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The Ratio Between Productized Service Benefits and Risks: Is It Worth It?

productized service benefits
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We’ve talked about productization quite a lot now.

But there’s a reason for it!

Productized services bring many benefits and possibilities to all service-based companies.

And today we want to focus specifically on the pros of productization, but also touch on any possible risks that this business model brings.

So, without any further ado, let’s unpack productization together and see if it’s more beneficial or risky to try.

Quick Reminder: What Are Productized Services?

A quick reminder on what productized services are before we get into the benefits and risks of productization.

Long story short: having a productized service business means selling your services at a fixed rate, with a defined scope, using standardized processes, and a set delivery date.

Now, productization can take different forms and models from one-time standardized projects to clearly defined monthly service packages. But whichever model you decide to go for, productization is sure to give you a lot.

Productized Service Benefits

So what are the actual benefits of productization?

All Redundancy Cut Out

Redundant messages.

Endless stream of inquiries.

We’ve all been there. Lost in the loop of answering clients’ questions about the price of our service, possible discounts, scope of the service, or the planned delivery date.

Having a 10-step long sales process with initial email talk, then a sales call, then negotiations, an offer, waiting for acceptance and signature, and finally delivering a service, only to be drawn back by the requests to edit the project, is what kills the joy of selling services.

How Productized Services Help

The core pillars that make up a productized service ensure that any redundancy will be cut out of your sales process and here’s exactly how:

Fixed price: gets rid of the oh-so-dreading negotiations, proposals, quotes, and basically any back-and-forth with the client. Add to that a self-service checkout and your clients will be able to complete the purchasing process without your guidance.

Fixed scope: is your best ally to save as much time as possible and cut out any unnecessary discussions with the clients. Because you provide the exact scope of the service before they even reach out, your clients will know what they’re getting in exchange for their money and hopefully won’t need to ask any further questions. And if they do, the number of questions definitely won’t be as big as before.

Standardized processes: cut out the chaos and any redundancy trying to evaluate each project from the starting point and figuring out how to tend to each client individually. Instead, you’ll have the same process that you can repeat with your eyes closed and even delegate to others. Standardized processes also ensure great results each time because of the developed success formula for each and every service.

Scalability & Automation

When was the last time you could even think about scaling your business?

One of the biggest struggles of any service-based business, whether we’re talking about freelancers or agencies, is hitting revenue and client capacity ceiling.

And that’s a great success to have so many clients that you can’t take even one more project.

But that success is not the end of the road. There’s no stop sign, no dead end, you can keep going.

Now you may be thinking: how can I keep going if I am already overworking myself trying to serve the clients I already have, I definitely don’t need more on my plate!

Some may say to try hiring new people to help with the workload, others go for automation tools, some simply raise their rates, while others catch themselves in a toxic productivity loop.

But what if we told you that there is a simpler way to serve more clients and gain more free time simultaneously?

How Productized Services Help

We already know that productized services come with a fixed price, fixed scope, and standardized processes cutting out any redundancy. Meaning you gain something extremely valuable instead: time. Time that you can then use to scale your business.

Productized services make it actually possible to serve more clients, because of the systemized processes that don’t require us to reinvent the wheel each time.

Because you’ll need less time to deliver your services and will now have a blueprint to completing each order, you can take on more clients than before. It’s also easier to onboard new employees and let them take over with the system you’ve now created to further expand the business.

That way, you’ll easily scale your service business, but won’t be tied by the amount of work. You can add more productized services as you go or delegate that work to others and focus on working on more exciting and complex custom projects yourself.

Moreover, productized services are much easier to automate.

Systemized processes allow us to automate some of the steps needed to be taken to deliver our service.

And that’s how you can automate the initial message that follows submitting an order, you can automate the whole sales process by giving your clients the option to select the service they want and check out on their own, you can automate invoices, offers, and whole workflows.

Some ways to easily automate the processes of delivering your productized services is by using a CRM software with just the right features. And features that will be particularly useful in the case of automating productized services are the ones that give you the possibility to:

  • set an automatic initial message that’s sent to the clients
  • create workflows with automatic actions set by different types of triggers
  • create productized service offers and add checkout to them
  • set automatic status updates
  • automatically issue invoices and quotes

Transparency & Highlighted Results

The process of delivering your services is so complicated that even thinking about having to explain them to potential customers or new employees seems like an absolute nightmare?

