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Last updated on June 26th, 2023

Launching Productization - Marketing Strategy (Part 3)

If you’ve read part 1 and part 2 in this series, you should be well on your way to implementing productization by now. You may have conceptualized your core products and researched technologies you can use to streamline your processes.

No longer are you trying to be everything to everyone. You’ve narrowed your focus to your target customer base, and you’re gearing up to launch some big changes.

Now it’s time to set your pricing structure and marketing strategy. You’ll also need to decide how you’ll introduce your new model to current clients.

Hang on tight. You’re almost there!

A New Perspective on Pricing

With productization, you’ll be pricing outcomes instead of inputs. It’s the value you create that matters, not how much time or effort you put in. That’s the whole point, after all - to make your business much more scalable by getting paid for your results instead of your time.

While time is obviously finite, there’s no cap on the value your product can provide.

Assess the value you’re adding to your product by streamlining your processes and results. The technology you’ve decided to adopt probably adds value, for instance. Here are a few specific ways productization can increase value:

  • Adding analytics that assess customer needs or track results (such as Google Analytics) will bring obvious benefits. An SEO company that adopts a more sophisticated algorithm to choose keywords is increasing the value of what it delivers, for instance.

  • A more intuitive user interface will create a better customer experience. If you’re updating your platform, factor that in.

  • Guaranteeing specific results gives your clients peace of mind. They’re taking much less of a risk by purchasing from you.

Look at what other companies are charging for products like yours, so you don’t overprice or underprice yourself.

Factor in the time you’ll be saving, too. If you’re saving a pretty hefty chunk of time, you may actually want to offer your product at a lower price than before. Giving customers a discount for multiple purchases, or subscribing over a period of time, is a win-win. This also happens to be a great strategy for keeping current customers.

The Product Ladder

Offering a robust product mix will help draw in new customers and encourage them to upgrade to more valuable products. Here are the key elements of the product ladder.

Offer a “foot in the door” product. This could be a free offer that will encourage potential customers to come back. It’s all about lead generation tactics. It builds trust and establishes your expertise. The free product can be created once and automatically sent to prospects who sign up to your mailing list.

Create an entry-level product. This product has a lower price tag than others you offer, letting people test the waters with little risk. Like the free product, this can be a product that earns you passive revenue, like an e-book or a crash course, says the Multiplier. (It might take a little more work to create than the free product, though.) Or, it can be a product that gives customers a taste of what you can do for them without stumping up big bucks.

  • The productized consulting firm UI Breakfast offers a book for $34 (or the book plus worksheets for $39) to give customers a clearer idea of the product.

  • Goby Savvy provide UX reviews for websites. They offer a one-time 35-page report describing a customer’s issues and solutions for $325. While not dirt-cheap, it has a much lower price tag than the $550/month subscription.

Use a three-prong strategy. This means creating a product mix with several pricing tiers. A huge number of companies are creating three different packages of services, which each include a different bundle of features and a different price tag.

“The mere presence of more expensive packages elevates the perception of your product line and makes entry-point packages look more affordable,”

says Jane Portman, who owns UI Breakfast and practices productized consulting for SaaS companies, in a Forbes interview.

  • Bean Jungle handle Instagram management, and offer three package tiers, ranging from basic posts with images to more advanced posts with videos.

  • Data Stories provide data services such as predictive modeling, and give customers a free trial of its first-tier package.

Offer a recurring subscription. A subscription is a no-brainer for customers who need to keep using your product to get results, like SEO clients, content marketing or those who need ongoing support, such as help with WordPress, for example. If it takes some time for your product to deliver value, you should be offering a subscription.

  • Kudu offer four tiers of subscription plans for Adwords planning and management, which range from $399 to $999 a month, depending on how much clients are spending on Adwords.

  • LeapIn provides a company setup and bookkeeping service for a monthly subscription that ranges from €59 to €99, depending on the type and size of the business.

  • Undullify offer four monthly subscription packages for unlimited graphic design services, ranging from $149 to $699.

Offer one-time purchases where it makes sense. If your product is completely self-contained - a website audit, for instance - clients probably won’t be looking for a long-term subscription. Don’t force them to buy a subscription if it doesn’t make sense for them.

  • Rev transcribes, translates, and creates captions for podcasts. These services are charged by the minute and by the word.

  • WP Quickie brands itself as handling those small WordPress tasks that occasionally require help from a pro. It charges a flat rate of $50 for a single task.

Create an “extended product.” This simply refers to all the extra features that come with the product itself, like the satisfaction guarantee or ongoing support. These are key factors in convincing a potential customer to purchase, a 2017 study on productization found.

  • Page in a Day build customers a website in one day and offer ongoing training on managing the website.

  • Growth Geeks spell out exactly how customers can get in touch with them for support, encouraging them to chat, call, or email. It also offers a 30-day money-back guarantee.

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Telling The Product Story

Now that you have a concrete product, you can tell a clear story about how it will benefit customers:

  • Describe your target client’s problem.

  • State what the customer dreams of achieving, and how your solution will help them get there.

  • Outline and respond to potential objections, then wrap up with a clear call to action asking them to try your service.

This story will appeal much more strongly to your target audience than a vague offer to help them with their website.

Outlining Your Process

Since what you deliver is so well-defined, you can outline the process in detailed steps on your website. The clearer you can be, the more you can avoid answering the same questions over and over again by email or phone.

  • RankBOSS link-building service break down what they do into three key phases, describing each in depth. Even customers who are clueless about SEO will know exactly what they’re signing up for.

  • Bean Jungle spell out what happens in each of the first few weeks of its workflow process.

Providing a demo will help you show people what you do even better. Facebook Ad service Clicks and Leads offer a demo for all three of its product tiers.

Prevent Scope Creep

It’s important to describe what you won’t do as well. If you look at the websites of companies that sell productized services, they often assert that they won’t handle a certain task even though it’s related. They know there’s a limit to how far they can push themselves while keeping up their level of productivity.

If you think you’ll keep getting certain types of requests that just don’t fit into your product package, add a disclaimer to your website to explain where your scope ends.

If you score a big client who wants something a little different, can you bend the rules a little? Sure. But that doesn’t mean you should do it for everyone. Don’t let yourself get tugged in every direction by all your customers.

Approaching Existing Clients

You may be afraid of scaring off current customers with sweeping changes. But they should be as excited as you are, because you’ll be giving them more bang for their buck!

Here are a few key ways to ensure they remain loyal throughout the transition and beyond.

  • Give them a reward, such as a loyal customer discount for a new package you’re offering.

  • Seek their input. That way, they’ll feel like the product is being tailored to them rather than feeling like they’re being slammed with higher rates. Plus, you’ll get free developmental help!

  • Assure them of the added value they’ll be getting. After all, streamlining your workflow and guaranteeing outcomes means they’ll get a quality product every time - all without a price hike. (Again, you may even opt to lower their prices since you can produce the product more efficiently.)

  • Give them a discount for testing the product in the beta phase.

  • If you have existing contracts, let them play out over the transition period.

  • If you’ve been providing a particular service to a loyal client for years and can practically do it with your eyes closed, you don’t necessarily need to stop. If the client feels the product doesn’t meet his or her needs, it may be worthwhile to give them the same service they’re used to.

Avatar of Chris Willow
Founder of SPP
Chris started Service Provider Pro back in 2014 as a way to help automate a video production agency he was running at the time. Being early to productized services, he was frustrated with having to piecemeal different tools and services and ended up building an all-in-one client portal platform for himself and a few friends. That eventually took off and now Chris helps agency owners scale through software and systems.

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