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How to Turn Agency Into Productized Service Business in 5 Steps?

how to turn agency into productized service
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Agency owners, beware!

Ring the alarm bells and let everybody know that a new, mysterious trend is flooding the market, changing how we operate our businesses. The infamous productization is what turns our worlds upside down right now.

So it’s time to pick our sinking bodies up from the oh-so-comfortable sofas and face the unknown.

But how?

How can you jump on the trend?

Well, read this how to turn agency into productized service business article to find out.

Agency vs Productized Service Business Model

You may have gotten into creating an agency because of your skill set that you know helps people solve their problems. This was your business idea.

It could be your marketing expertise, your unique content creation service, your knack for foreign languages, or your amazing sense of aesthetic in graphic design.

So you decided to go for the agency business model and sell custom services, doing your utmost to tend to each client and project individually. You’ve gathered your team, you have the skill set, you have a few clients, and things start to go really well.

But following all that success you realize, you no longer have one important thing.

Time.

After all, we all get the same 24 hours in a day.

So you hit a wall.

You can’t squeeze even one more client or project into your schedule, you can’t scale, you can’t make more money without increasing your prices. You feel stuck.

That is one of the main reasons why agencies turn to productized services.

If you don’t know, here’s a quick recap of what productized services are and how this business model works before we get into how you can switch.

A business model based on productized services is one where you take your services and standardize them in such a way to sell them:

  • for a fixed price
  • with a fixed scope
  • using self-service checkout

Now, what do those three principals give you?

The Benefits of the Productized Service Business Model

Good thing you ask because they give you a lot.

First and foremost, all your processes become standardized. Why? Because you’ll have a fixed scope of the service. No more scope creep, no more over delivering, no more back-and-forth with the clients. Your customers will know exactly what they’re getting upfront and you won’t have to deal with chaos and overworking to take care of yet another small favor for your client.

Second of all, it gives you more time on your hands because your clients will have the option for self-service. They’ll browse through your productized services, choose the one they’re most interested in, and follow through to checkout. You don’t have to be involved in the process at all.

How you spend that time, whether that’s on scaling or finally getting a taste of that personal life, normal people seem to have, is your call.

Third, you get a more predictable business thanks to the fixed price thing and again standardized processes. You’ll be able to tell how many people are needed to deliver any of your productized services, how much time they need to deliver, what resources are needed, and how much money you are getting in return.

If you go for subscription-based productized services, you’ll also get the benefits of MRR. But this MRR will be better, because again – standardized process, i.e., no scope creep and no over delivering. You can take a look at Jake Jorgovan’s story on how he went from 0 to $30k in MRR in just 6 months, thanks to productized services in his B2B podcast creation business.

Stop for a Second

But before you go off the starting blocks.

First, take a few deep breaths and assess your situation with a cool mind.

Think about if you even need to switch to a productized service business. Or are you just feeling the pressure to do so?

Step Zero: the Assessment

This moves us to Step Zero, in which you need to assess your situation and decide if you should give productization a try.

The first thing you may need to do is look for early signs that your agency needs to do a 180.

Some signs that point that productization may be beneficial for your business are:

  • having no time to scale
  • scope creep being a regular occurance for you
  • experiencing a lot of churn
  • processes not standardized

Take your time and analyze how your agency works and think if it’s facing any of the above-mentioned issues. If yes, maybe productization will be the right choice to take.

But you have to do the switch the right way.

Step One: Choose Your Fighter

So, you’re decided you want to give service productization a try.

Great!

But you have no idea where to start and can only picture that single tumbleweed rolling through the desert.

No worries, we’ve got your back.

First, you have to start with choosing the right productized service model. There are a few out there. You can choose the one you’ll feel is the best fit for your business and mix and match as you go.

We’ve crafted an in-depth article on the different productized service models if you want to get all in on that, go ahead.

But here’s a quick recap for those that prefer to have it all in one place:

  1. One-Time Fee Model: selling a packaged productized service for a flat one-time fee. This could be crafting a logo design for $500 in 5 days.

This model is the easiest way to pave your way into productized services.

  1. Subscription Model: selling a package of a few services with a fixed scope for a monthly retainer. This could be writing, researching, and SEO optimizing 10 articles a month for $2000.

The subscription model gives us recurring revenue.

  1. Unlimited Tasks Model: completing an unlimited number of small, usually maintenance tasks for a monthly fee. This could be WordPress site maintenance small tasks for $1500 a month.

This model is beneficial because the tasks to be completed must be small, plus there may be clients that keep their subscriptions with no tasks currently needed.

