owner, whether you productize your service or not might not matter that much, actually. But setting yourself up as an industry expert will be crucial.
If you already have a robust network, don’t be shy and use it to your advantage by asking for help in spreading the word of your stellar service offering. Especially if some of those people were your happy clients — asking for recommendations, reviews, and testimonials is honestly the best thing you can do. After all, people trust other people best, so that might be your chance to stick that foot in the door.
So keep in mind that without people knowing about you in the first place, your productized service might flop before it even had the chance to shine.
And we’re done! Our landing page is decorated with well-thought out packages that show off your unique value proposition and we ensured that it reached your chosen audience. Great!
Just kidding. The work has just begun.
Now that there are actual clients, you need to gather data and take notes of what’s working and what isn’t. Maybe the amazing offer you thought would be most popular is chosen the least, or the cart keeps getting abandoned. Maybe many people visit your website, but hardly anyone converts. Or maybe you get lots of purchases — but they turn out to be custom work, anyway.
By analyzing your sales funnel and measuring things like customer lifetime value, retention and churn rates, and many other customer acquisition metrics, you can base your future business decisions on facts and not your assumptions.
There’s one catch though — while it’s easy enough to keep track of numbers, it’s harder to draw the right conclusions. For example, in the case of ads, is it the copy that failed or the visuals? Did people dislike the ads or were they shown to the wrong audience? That’s where the challenge starts.
One way to figure that out is through A/B testing. By showing different versions of your ads or your website’s subpage, you can see what performs better. The results might be surprising — as case studies show, the devil lies in the details. One small change can truly drive exceptional results.
Also, keep in mind that before drawing any conclusions you need the right amount of data first. Having too little data might point you in the wrong direction, so give it time before making a decision on what to do next.
Another way to figure out what’s working and what isn’t is by simply asking your clients for opinions. You can post surveys on your website or send one through email to both the people who did make a purchase from you and those who didn’t. While some people love questionnaires, other clients should be persuaded with small treats (discounts, bonus, freebies, or anything else you can think of).
You can also choose a more personal approach and ask for a meeting. Careful though — you shouldn’t ask that from just anyone; pick those people that resemble your ideal clients the most or else you risk getting the wrong ideas. With the right person, you can find brilliant ideas, inspiration, as well as a long list of things to fix or implement new features (in case of SaaS). If you’re just starting out, such a meeting could help you validate your business idea and client needs alike. So take your time to connect to your audience on a more personal level and truly consider their criticism.
Now that we have validated our productized service model and know what needs changing, it’s time to make it happen. This part is pretty straightforward and doesn’t require much explanation.
It’s what happens after. Because now, even though you based your decisions on some serious data, you need to validate them again. So you still need to keep measuring your results, gathering feedback, and making adjustments in response. For how long? As long as your service company exists!
Yes, you’ve read that right. No sleep for the wicked!
Growth & Scale
Most business and agency owners alike often think way beyond the present and reach far into the future, where their productized services live long and prosper. Such success is usually accompanied by growth; more revenue is brought by more clients, who have to be handled by more people, naturally. But is it possible to achieve with the productized service model?
Thankfully, productized services, which by default have a predictable process that’s easy to replicate, are also much easier to be taught to other people than custom work. Therefore, growth isn’t as difficult to achieve and you don’t have to worry about compromising the quality of your services when delegating it.
If you’re worried that clients come specifically to you and they won’t accept work from anyone else, even your teammates or employees, you overestimate their loyalty. What they care about the most is the final result, so as long as you oversee it, they might not even notice the difference.
Additionally, productized services facilitate team management. First of all, because such a model divides the scope into smaller parts and creates a smooth process, it’s easier to hold people accountable. It removes such vague answers like “oh yeah I’m in the middle of it” or “I’ll be done, somewhat soonish”. This will also help you better measure how long certain tasks take and better manage the time of your team — and your own — in the future. Considering the nature of custom work and how tricky estimations tend to be, being able to measure the work is a huge advantage for productized services.
To optimize your productized service business even more and achieve significant results faster, use the help of technology. With a proper client portal or any software of your choosing, you can automate the most bothersome, arduous tasks and free up your time.
More than that, you can set up automated email messages to all your clients throughout the whole sales cycle. You can send instantaneous responses to general inquiries, thank-you messages right after a purchase, or questionnaires to gather feedback a week after service delivery.
Additionally, you can also use software to measure metrics mentioned in the previous part of this article. After all, doing your own calculations could be a harrowing, time-consuming experience that could yield many mistakes.
In our opinion, it’s best to pick a software sooner than later. The more your company grows, the harder it will be to implement new processes, especially if they’re complex ones. Then, you’ll have no choice but to hire a consultant to set it up for you, and to teach it to your team, too.
Ready to Change Your Service Offerings?
While productized services bring many attractive benefits to the business table and seem easy enough to implement, they also come with certain traps. In order to avoid them, turn on your strategic thinking and create a well-thought out plan that doesn’t leave anything to chance. Gather as much data as possible on all fronts and make your decisions based on them.
What’s the clear sign that you should productize your service right now? Having a history of clients asking for similar enough services should be a dead giveaway, but truthfully, anyone can give it a shot. Productization doesn’t have to be a big commitment — you can still keep all your standard custom services and add a productized one to spice things up. Then, you’ll be able to compare their performance and if you’re not happy with it, back out without any consequences.
If you need some inspiration, see our real-life examples of productized services across different brands. Who knows, maybe that’s the starting point you need to bring a turnaround to your business!
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