The Full Guide on How to Productize a Service
Regardless of how long you’ve been in business, productizing your services comes with a plethora of benefits. The productizing process can be life-changing. However, answering the question of “how to productize a service” isn’t straightforward. There are multiple elements at play, and it’s best to show rather than tell.
So let me show you how to productize a service.
What is the productized approach?
What does it mean to productize something? The general idea is to package your services into products so that they can be:
easily sold as monthly services or one-time services,
clients see the immediate value they are getting, and
the service can be largely automated.
Typical services businesses often don’t work in a product-first mindset. They like to hop on a call, discuss the client’s needs, send a proposal, and then work based off a retainer fee on those custom services.
The problem with this strategy is that it doesn’t leave much room for automatization, and you rarely get to make your pricing public. Instead, the entire pricing model is built around client needs.
Read next: Productize Technologies: Scaling a Business With Software
How to productize a service: 3 questions answered
There are a few questions that many agency owners–and those longing to be–have asked me in the past. Below are the answers to the most frequently asked questions on how to productize your service.
How do you productize an agency?
Many agencies started off with a clear service offering, but began to expand along the years. What was a content writing agency suddenly turned into a full-service marketing agency offering anything from content writing to backlink outreach.
The productized business model might work for the entire agency, but not without major changes.
Here are a few things to look at:
Who are the biggest clients, and what’s the workflow with them?
Are clients open to change, or do they prefer old-school methods?
Which services have the highest success rate to be productized?
In theory, it’s easy to get clients to use a client portal, log into it, send requests, and stop using email for all communication. However, not all clients like change. Some are more open to it, while others might be stuck in their ways. It’s up to you how you convince them that this change is better for everyone.
But why disrupt an agency when you could change it slowly? Take a look at your service model and ask yourself: which one can I easily productize? Ideally, you should turn one-time services into a subscription service to profit from recurring revenue and predictable income.
Here are a few examples:
Design services: Sell a recurring subscription of X amount of tasks per month that your clients can redeem.
Consulting services: Give your clients X amount of hours per month to pick your brain.
A note about unlimited services: Be it design, development, or writing–many have started to use the unlimited services model. It has turned out to be a bit of an issue because they are rarely unlimited, and unclear to clients what they get in exchange for a monthly fee. This is the reason we recommend to either sell packaged one-time services, or recurring services with clear deliverables.
If you’re still not sure where to start, check out these productized service examples for some inspiration.
How do you productize your knowledge?
If you’re a consultant, you might be interested in productizing your knowledge instead of delivering services. There are many ways you can share your knowledge with minimal input. You can:
write a book,
create a course, or
create a monthly newsletter.
All three need a bit of upfront work, but once that’s done, the automation kicks in and runs its course (no pun intended). You only need to update your course every now and then, and write a monthly email newsletter.
Grow your industry knowledge
Now, there are a few more active ways to productize your knowledge:
Offer 1:1 coaching: Productized consulting should be your most expensive service as you give clients direct access to pick your brain.
Host live events: Demonstrate thought leadership in this environment by making it a closed event with an entrance fee.
Offer group coaching: This is the same idea as the 1:1 coaching with the difference that multiple clients will attend.
Depending on your knowledge and niche, there might be more opportunities to productize it. For instance, some thought leaders have a membership (which is basically a recurring fee) to get access to their knowledge. This could as well be combined with a course.
How do I create a productized service?
We’ll go into more detail below, but in general, to create a productized service, you need to find demand, know who your ideal customers are, and what they’re looking for. Then package your services into a price that makes it a great deal.
Sounds easy, right? Well, not quite.
As always, the devil is in the details. Productization is not a recipe for overnight success. It’s a framework that needs to be tested. Especially if you’re an established agency who wants to switch over to the productized model, you’ll notice that existing clients might not be thrilled. Why change something that works (in their opinion).
So, what do you do? Do you let them send you random emails and enjoy their retainer model, or do you convince them to switch over to the productized version with a client portal?
Take it slow, and test your setup with an adventurous client first, adjust your flow, and make sure it works before onboarding other clients. Or, spin off a part of your business into a productized version that doesn’t serve legacy clients at all.
Now, let’s hop onto the next topic of how to productize a service step-by-step.
Steps to productize a service
Keep these tips in mind as you’re considering which services you’ll productize:
1. Focus on a niche
A focused niche allows your brand to shine because you can become an industry expert. What could be better than knowing that you’re the expert for one-time speed optimization services? It makes it easy to find potential clients as you know how to speak to them. And, it’s easier to bundle your services, set your prices, and sell them.
