The number one reason you should productize your services is to scale your business so you can grow revenue and profits predictably.
To do this effectively, you must go beyond creating a landing page and adding the services to the price list.
A frequent question is “Are services products?” The answer—it depends. The answer is yes, but only if:
You define the services as solutions to persona’s problems, targeted to a market of customers who have the problems.
Your salesforce knows how to sell the services
Your solutions are repeatable. Delivering the services may involve time and materials, but the value is not derived from the amount of time the consultant spends solving the problems.
How does productizing services help scale my business?
When you productize services they can be bundled and positioned like a product which helps improve your ability to market and sell them. A product is a solution to a persona’s problem.
The better we understand the persona and their problems, the better we can target our marketing efforts, the better our messaging resonates, and the more prepared our sales team will be.
Accenture grew to a multi-billion-dollar business by shifting from custom services projects to standard offerings in the early 2000s.
Make it easy for the customer to buy the service
Talk about the service in terms of the problems to solve and the value of solving them. Sometimes our customers struggle to articulate the value of solving them to gain support internally.
Make it easy for the salesforce to sell the service
By clearly articulating what problems the service solves for the customer also makes it easier for the salesforce to sell it. Adding services may also make it easier to sell the core products because product plus services can get you closer to the “whole product” to solve the customer’s problem completely.
Make it easier for your organization to deliver the services
When you gain clarity on the personas and problems, it becomes easier to market and sell, and easier for the customer to buy. You will see more engagements that look similar, as they are similar customers with similar problems. As you deliver more of these similar projects, you will learn how to standardize certain parts of delivery to make it more consistent and repeatable.
Productizing your services enables you to get more systematic in your delivery, with less unknowns, and improved profits.
More predictable business
This is really the sum of the parts.
If it is easier for you to market and sell your services, it is easier for the customer to buy your services, and it is easier for your organization to deliver your services. This will make your business more predictable.
You will be able to monitor your marketing and sales funnel and gain more confidence in how many leads will turn into engagements; you will be able to predict when you will be onboarding new customers and when you will need certain skillsets. And as your productized services business grows, this predictability will help you as your scale your team and organization.
The three levels of productizing services
Each level of prioritization builds on the one before it.
Productization Level 1 – Product Marketing
The first level of productizing your services is at a product marketing level. As you have a clearly defined persona and problem, market like you would for software or hardware product.
Define a persona and problem
Partner with your services organization to see if you can define a common problem they have been addressing. Partner with them to define the personas and problems. Start a Product Canvas to help you define your many assumptions. If you cannot find a common problem they have been addressing, look at the problems they have been addressing and ask if you think other customers have a similar problem. Perhaps even do some discovery work.
Develop value-based strategic positioning
Once you have defined the persona and problem, focus on your value-based strategic positioning. Brainstorm the related problems to solve that the customer may have and identify problem themes for your positioning. Do the same with the value created from solving the problems, focusing on both tangible and intangible value. Finally, do the same for your differentiation and why you are the best alternative for solving this problem. This is a great place to partner with your services deliver team and anyone else who has engaged with the persona.
Engage with marketing to start testing
With a clearly defined persona and problem, and value-based strategic positioning in place, test your assumptions. The great thing with productizing services is that all you are really testing is the persona, problem, value proposition and messaging. Set-up a landing page, or perhaps two for A-B testing. Create two Google AdWords campaigns (again for A-B testing) and start seeing what traction you get. Is your customer not easily findable on Google or other online sites? Try some e-mails into your customer base and prospects to test the message.
Productization Level 2 – Systematic Delivery
Once you have succeeded at the product marketing level, it is time to shift to the systematic delivery level.
This is critical for two reasons. First, if you are having success with product marketing you will be seeing more engagements, and you need to become systematic to keep up with demand with existing resources. Second, often this growth (if product marketing is done well) will outstrip our capacity and we will need systematic delivery so we can onboard and scale new resources efficiently.
Consistency and scalability in delivery provides you with more predictability in timing and costs, as well as helping improve the profit margins for each engagement.
Productization Level 3 - Automation
Once you have succeeded systematically delivering the service, it is time to shift to the automation level. How can you start automating more of the process?
Which part of the process can be automated? Such as creating a tool to help migrate data, provide quality control, or something else.
Are there robot process automations (RPAs) you could leverage? Are there tools your delivery team created that can be commercialized? If you are dealing with software or hardware related services, are there things you can build into the platform product that can provide automation?
The more you can automate, the more predictable your time and costs, the more you can improve the profit margins for your engagements.
Success at this level starts taking your product from pure services to tech-enabled services, and potentially a software or hardware product that can solve the problem.
Productizing services can be a great way to grow your revenues and your profits predictably by solving more problems for your customers.
Download our free eBook, "How to Achieve Product Success." Learn how to become systematic about discovering, developing, and delivering products.