Categories: Marketing (General)
| On
December 15, 2018

Productized Services: A 5-Step Guide (for 2019)

By Aggelos Mouzakitis

Productized services is not a new concept.

In fact, many businesses are using productization as a way to scale and grow.

I am sure that you know a couple of productized services already —

Chances are that you have even used one of these services for your own business.

How is the service set up, what is the business model and how can you do it yourself?

You’ll find it all here.

Just keep reading.


Chapter 1: What are Productized Services?

Chapter 2: What are the Benefits of Productized Services?

Chapter 3: When it’s Time to Productize your Service

Chapter 4: How to Productize your Service

Chapter 5: Scalable Business Model Examples

Chapter 6: Last Thoughts

Chapter 1: What are Productized Services?

Productization is a great way to make the most out of your service business.

According to AutoGrow:

“A productized service simplifies and focuses your business’ marketing operations into a model that is more predictable, process focused, and easier to sell.”

This means that productizing allows you to maintain the same high-quality for your services while serving more clients.

Also, it allows you to earn more by getting new clients and scaling your business.

Of course, not all business models are scalable, and not all services can be productized.

However, productizing can fit many cases where the service is specific and has a scale potential.

Productize definition according to Investopedia:

“Productize refers to the process of developing or altering a process, an idea, skill or service to make it marketable for sale to the public.”

For example, let’s take a look at WP Curve, a done-for-you service for WordPress websites that was acquired by GoDaddy.

Image Source: WP Curve

By signing up for a WP Curve account, you can submit a task — it could be something simple or a bit more complex — and have a WordPress expert fulfil the task for you.

Here is how the process looks like:

Image Source: WP Curve

As you can understand, there isn’t a software or algorithm that solves your problem; there is an actual human being.

At the same time, a service like this operates 24/7 and thus can serve clients all the time.

Many people think that a productized service is a SaaS — 

However, even though there are some similarities, a SaaS is an entirely different thing.

As Brian Casel, Founder at Audience OPS — a done-for-you content creation service — puts it:

“The great things about a productized service is that you don’t have to invest in building a software, you can actually start collecting revenue and delivering the service immediately.”

Image Source: Brian Casel on Twitter

Here is how the Buzzsumo UI looks like:

Image Source: Buzzsumo

You wouldn’t call that a productized service, would you?

That’s a SaaS and what I want you to keep is that a SaaS is a different thing than a productized service.

Another common mistake people make is to describe a productized service as a packaged service.

But, there is a big difference between the two of them.

I am not going to cover that in detail now, but you can take a look at this video to get a clear idea of the two concepts.

At that point, I need to explain that productized services apply mostly to B2B.

Productization can help your small business scale without having to worry about the hours you are billing or the clients you are bringing in every month.

That brings us to the 2nd (second) chapter of this guide — the benefits of productized services.

Ready? Let’s dive right in!

Chapter 2: What are the Benefits of Productized Services?

When you think of productized services, think of benefits.

Productizing your service business can help you overcome the obstacles of scaling and earning more while worrying less.

Now, I want to be uber clear about this, productizing a service business can be very demanding —

Once you manage to set up your business, you will witness a huge difference.

1) Scale your business

One of the most important benefits of productizing a service is that it allows you to scale your small business.

What you need to understand is that when you are productizing, you are getting away from serving everyone.

This means that you are going to narrow down your targeting —

Image Source: Facebook Business Manager

At the same time, you will be more specific as to who your ideal customer is.

When you are crystal clear as to who your ideal client is, you can scale — and, the way to do that is by productizing your services.

2) Serve more customers

As I hope it is evident by now, productization can help you serve more customers — it can help you get more new clients.

When you scale, it’s only natural that you are going to get new customers for your productized service.

People who know what they need and how you can help them.

This is also a great way to qualify your prospects and let only the high-quality ones try your product.

For example, here is how 99Designs communicate their message to marketing agencies:

Image Source: 99designs

The best part?

You won’t have to write and submit these long custom proposals, only to get rejected (most of the times).

With a productized service, you will be able to serve more customers while spending less-to-zero time on writing custom proposals.  

3) Earn more

As you can imagine, the increase in your customer base will cause an increase in your income — an increase in your revenue.

This is not always the case with service businesses.

Keep in mind that when you are productizing, the metrics and terms you are using to measure your success are different.

A productized service has a Monthly Recurring Revenue (MRR), as well as an Annual Recurring Revenue (ARR).

Simply put, you are now charging a monthly fee that is recurring and includes specific deliverables.

4) Change your lifestyle

I saved the best for last.

Launching and running a productized service allows you to change your lifestyle radically.

What do I mean by that?

It means that practically, you have a product that sells itself 24/7 — it sells itself when:

  • You are sleeping
  • You are taking some time off
  • You are focusing on other aspects of your business
  • You are spending more time with your friends and family

Moreover, as you already know, all these things are essential for your well-being.

Chapter 3: When it’s Time to Productize your Service

I am sure that as you are reading this article, you are wondering:

“So far so good, but, when it’s the best time to productize my services?”

Truth been told, there isn’t such thing as “the best time”.

A service business can be a scalable service business when:

  • It solves a specific problem
  • The total addressable market can support its business model
  • There is high demand for that service

Allow me to illustrate this with an example —

Let’s assume that you are working as a Facebook Ads consultant.

Image Source: Facebook Business Manager

When would it be a good time for you to productize your services?

