Productize: The Concept of Creating a Scalable Service Business

Key points

  1. Productazation is in most cases the process of making a product out of a service, which is then sold on demand or on a recurring basis.
  2. A popular example of productization is the selling of monthly blog content packages offered by content agencies.
  3. In order for productization to be successfull, you need to know your market, offer good services, have a system in place, and hire great people.

The term productize is a relatively new one that not every company is aware of. However, many of them might have stepped (unknowingly) into productization with their service offering.

At Service Provider Pro, we enjoy educating anyone about the productized concept. Let’s look at the productization meaning, how service-based businesses can make use of it, and what the signification is.

Productize definition

Productization is the process of developing a process to sell packaged services. The idea is to step away from traditional customized services, and instead bundle popular services into a package that can be easily sold, marketed, and delivered.

Productization of a service

In most cases, to productize refers to turning services into a product. The offering can be sold on a recurring basis, or on demand. It usually relies on existing knowledge (about a service), or having systems and processes in place that could be automated.

For instance, a bespoke content agency might be running their business entirely via email, Trello, and spreadsheets. They could scale their business if they had one system to replace everything, and wouldn’t have to rely on custom packages anymore.

That being said, there are also opportunities to combine productization with free offers. For instance, a consultant could write a course that teaches their knowledge to those looking to implement that specific service themselves.

In most cases, consultants wouldn’t go in-depth, though, as it would undermine their done-for-you service. Combining a (free) course with a productized service has the benefit that the course brings in leads, many of which will not have the time (or knowledge) to implement the practices taught in the guide.

Examples of productization

In our blog post on how to productize consulting services, we’ve talked about a marketer who’s created a so-called landing page roast. His productization strategy is successful because he knew how to leverage his years of experience, and turn it into a marketable product, namely recording himself viewing landing pages, and giving his feedback in a 15-minute recording.

Besides consultants, there are many more who can productize their services, for instance:

Grow your industry knowledge

Join thousands of agency owners and get our best agency growth content in your inbox, one email per month 👇️

The productized success formula

With so many service businesses using our software, we at Service Provider Pro have a good idea of what makes some of them successful, while others go out of business just a few months into their subscription.

The productizing process involves four things to ensure your business idea becomes profitable.

Success = Your Market + Your Services + Your Systems + Your People

Let’s look at each one of those in order of importance.

1. Your market

If you’re just starting out with no personal brand, no reputation and no audience, this is the most important part of a productized business.

If you think you’re just going to launch a great service and customers will magically find you and buy from you, you’re going to have a bad time.

Decide who’s in your target market and how you’re going to reach them before you even think about creating a service offering.

Pro tip: if your definition of target audience has the word “anyone” in it, it’s probably not specific enough.

Also, it’s not just who you’re targeting, but also how you’re going to reach them. Whether it’s SEO, content marketing, social media, forums, cold calls, or paid advertising.

2. Your services

Most people start by coming up with a productized service idea they could sell. What often happens is you end up with a solution in search of a market instead of a something that’s made to address a specific need your audience has.

At this point, if you already have experience with regular client work, you probably know what kinds of projects most of your clients are looking for. Those are most likely the best candidates for your productized offering.

Otherwise, you’ll need to do research, either by speaking to people in your target market directly, or by looking at services they’re already buying.

The end goal is to have your services packaged as easy-to-buy products with set deliverables and a clear price.

3. Your systems

Having established systems and processes is what really helps with scaling your services. Meaning, your expenses do not go hand in hand with revenue, and the business actually becomes more profitable as it grows.

Systems include everything from general documentation to step-by-step processes for delivering services, to tools, software and the way you handle customer projects.

Contrary to popular belief, you don’t need the perfect, most optimized setup for selling services when you’re just starting out. At that stage, you don’t really know what’s going to work yet.

Start with the basics, figure out the best way to do things manually, then invest in systems. And if you do, we have built the perfect productize software you can make use of.

4. Your people

A services business runs on people—there’s no way around that.

However, the beauty of systems and documented procedures is that you don’t need to hire the most expensive top 5% industry experts to handle routine client work.

Also, you don’t need as many people to begin with, since projects are similar and typically require fewer back-and-forth emails with the client.

Final thoughts on productizing your current business model

If you’re one of the agencies thinking about productizing their services, you’re definitely onto something. Don’t jump head-first into this new adventure. Instead, try it out with one of your services that you think has potential. For instance, an SEO agency that offers content writing could easily package this service. Sell monthly word bundles and enjoy recurring revenue; or offer a discounted test article to convince prospects of your quality. There are many ways for professional services firms to productize their offering.

Lastly, think about using a secure customer portal to kick-start your productized business. It can take a lot of work off your hands if you don’t need to wrestle with stiched together solutions.

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.

Running an agency?

See how a Client Portal can help you sell more services…
Learn more