  1. 1:1 or 1:many Consultations Model: selling your expertise on 1:1 or 1:many consultations. This could be any productized consulting service, e.g. a 1:1 hour-long marketing consultation sold for $1000.

The consultation model gives you the opportunity to charge a lot for a one-hour service, because you’re sharing your expertise.

Step Two: Plan It Out

Once you have selected the best-fitted productization model, you can go ahead and start the brainstorming and planning phase.

Use whichever planning technique you like best, write everything down, mindmap, do a SWOT analysis, whatever floats your boat, but be prepared.

Start your planning session with coming up with your first productized service that you’re going to use in the next phase – the testing.

Now, to be able to test you have to have your first productized service figured out, including the model you’ll use, the name, the price, and most importantly the process of delivery and resources needed.

If you don’t know where to start when it comes to the process and resources, you can think of it as preparing a drink at Starbucks.

Divide the process of delivering your service into exact steps. Next, measure how much time is needed to complete each step until service delivery. Check how much it costs to prepare your ‘drink’ and how many ‘ice cubes’, in our case resources, do you need to fill up the cup.

You can also map out the process from both the client view and the view of your team delivering the service and list the steps needed to be taken on both sides to reach the mutual goal of service delivery.

how to turn agency into productized service: a comparison of the client's journey and service delivery process
Productized service delivery process example

Once you have that blueprint, go ahead and move to the next step.

Step Three: Turn on the Test Mode

Now it’s time to test out your solution.

Serve the drink you’ve prepared to the people and see whether or not they like it.

The test mode is crucial, skipping it is one of the most common mistakes businesses make when switching to productized services.

But don’t get discouraged when your first try doesn’t bring expected results. There’s many factors that influence the success of your first productized service, including how you showcase the new option to your clients.

So don’t be afraid to extend the testing phase and make multiple variations of your productized service to get measurable results. That way you’ll be able to see what actually works for your clients and what doesn’t.

Step Four: Go Further

Let’s assume the best case scenario happened and your test productized service was a huge success.

You’re very happy and now want to jump all in that deep water and soak in productization. But still, we’d suggest keeping calm and switching to productization gradually.

Now, it’s time to slowly extend your productized service offering. And since this will be a bigger venture, you may consider any of the following ways to complete this process:

  • use software: even though some of us still haven’t even heard of productization before and some still struggle to understand it, luckily there are quite a few options of software tools that help with productizing and selling services. Software with productization features helps you create a productized service with little to no effort. You usually just fill out a few tabs, upload your logo, customize the branding, and the productized service will be nice and ready to share with your clients.
  • join the freelance marketplaces: many freelance marketplaces force each of their service provider to specifically define the scope of their service, the price, and force clients to complete the purchase before any work on delivery even begins. Marketplaces like this follow the principles of productization and are an easy way to test out and expand your productized services. But in this case, you have to deal with the fees the marketplace chargers for being the intermediary in the whole process.
  • redesign your agency’s website: the most difficult way, but probably the most rewarding one is to redesign your agency’s website to fit the new business model and present your productized services in the best way possible. You have to include a checkout, you have to have your productized services nicely laid out with all their scope clearly visible to the client. If you don’t have anyone on your team with experience in building websites, it’s best to hire a web developer to get the redesign done for you, which can be costly.
  • build a sister productized branch: an alternative to redesigning your website is to build a new, sister branch, but completely productized. This way, you’ll get the benefits of full productization without risking negative impact on the conversions of your original agency’s website.

Step Five: Measure The Results

And last, but not least, measuring your results.

By now you should be able to see which strategies, models, and ways of implementing your new productized services work best.

Aside from just income results, go ahead and gather direct feedback from your customers to be able to tend to their needs best.

You can measure the results by simply keeping an Excel sheet on Google Drive, using the productized service software with additional reporting options, or using any other tool you find works best for you.

Take notes from the results you’re measuring and adapt to make your business stand out at all times.

To Recap: Analyze, Plan, and Test

Creating your own productized service when having worked selling custom services in your agency all this time may seem impossible.

You have to turn your world upside down and go from something so broad and indefinite to something fixed and completely defined.

But you can do it if you take your time to analyze, plan, and most importantly test out your first productized service to see how it works for your business and your customers.

Now, if you’re still unsure and would like to check out more resources on how to productize client services, go ahead and read:

Hope you now have an idea on how to turn agency into productized service business and are eager to get started!

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Aleksandra Dworak
Aleksandra Dworak
Content Writer

Lifts weights at the gym and of off reader's shoulders to help them skip the daunting research part and get valuable information instead.

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