Now, let’s say that you are a real expert in running Facebook Ads for eCommerce businesses, and your clients over the years use the following CMS:

You’ve helped more than 90 companies in your advertising career, and you’ve noticed that most of them have the same problem:

They get some sales, but what they want is to scale their advertising budget spending and increase their ROAS.

Having worked with several eCommerce businesses, you know that for this to happen, they need to:

  • Have a certain number of sales per month;
  • Have a certain advertising budget;
  • Have a certain amount of products;
  • Belong to a certain niche.

Now, you could offer a packaged service, but that wouldn’t be a solution.

What you could do, is launch a new product that refers only to Shopify stores, that:

  1. Generate an x amount of revenue each month;
  2. Have a specific advertising budget;
  3. Number of products;
  4. And, belong to certain niches.

This way, you could save yourself the time and effort from trying to close new clients that you know for a fact are very difficult to help.

Keep in mind that you can build a landing page to validate your product first — after you’ve successfully managed to validate your idea, you can start building your product.

You can also a/b test different variables to see what is working and what is not.  

As you can understand, an excellent time to productize is when you have enough experience to know how to solve a particular problem in your industry —

Start with your customers’ problems and pain points; the product idea will come right after that.

Chapter 4: How to Productize your Service

Starting a service business is difficult — scaling that business is even more difficult.

But, if you want to scale, productization is the only way.

As Mohan Sawhney, Professor at Kellogg School of Management puts it:

“You do not get a 4-5x revenue for a consulting firm; you get it from a product.”

Image Source: Mohan Sawhney on Twitter

So, what are the steps of a typical productization process?

To make it easier to understand, I am going to use the example of an SEO consultant that works with SaaS businesses.

Step 1: Make a list of your services

This is the first step of the process and one of the most important ones.


Step 2: Choose the ones you are excellent at

In this step, I’d like you to let go of your ego and based on past projects you’ve undertaken, pick up the ones that you are great at.

Step 3: Find a problem that your “rockstar services” can solve

A problem that your services solve is:

Keep in mind that this is the problem — what you want is to offer a solution based on that problem.

This is what we are going to do in the next step.

Step 4: Find the solution to that problem

Your rockstar services have to solve the problem we mentioned.

Here is the solution for our example:

Step 5: Define your value proposition

An essential step of your productization plan is to define your value proposition.

This is the very foundation of your product and the connection between your services (as a solution) and the problem.

In our example, the value proposition is:

Step 6: Conduct a competitors research

Next, you have to conduct a competitors research.

It’s essential that you know what are other productized services exist out there, what is their value proposition, pricing structure and differentiation elements.

Step 7: Validate your product idea

Next, you need to validate your idea.

I am not going to cover this in detail since I have posted articles that cover the topic thoroughly in the past.

Here they are:

  1. What is Validation Marketing and Why Should You Care
  2. The 9 Principles of Validation Marketing
  3. The Do’s and Don’ts of Validation Marketing
  4. Startup Idea Validation: 5 Successful Examples

Step 8: Start Selling (and scaling)

This is the last step of the process.

Not that everything ends here — on the contrary, this is the point where everything starts.

Be consistent with your efforts, follow the steps I’ve just covered, and you’ll be fine!

Chapter 5: Scalable Business Model Examples

The truth is that almost every B2B service can be productized.

In the previous chapter, you show how you can productize your service following a step-by-step process.

If you are still wondering how to scale your business, then it’s good to take a look at these professions that can easily be productized:

  • Web design
  • Graphic design
  • Cover design
  • Google Adwords consultation
  • Shopify developer
  • Facebook Ads consultation
  • Video editing
  • Content creation
  • Copywriting
  • Draft revise
  • WordPress support
  • Live Chat

As you can understand, services like website design services, marketing services, content marketing services or online Ads management services can be productized.

There are many other business models or professions that are scalable, but these are some of the most common ones.

Moreover, here are some examples of how a productized service looks like:

  1. Design pickle – Unlimited graphic design service
  2. Chalet Engine – Website design service for chalets
  3. Rocking Book Covers – Cover design service
  4. Content Sherpa – Content creation service
  5. HelpFlow – Live chat service
  6. Restaurant Engine – Website design for restaurants
  7. Audience OPS – Done-for-you content creation service
  8. Superfast Business  – Online business coaching

I am sure that by now, you have a clear understanding of what a productized service looks like and what are the characteristics and structure of its business model.

Let’s move on to the next (and last) chapter of this guide.

Chapter 6: Last Thoughts

In this article, I tried to pull back the curtain and walk you through the exact steps you need to take if you want to productize your services.

Remember: productizing in the only way to scale.

Now, you have everything you need to make a productization plan for your service business.

Follow the steps I showed you, and you’ll witness scaling first-hand.

People Who Read This Article Also Read:

  1. Productized Services Examples: The Ultimate List (for 2019)
  2. The Build Measure Learn Model [Explained]
  3. Why the AARRR Framework is not for Everyone (Explained with Examples)
Aggelos Mouzakitis

Aggelos is the founder and Growth Product Manager of Growth Sandwich. He is among the first Customer-led experts in the world, leveraging advanced, Jobs-to-be-done customer research to orchestrate and guide Growth for B2B SaaS companies. A- and B- series SaaS are hiring him to organise, design and execute programs that infuse the whole company with qualitative data, empathy and the necessary knowledge to address any growth dilemma. In the last 4 years, he has worked with more than 100 SaaS companies and trained literally, thousands through my physical and online courses.