Your clients get lost in your services, don’t understand them, don’t see what actual results they’re getting, and you can feel your headache forming even thinking about one more monstrous email thread explaining all this to the client?

Well, you probably already know what helps with those issues.

How Productized Services Help

Productized services deal with all that in a blink of an eye.

Fixed scope of each productized service, whether that’ll be a one-time project or a package of services sold on subscription basis, helps not only your business, but also tremendously helps your clients.

The defined scope of your services, when clearly visible to the client, gives them a sense of transparency and helps in figuring out whether specific productized service is what they need.

A clear view of your offer is also shifting the focus of your service from your work on the project to the results delivered to the client instead.

Clearly highlighted results for customers further ease the decision process.

They won’t think: Oh! They’re just going to analyze my website, then analyze the websites of my competitors and their backlink structure, and look for the most probable link opportunities to take for me!

Said no one ever.

No, they’ll know that they’ll get an actionable list of links they should get to pass their competitors.

The harsh truth is that no one cares about what you do to deliver your service. Customers care about the results they’re getting.

And productized services ensure clients are not being swamped with difficult to understand terminology, but get a simple description of the results they’ll get with a price and delivery date right next to it.

Take software companies as an example. With Software as a Service business you’re selling a certain solution that you’ve come up with on a subscription basis.

Now, if you’d try to sell it using complicated terminology relating to your software, you may not receive positive results, because your potential customers may not even understand those terms.

What you do instead is focus on highlighting the results your clients get thanks to their subscription. You focus on the problem you’re solving for the client. And that’s exactly what productized services do.

Predictability

Have you ever been in the feast or famine mode?

If yes, then you must know how stressful it can be, especially the famine part.

The question of: will I have enough to pay my bills this month may haunt you all the time. Because how can you predict how much you’re going to earn when each project is different in terms of the workload, the price, and the scope.

You obviously didn’t start your business to constantly have to worry about your earnings. And sure, when things are going well and your hands are full it’s easy to forget about this issue.

But when things slow down, you may unlock panic mode and frantically try to get at least one good project for the next month.

You can try to beat the feast and famine mode with conventional methods, such as saving money during the feast times, raising your rates, going for retainers and fighting churn, or sell your services even cheaper just to pay the bills.

But do you want to constantly be in fight mode with your own business and your own clients?

That’s as stable as us trying to do the handstand scorpion Taraksvasana yoga pose.

How Productized Services Help

Service-based business doesn’t need to be a guessing game.

Systemizing your services gives you the ability to estimate your resources and expenses, the time needed to deliver an X number of productized services each month, the number of clients you can take on, and the net profit you’ll get from serving those clients.

Again, all thanks to its main principles of fixed price, scope, and delivery date.

What’s more, you can even get the compensation for each project upfront, because just like buying products, paying for productized services comes with paying before getting the results. And you can ask for upfront payments, because you can guarantee a certain result to the client thanks to the blueprint you now have.

The outcome will be the same each and every time. The process will be the same each time. The expenses will be the same. And the revenue from that service will be the same.

No More Scope Creep

Now we’re hitting a vulnerable place, better prepare.

The kitchen sink syndrome, also known as scope creep.

We can feel everyone getting the shivers.

But unfortunately almost any service company that works on a project basis knows the struggle of scope creep and would give their all to get rid of it.

The continuous requests to change the details of the project are not only annoying, but also elongate the whole thing, steal your time, and postpone the very much anticipated payday.

How Productized Services Help

Productized services have a clear-cut answer to this problem: setting boundaries.

Meaning that you clearly define the scope of your service and sell it as outlined in the offer.

If you want to show mercy, you can add a few requests for edits and reviews to your service, but you set the upper limit for them as well.

This gets rid of scope creep entirely because customers already paid for the service you’re delivering while being aware of the exact scope of it. If they’d need something done extra, they can reach out to you and purchase it additionally.

Various Options

As we already mentioned, productized services get rid of the whole redundancy in the sales process. But we want to touch a bit more about the ease of selling this type of service in more detail.

