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Need To Scale Up? Why Productized Services Could Be For You

February 1, 2018

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There are many consultants, solopreneurs and even agency owners who are looking for a way to scale up what they do.

The lure of earning more money and having more free time leads many to look at solutions like SaaS, apps or other products they can sell on a monthly subscription basis. The temptation is obvious – an in-demand service with regular paying customers can dramatically reduce “feast or famine” periods experienced by most businesses, and requires less hands-on work from a freelancer or principal.

The downside of going into software, apps or physical products is that you will have to invest (often considerable) money into development of those ideas. With 90% of startups failing, investing that money comes with a huge risk.

What if you could simply scale up something you already know and have a known demand for? That’s where productized services come in…

What Are “Productized Services”?

Productized services involve taking that service skill you already have and know well, systemizing it and packaging it for sale as a “done for you” service. The service has a fixed length, scope and price.

For real scalability, the secret to productized services is creating a system which streamlines how that service is provided. This allows your service to keep operating, even without you in the picture.

Here are some examples:

Podcast Motor – Monthly packages for podcast production and editing.

The User Is My Mom – One-off fees, but productizes the service of assessing UX for your website. (If you notice on their website, they are hiring “extra Moms”, this is how they scale the service).

WPCurve – Charges a monthly fee to take care of small WordPress issues, same day 24/7.

Got questions on productized services? We answer your common ones here…

Are Productized Services For You?

Often, the initial struggle for any freelance service provider is seeing exactly how they could productize the service they provide. Any service can be productized, but you may not be able to completely automate everything that goes into it. Take Podcast Motor as an example: they can’t automate the editing of a podcast, but they can put a system in place which makes it a seamless, replicable process.

Brian Casel is a well-known voice on productized services, creating his own and providing advice at Casjam. We asked him a few questions for this piece so you’ll hear from him throughout.

With regard to advice for anyone trying to figure out exactly how their service can be productized, Brian says: “the key is to focus on serving one ideal client with one solution to one problem.” Keep it simple and focused when you are starting out. He hasn’t come across any service thus far that should not be productized, as the same principles can apply to almost anything.

Here are some reasons why productized services work:

Serving A Known Demand

Remember that statistic earlier about 90% of startups failing? One of the primary reasons cited for failure (42%), is a lack of market need for the product. Even pre-validation of your market is no guarantee that you’ll have actual paying customers come launch time.

When you’re productizing your own service, as long as you’re choosing something you know clients will repeatedly pay you money for, you have already established market need.

Even if you’re not sure what that money service is, you can find out without wasting too much time or cash. On pre-validating productized service ideas Brian says: “Productized services can be launched extremely quickly to paying customers, since they don’t require building any software or a fancy website. So validation comes when you work with your first paying customers.”

Customers Are Provided With A Finished Product

Customers like “done-for-you” solutions. Who doesn’t appreciate having a finished product handed over that you don’t have to put any work into?  

Productized services provide this, whereas software or an app requires work on the behalf of the customer to get the finished product. This means that by comparison, customers like the productized service because they don’t have to learn any new skills and tools, or invest time into getting their desired outcome.

Low startup costs

We’re not saying that you shouldn’t build an app if you have an amazing, validated idea, but a common theme for anyone looking to scale up from their one-man band is doing so on a budget.

Depending on your requirements, great software is not generally built on the cheap. Just check out this chart from Rad Development estimating costs and time taken to build some well-known platforms;

1

Yes, you could go cheaper, but you will get something super-basic for $10K – $50K.

In contrast, productizing services that you already offer is a low-cost option. As Brian noted earlier, you don’t need a fancy website or software to have paying clients.

Speaking of your finances, even taking the cost to build something out of consideration, your personal finances can take a hit during the early startup stage, especially if you need to wait some time for a finished product to bring in revenue.

Considering you still need to pay your bills, productizing a service can provide a way to pad your wallet faster, since it is possible to launch within hours or days rather than months.

Quicker Transition Time

The sooner you can transition full-time to your scaleable venture is a win for your time. Many people spend time juggling their current client workload with trying to build up the scaleable venture. This can drag out the time you take to launch or mean you have no free time whatsoever – sometimes both.

Productized services are not only faster to set up, but you can potentially transition clients who you already have onto your new service, giving you a quicker ramp-up than a brand-new venture. On transitioning clients Brian says: “Look for the ongoing pains or benefits you can deliver to a client.  This might be different from the services you’ve been doing on a project-basis.”

The plus side is that you can create something suitable for an audience you already have.

We all need some downtime to rest up, or to switch gears for family, friends or hobbies. Many founders have gone through immense stress trying to juggle the transition period, so a productized service could be your answer to a smoother transition.

A Great Teacher

If you’re used to being a business of one offering project-based services, making the transition into a scaled-up service can be a major learning curve. Productized services give you the opportunity to learn those additional business skills in a lower-risk environment.

Brian points out that a productized service puts you on more intimate terms with your clients than a software product, which means you have the opportunity to learn and refine your value proposition with immediate feedback.

A productized service demands that you think bigger as a business owner and learn to manage people, processes and product as a function of working on, rather than in your business.

Got questions on productized services? We answer your common ones here…

Final Thoughts

Productized services are a great option for anyone looking to offer a scaled-up service from what they do as a freelancer or consultant.

They offer the opportunity to build a consistent monthly income and a low-cost way to scale, especially when you consider the costs of other options such as SaaS.

Most services can be productized, but the key is to first focus on one customer with one particular problem that you can solve. You don’t even need fancy programs or websites – a productized service can be launched quickly and at a lower risk to business owners. It could be your ideal choice to scale up…

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