That being said, not everyone is running an established agency. Some are starting fresh, so you might have to do a bit of market research first to reach potential customers.
2. Understand your clients’ needs
If you don’t already know what could help your clients, then some research is necessary to. Find out what they fear, what they want, and what could help to make their businesses more competitive in their industries. With the data collected, you can create ideal customer profiles. Then, take a look at your past invoices, identify missed opportunities, and eliminate services nobody seems to be going crazy for.
As a service business owner, it’s essential to provide value to your clients and you can’t provide real value without knowing their needs. Your service offering should be a packaged solution to those needs.
3. Set yourself apart
Earlier I mentioned that you might have to do market research. The pitfall many productized service providers fall into is this: they see a cool idea a competing provider has, and copy it.
Why would a potential client buy your service over the established one? Maybe you’re cheaper, but competing on price is a race to the bottom. Instead, set yourself apart with unique attributes.
For instance: let’s say your service is to create insurance websites. While that is an interesting niche because you set yourself apart from regular designers, why should anyone hire you? Leverage your client testimonials and data, and show prospects that your customers have increased conversion by XY%.
Another example, someone selling services for book covers (design, typography, etc.). There are countless book cover experts out there, but only a few of them have worked with best-selling authors.
4. Review your metrics
How long has each of your services been offered? How do your current services contribute to your success? Are any of your services lacking sales? What makes these services different from your more successful services?
Build off of these metrics to offer productized versions of services that are already successful. Revise unsuccessful services to offer a productized version that provides a solution to a specific problem.
It’s also important to trim the excess services you’re offering. If a service isn’t in demand, there’s no point in distracting clients from the services they need.
5. Check your support history
Scan your support inbox for reasons clients stopped using your services, any objections and problems they experienced. You may find shortcomings in your services, or the way they’re delivered.
For example, if you notice customers regularly asking for progress updates consider implementing a self-service portal where they can see the status of their orders in real time.
6. Ask your best customers for insight
Who are your favorite customers? The ones responsible for a good chunk of your revenue while requiring minimal handholding along the way—I’m sure you have a few clients like that.
Reach out to these clients to find what attracted them to your agency in the first place, and gather insights into bringing in more people like them.
7. Talk to other people in your industry
Not everyone in your space is in a direct competition with you. You’ll learn a lot about business and your customers just from talking to other service providers they use. It could be through industry forums, Slack groups or in-person events.
By openly sharing ideas and helping others solve their problems, you’ll expose yourself to more opportunities, collaborations and joint ventures in the future.
8. Test your setup & optimize your flow
Last but not least, when everything is set up, run tests—a lot of them. Invite a client into your portal and ask them to purchase services, go through the order process, and give you feedback. Don’t worry, we have a test mode so payments aren’t actually live.
With the feedback, go back to the drawing board until the entire flow is easy for both existing clients and new prospects. Then, launch your productized service officially, promote it via content marketing, social media, and affiliates.
How to productize a service with Service Provider Pro
Enough with the theory, let’s take a look at how you can put your service idea into an actual product you can resell. And what better tool to use than SPP?
While the switch to offering productized your services might seem complicated, Service Provider Pro takes the hard work out of the equation. You don’t need an e-commerce build-out or a web developer. You can put your productization plan right into practise and integrate SPP with your website.
Set up your productized service model
In SPP, you can sell two types of services:
recurring subscription services
You can even create variations so you don’t have duplicated services. For instance, if you want to sell blog post writing, the variants could be the content length.
For some services, it also makes sense to set up intake forms. Instead of asking project-related questions upfront during checkout, your clients can fill out a form later.
Set up your order forms
Regardless of the fact that you’re offering monthly plans (for instance website maintenance plans), or one-time services (website speed optimization), you can create order forms that are perfect for every service offering.
The order forms have been designed to increase conversion. They extend beautifully on every device and fill up the entire screen, while staying responsive. Build your order form with our white-label form builder the way you want. Make it super complex with form rules, multiple options, or keep it simple.
You decide if you want to keep the checkout simple to increase conversion, and upsell clients later once they are logged into the client portal.
Once the order forms are set up, link them up with a pricing page on your website, and keep an eye on the conversion rate.
If you’re just getting started, you can keep your productized service software setup to a minimum with services and order forms. However, there is a lot of automatization potential, from adding clients to an email list to customizing the client view with templates.
If you want to take a deep dive into what is possible, check out our developer focused tutorials here.