With productized services, you predefine your offer and set it as final. The client gets to see the exact scope before having to reach out, accepts it without the need for a proposal, and then pays.

Both the client and the seller have it much easier to get what they want with productized services on deck.

Yet, besides just the sales process being cut in half, you can also go for a different productized services model.

If you prefer recurring revenue, you simply go for the subscription-based model of productization.

And don’t worry, with this model, you can even productize something as intangible as WordPress hosting services. Outlining what’s included in your package and selling that with self-service options: a form and online checkout on a subscription basis.

If you prefer completing one-time services, go for the one-time model, e.g. if you’re a copywriting freelancer you can set creating a 1k word long article as your one-time service.

You can also go ahead and mix and match different models if your services vary. For example, let’s say you’re delivering marketing services and want to create monthly packages of a few of your services, but also want to have a few quick wins, so you go ahead and create a couple one-time services that are easy for the client to purchase and decide on.

The options are pretty rich, but there’s more!

Selling high-ticket services

It’s also much more effortless to sell high-ticket services and earn more.

If you add productized consulting services, you can easily earn a lot in a matter of one hour.

A 1:1 productized service model resembles coaching services in a sense that you share your expertise with customers via 1:1 meetings.

The price can be set extremely high because you’re sharing your knowledge that the client then uses on their own, in theory to not need you to deliver the service on which the expertise focuses on in the future.

You can go a step further and share your expertise on 1:many meetings, selling the ‘tickets’ to that event at a fixed rate, and multiplying your revenue.

Productized Service Risks

Okay, we get it.

Productization has a lot of benefits.

But now onto the real-burning question: is it risky to try?

The harsh truth is that, as everything, productization may be risky in some cases.

To give you a complete picture, we’ll go through the most common risks associated with productized services, but we’ll also include some helpful tips on how to avoid those risks.

Not a Perfect Match

The most common mistake people make when switching to a productized service business is going all in without a test run.

This often leads to learning the hard way that productization is not a match made in heaven for your specific business.

Instead of great success, all you get is low sales, frustrated customers, and a whole business to rethink.

How to avoid it?

Before going all in and productizing everything, run a simple test, including a few or one productized service you think would do best.

You can try the different productization models, different formats, and see which or if any works best.

Some also make a sister-copy of their whole offer, running simultaneously with their original offer to compare results, but not lose anything in the process.

Wrong Packaging and Low Sales

Selling productized services resembles selling physical products in many ways.

And one of the most crucial parts of selling products is their packaging.

We all know that you shouldn’t judge a book by its cover, but unfortunately we all do it. Especially when it comes to products, packaging is everything.

But in the case of productized services, packaging is not only focused on the outer shell, aka design, but also on the way you combine your services together.

Ultimately, poorly completed packages of your productized services, mismatching with the client’s needs may result in low sales.

How to avoid it?

Think it through.

Analyze your competitors.

Even though productization is still in its infancy, there are quite a few productized service examples out there to get inspired off of.

Peek at the competition and try to logically package your services.

You can also analyze your past sales and look for patterns in customer’s purchases. Maybe they already did the nasty work for you by often buying some of your services together.

Customer Backlash

Another painful lesson freshly turned productized service businesses may go through is receiving customer backlash for it.

Forcing all your customers to switch to productization with you may not be the wisest idea of them all.

You may have clients that you’ve built strong relationships with over time and they go back to your services with each complex project. Forcing them to purchase productized services that may be more limited than what they’re used to, may result in your customers turning their backs on you.

How to avoid it?

Go through your services and think if there’s one or a few complex ones that your clients loved in particular or systematically circled back to.

Leave those services in your offer so that your loyal customers can feel appreciated and still work with you as before.

It’s also best to give all your customers the option to book a call or a meeting with you or your team in case they should have any questions or complex projects in mind, alongside the productized services.

Not everyone likes to use the self-service options. Make sure to take care of those clients as well.

Conclusion: Is Productization Worth It?

All in all, productization is most definitely worth it.

But taking on a completely different route requires cautiousness and carefulness. You can’t jump head first and expect everything to go perfectly.

Productize your service, but be wise about it.

Avoid the most common risks that come with productization by taking precautions, most importantly by testing the new solution, and then when all goes well, enjoy all the many benefits that productization brings to service-based businesses!

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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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