Productization of Services: A Quick Guide
Last updated on May 6th, 2023
The landscape of the IT industry has been evolving continuously for the last several decades. Many new business models and practices have been introduced into the market through IT-empowered activities and mechanisms. For the sake of customer success, many innovative business models are being adopted lately and one of those successful business models is the Productization of Services.
This business model is useful for all types of businesses, consultants, freelancers, and more as it allows them to turn their services into products and boost their revenue.
But how can someone turn his service into a product? What is the productization of services? Why is it necessary for business owners to consider this business model? Are there any examples of productized services? All of these questions along with some other important aspects related to the productization of services will be discussed thoroughly in this comprehensive guide.
What is the Productization of Services?
Productization of services is a process in which a business’s services are marketed and sold like products involving some standard pricing and parameters. The customer will exactly be aware of the type, duration, and feasibility of the productized service that he will receive upon payment.
Your productized service will appeal to a specific group of customers with specific needs. You will present the solution to the pain points of the consumers in the form of an easy-to-buy packaged service. There are numerous ways to turn your services into products.
For example, you can develop a specialized marketing software application that performs a specific function when it is bought and run by a customer.
What is the Importance of Productized Services?
Are you a business that is making a living project to project? Do you worry about consistent client hunting and working every day yourself to earn a living? If that is the case with you, the productization of the services is just what you need.
One of the most astonishing features of this business model is that it allows you to develop a recurring stream of revenue. Basically you can turn your internal business capabilities into revenue-generating products. You can automate your service-providing system with ease and facilitate users at the same time by allowing them to avail the solutions to their problems whenever they need them. Some prominent advantages of productized services are given as follows.
Your Revenue Gets Boosted
When you turn services into products, you can effectively automate your service without being involved yourself. You can sell it like a product as many times as you want. This process significantly boosts your revenue as there is no limit to people who are capable of receiving your service.
You Can Scale Your Business
Scaling a business is the dream of every business owner. With the help of the productization of your services, you are now able to take your business to the next level and reach as many potential customers as you can possibly want. Market penetration also gets facilitated through this business model.
Your Customer Satisfaction Rate Increases
When customers receive a packaged productized service, they know exactly what they are paying for, and for a long time, they can receive the benefits of a service. There are no grey areas during the process and everything is quite transparent in front of them. When customers receive exactly what they expect from you, their satisfaction rate gets enhanced and customer churn also reduces. Moreover, the cost of customer acquisition also gets reduced in this business model.
You can improve your quality control
When there are some standard parameters, processes, and tasks involved in service, it is easier to improve the quality of the service, maintain the functioning of the entire system and resolve issues that you or your client may face while using your productized service. Hence, better quality control can be ensured while productizing your services.
Step-by-Step Process for Turning Services into Products
In order to turn your services into products, you need to find what type of services can be offered as packaged products. You need to locate the areas and steps of your services that can be automated and combined together to perform a series of actions whenever asked. To understand the process further, have a look at the below-mentioned steps.
1. Identify the Niche
In order to choose a niche for your productized service, you need to consider the needs of your potential clients and how easily you can penetrate a market. Try choosing a service that is in high demand and can be delivered through a predictable process. If there is already a productized service in your niche, try innovating your business process or finding some other service to offer.
In our previous example, when someone working in a marketing agency realizes that there is an opportunity to develop a specialized software application, he identifies a niche, and take advantage of this identification to encapsulate a specific business function into a product.
2. Determine How to Deliver your Service to Customers
Now, you need to choose a format for delivering your service to customers. There are multiple options that can be considered if you are looking for ideas. For example, creating recorded training sessions, voice recording, sharing your thoughts and ideas in a book format, creating premade templates and visuals, or developing a website to offer your specific content to users.
In this specific context, our website free PowerPoint Templates offers premade presentation templates to presenters and speakers who have no time to design their slides from scratch or pay a professional designer to develop their pitch decks. Now, anyone can download any template of his/her desire for his custom needs and edit it easily without any inconvenience. Creating and preceding pitch decks and presentations is much easier now.
3. Determine the Business Model
How will you provide your service to clients? Will there be a one-time-pay business model or a recurring subscription-based system for clients (SaaS, or SWaS, as we will see later)? For example, if your website sells design templates, then clients may pay for the service only for a single time. But if you are selling bookkeeping or content creation software, you may charge your clients on a monthly basis through a subscription-based model.
4. Further Improvement of Productized Service
If one idea doesn’t work, try another one. Learning and implementing new workable strategies is very crucial in this business model due to dynamic changes in the behaviors of the customers and trends in the market. You may need to test different subscription plans and packages to grab the interest of maximum users. You can offer your service to the prospects on a trial basis as well to incite their interest and further convert them into potential clients.
You also should try to become the best in your niche. People trust businesses that specialize in their products and services and keep innovating them. Try researching your market, comparing your service to your competitors, and offering the best possible packages and deals to the clients with appealing customer support systems.
Actionable Examples of Productized Services
When it comes to productized services, there is no limit to the type and number of ideas that you can try for establishing an effective revenue-generating business model. Almost any service-providing company can generate a product around their service and offer it to their clients to satisfy their needs. Productized services are seen both in B2B and B2C models. Nowadays, you can also see them in B2C2B.
Here are a few examples of companies that are leveraging the idea of service productization and generating consistent revenue from it.
Productization of Services for Content Creation
In order to meet content generation and content marketing needs, businesses are now generating more content than ever before. For this purpose, productized services like Scribly and Growth Machine come in very handy. Where Scribly offers subscription-based services to businesses for boosting traffic and leads, Growth Machine helps businesses in writing, planning, and building links to their blogs and websites.
Productization of Services for Graphic Design
As every company is trying to secure a place in the digital business landscape now, the need for graphics and visuals has also skyrocketed. For startups and small businesses, it becomes expensive sometimes to hire a team of designers for their everyday design needs. In this context, subscription-based and relatively way cheaper websites like Design Pickle and Limitless Designs become prominent. Both of these websites offer varying packages and productized services for day to day graphic design needs of companies.
Productization of Services for Software Development
Software with a service or SWaS is a completely different business model from software as a service or SaaS. It involves establishing, implementing, and then maintaining a software platform. If you provide a specific facility or service to clients through such software with a repeatable process, you can market and sell your productized service for supporting your current software platform. Bench, for example, not only uses its own software but also supports, and facilitates customers in using it. It is a dynamic bookkeeping platform. Another software named ProcessKit Implementer is a productized service-based software used for project management practices.
Productization of Services for Coaching
Being a coach or trainer, you can now offer your expertise and knowledge in the form of productized services. Platforms like Copyhackers, and Boss as a Service are facilitating hundreds if not thousands of individuals for their copywriting and productivity needs respectively.
In simplest words, productization of the services is the process of turning your services into products by setting fixed standards, parameters and payment options, etc. If you aspire to scale your service-based business and boost its revenue, productized services can help you realize this dream. In this business model, you can acquire new customers more easily and satisfy existing customers effectively as well.
Moreover, your customer churn also reduces which helps you grow your business significantly. Quality control of your productized services also gets facilitated and you maintain more smooth functioning of the tasks and activities of your service. In order to productize your service, you need to select a suitable niche first and develop a feasible working format for your productized service.
After this, you will have to determine the structure of your service and further improve the quality and deliverance of your productized service to attract and retain maximum potential clients. Productized services is revolutionizing the way of doing business, especially for content creators, software developers, trainers, coaches, startups, and freelancers. From Graphic Design to Marketing Solutions, you can now find productized services in almost every field these days.