One of the best ways to grow your company is by creating products from the services you render. Productize services to add leverage to your service business so you can earn more, work less and provide more value to your clients.
For you to scale in your business, you need to productize your services because the nice thing about products is that they scale, they need less people, and their margins are better.
Services enable products to be built, while the product enables services to be provided. So now it’s product-plus-consulting, but the product is the lead and you change the business model.
But again, the way you manage this paradox is that you’re servicizing to learn about clients and you’re putting food on the table but then you’re productizing to scale your business and to improve your margins.
Now, if you build the product too early there will be two problems: one is you won’t have the resources because a product takes a lot of money before it can generate any amount of revenue; and secondly, you have the risk of building the wrong product because you’re not really closely in touch with customers.
So that’s what you gain at the early stage. But then if you persist for services too long, you can’t scale it. So that’s the idea of servicizing to learn and productizing to earn.
Productized services are packaged and sold just like products. They are easy to identify, select and buy.
What are Productized Services?
Productized services are services that are packaged, sold and delivered just like products.
Imagine that you’re going to the supermarket to pick up a box of cake mix. When you take the box off the shelf, you see:
– on the front cover: a catchy name and picture of a perfect chocolate cake;
– the back: the recipe “a list of ingredients and instructions for making the cake;
– on the left side: information on the serving size and nutritional value;
– on the right side: company information, client testimonials, and a phone number to call for inquiries;
– and either on the box or somewhere else prominent “the price.
A productized service has many of the same characteristics:
– a catchy name and description of the outcome (and possibly a captivating picture);
– what the service contains (ingredients);
– a predefined process (the recipe) for delivering the service;
– a fixed scope (serving size);
– defined benefits (nutritional value);
– testimonials and contact information;
– and a fixed price.
When you’re looking for cake mix, it’s easy to see what’s on display, compare the different types and select the one that looks like it’s going to deliver the cake you’re drooling for.
Why should you be thinking of productized services?
If you’re running a service-based business you should be thinking of productizing your services. Here’s why:
In a service business, you have only 2 levers that determine your revenue potential: your time and the rates you charge.
– Your time lever: You’re delivering a service and that takes time. You can work more hours, but there’s a limit to that (even if you don’t sleep). And you want to have a life as well, right?
– Your rates lever: The rates you can charge have a ceiling. Experience and reputation can help you increase your rates; the exclusivity of your service as well. But you don’t want to compete on rates, and let’s face it, it won’t be long before cheaper alternatives are around.
So you want more leverage. More levers, or longer levers.
Here’s how productized services can help:
– You can automate and outsource. All of your admin, setup, on-boarding and other non-core things can be automated or outsourced. This gives you more time to spend on revenue-generating stuff. Or surfing. Or whatever tickles your fancy.
– You can invest in getting faster and better. As soon as an activity is well defined, it becomes a candidate for improvement. You can invest the time and energy in doing things faster and better, saving you time and delivering higher quality.
– You can charge more. A product has predefined outcomes and deliverables. This switches the conversation with your client from your rates and how long it’s going to take to how this will help your client solve their problem. And that’s a lot more valuable than your time.
To recap, here’s what it means to productize your business.
- It means you sell a service, but it is packaged and the delivery of the service is so well systematized that the company can eventually run without you.
- It’s “productized” because the service is so well defined it is almost as if clients were ordering an actual product.
- This transition of your business model is significant because most service businesses today require custom proposals and custom work to be done with every single new order. With a productized service, the process is templated out in a way that streamlines the work, making it easier to delegate and grow.
Productizing ultimately is about allowing you to work on your business rather than in your business.
Am certain that after going through this article, you must have gotten an idea about the importance of starting a productized service business.