Why Service Businesses Should Implement A Productized Service Model

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I can’t count high enough to tell you how many service business owners I’ve met that are just plain beat – in all industries. Every day they work tirelessly to satisfy client demands, and then in the evening they’re working from their cellphones.  Only to repeat the process of being stretched thin by the over arching demands of their  clients.  

While their service business may provide them a high income at the expense of their time and sanity, the businesses are purely inefficient, owner dependant, and don’t much equity value for an exist.  

That’s why I recommend service business move towards a productized service model.

A productized service model allows businesses more control over how they conduct business and with high efficiency. If you sell your service as a product, you and your customer know exactly what to expect, bringing in more business. You can also quickly expand your business by outsourcing.

The first step to productizing your services is understanding everything from the definition to the benefits and beyond. This comprehensive rundown should guide you to the answer as to why this model might be worth implementing – and how to put it into action.

Understanding The Productized Service Model

Did you know it’s possible to sell services as you would a product? That’s what a productized service model is all about. You can change the way you sell your services by defining them as a set process that you can easily replicate with minor adjustments for each sale – instead of starting a plan from scratch for every client.

To sell a service as a product, you must describe your service in detail, along with other parameters like a timeframe and a fixed price. Productizing your services simplifies work so you can easily manage the process and set clear expectations. Doing this makes it easier for you and your customer to understand your service without any grey areas.

You can also sell variations of your service at a price that matches the input level, which lets customers budget. This model works for business-to-business (B2B) and business-to-customer (B2C) services.

The buzzword of a productized service model is repeatable. As long as you can set a service structure to replicate, you can productize your business.

Benefits of Adopting a Productized Service Model

If you want to know why service businesses should implement a productized service model, there are bountiful reasons.

1. You Can Simplify And Streamline Work

Once you outline what your service offers precisely, it becomes easier to complete, especially when you repeat the process many times over. With a clear outline, you will know what to do in actionable steps, making it simple.

With a service package sold as a product, you don’t need to constantly explain yourself to new customers or start each service from scratch because you already know what your productized service entails. Your client is also clear on what to expect, streamlining your service.

2. It Allows For Higher Productivity

Since you know everything your service is supposed to provide before a purchase is even made, once a customer pays, you can complete it quickly, maximizing your productivity. You also eliminate prior consultations and proposals. With higher productivity, you can take on more work for greater profitability.

3. You Can Easily Expand Your Business With Less Involvement

Since your productized service is an actionable plan, training employees to learn the replicated service is easy. Once you bring in enough work, you can hire employees to complete the service and even employ a manager to guide and manage them. With this business model, you could eventually free up your time to focus on other things while the business runs without major involvement.  

4. You And Your Customer Know What To Expect

With a productized business model, your service is predictable, and you don’t need to devise a new plan for each service because there’s one already in place. You also create clear expectations for your customers, which makes your service more marketable and appealing to new prospects. Productizing your service also eliminates the need for an hourly rate that may be unpredictable.

5. It Maximizes Sales

You simplify the customer journey by eliminating a tedious quote process and providing a detailed description of what your service offers. A productized service makes it easier for customers to budget and pay without overthinking beforehand, which brings in more sales.

6. Services Are Easier To Evaluate

Since everything is simplified, collecting data is a lot easier to collect and track. You will find it much easier to evaluate your business and conduct audits with a productized service model.

The Cons Of A Productized Service

The negatives of a productized business model are minimal. The main concern about this structure is your time.

1. Initial Lower Profitability

Starting out may take more time and leave you with a lower profit margin than being paid by the hour, but when you repeat something enough, you become more efficient, which is more profitable in the long run.

2. Impersonalized Service

The negative for your customer is that a productized service is less customized for their needs and limits them to what you offer. Of course you can sell add-ons and different service tiers, but it might not fulfill all your customer’s needs as much as a customized service can.

3. Too Much Work To Manage On Time

A productized service may also bring in work too fast that you may be unable to keep up with. You will need to set realistic parameters regarding the time it takes to complete a service and your maximum capacity.

A word of warning when productizing: if you offer a custom quote for services, it discredits your packages and makes them less sellable, which puts you in a position where you have big custom projects that get in the way of streamlining work.

How To Implement A Productized Service Model

Are you sold on productizing your services? Whether you’re a digital freelancer or a seasoned consulting agency, these are the steps to implement this business model.

  • Step 1: Gather and review all information about your services.
  • Step 2: Group your service into a package you can sell as a singular product. Also, figure out the tiers and add-ons you’d like to sell.
  • Step 3: Decide what format you’ll sell your service, for example, once-off or subscription-based.
  • Step 4: Create a detailed service description.
  • Step 5: Create or update your website to sell your service as you would a product.
  • Step 6: Market your services.


Wrap Up

There are plenty of reasons to productize your services, and it may be the way of the future! A productized service is more straightforward for you and your customer, creates clear expectations, and maximizes profitability. There aren’t many downsides either!


About the Author

I have been in the 'online business' space since 2009 when I started an eCommerce business selling motorcycle parts (sold in 2012). Since then I have owned and operated several successful online business (and had a fair share of failures), along with owning offline home services businesses. Currently my focus is online businesses that are profitable with paid traffic. As a 'self employed individual' I do not use Linkedin, but you can connect with my on my personal instagram and youtube which largely revolve around my mountain biking passion!