The Complete Guide to Productized Services [Updated 2022]
Here's a complete guide on how to start and grow a productized service in 2021.
When I started my productized service, I wished a complete guide to help me in my productized service journey existed.
I had questions such as which type of clients I should focus on, how much I should charge them, and even what type of services I should offer or how to manage to manage our team.
This is why I started this guide.
My goal is to provide you with a complete overview of what productized services are, how to start productizing your services, and how to create systems to allow you to scale.
Whether you are just getting started and want to learn more about this business model or already are running a successful productized service and want to learn how to scale it, this guide is for you.
Let's get started!
What is a productized service?
A productized service is a service that is bought and sold just like a product.
Imagine going to the supermarket and buying a box of cereals: You choose your favourite type, look at the pricing, and place the product in your shopping cart.
The idea of productized services is the same:
The service has a fixed price, well defined scope, client testimonials, and a buy button to purchase it, just like a product.
Examples:
- Graphic design subscription for $499/month
- One-time SEO audit for $199
- Landing page design for $1500
What are the benefits of productized services?
1. Create a scalable business
The first benefit of productizing your services is scalability.
A well-defined service reduces scope creep and you can create systems to delegate service delivery, freeing up your time as a business owner and a more scalable business that runs without you.
Let's take an example of two different agencies: A traditional agency, and a productized service.
Traditional agency:
- Proposals
- Price is dependent on project
- Clients usually pay 20-25% upfront, then 75% after
- Delivery time depends on project length
- Project differs
Productized agency:
- Fixed scope, no proposals, services are packaged into "products"
- Fixed priced
- Get paid upfront
- Fixed delivery
- Project is always the same
2. Easier to sell
The second benefit of productized services is that they're easier to sell.
Because the services are packaged and the price is fixed, there's no back and forth on negotiating the scope of the project. Clients buy the services off the shelf, and you or your team executes the service.
3. Get paid upfront
Most freelancers or agency owners wish they would get paid upfront. This is possible with productized services! Create your packages, set your pricing, and get paid upfront for your services.
4. Better experience for your clients
Finally, productized services can also deliver a better experience for your clients. Unlike having to get on calls, they can simply order services from your website as if they would be purchasing a product off Amazon. The experience is much smoother and frictionless.
Examples of productized services
Productized services can be found in pretty much all service industries: From accounting, to graphic design, SEO, content writing, as well as marketing services.
Here are a few examples of productized service:
SEO and Content writing services:
- SeoButler offers a variety of SEO and content creation services.
- Detailed offers video SEO audits for a fixed fee.
- KoalaRank is a B2B content writing service with different monthly packages.
- PodcastBloggers turns podcasts into blog posts.
Design and video editing services:
- 55knots is a done-for-you graphic design service based in Australia.
- Video Husky provides video editing to YouTubers for a flat monthly fee.
Marketing services
- FuseMate provides on-demand marketing services.
- ZenOutreach provides done-for-you LinkedIn lead generation services.
- HubSnacks provides on-demand Hubspot tasks for a flat monthly fee.
- GetRhys provides an on-demand marketing consultant,
E-commerce services:
- SellerCandy is a done-for-you Amazon Seller Central service.
- Tailry focuses on small Shopify tasks as well as e-commerce image editing.
Legal, finance, and accounting services
- LegalNodes focuses on services for startups
- Bench is a done-for-you accounting service for US-based companies
- Firstbase provides done-for-you US company incorporation services
Want more inspiration? We made a list of 100 productized services examples.
Productized service business models
There are different ways to price your productized service.
1. One-off fee model
The simplest way is to set a one fee for your different packages.
Examples:
- 300 words blog article for $195
- 600 words blog article for $295
- 900 words blog article for $350
2. Retainer model
Another model which is very popular among agencies as well as professional services and coaches is to offer your services on a retainer basis.
Examples:
- 3 articles (up to 3000 words) a month for $495,-
- 6 articles (up to 6000 words) a month for $895,-
3. "Unlimited" small tasks for a flat monthly fee
A newer model which is popular among Wordpress maintenance and Design productized services is the "All you can eat" productized service, or "Unlimited". For a flat monthly fee, clients can submit as many tasks as they want and these are usually done one by one.
Examples:
- Basic: One design task at a time for $399
- Premium: Two design tasks at a time for $799
- Ultimate: Up to three design tasks at a time for $999
How to start productizing your services
If I had to summarize how to start productizing your services I would say it boils down to three things:
- Focus on a niche: Focus on a niche and a simple core offering.
- Set expectations: Create well defined packages for your services with what you do and do not do.
- Create systems: Having clear processes and systems to ensure service delivery can be handed over to your team and/or is more efficient.
Let's jump right in!
1. Mindset shift
The first step to successfully productize your services is a mindset shift.
Te main problem with traditional freelance or agency work: The feast or famine.
Some months you'll be overwhelmed with work where other months you won't have other months to do. Add this with your overheard and this can be a very stressful business to run.
Most agencies and freelancers have no clear scope, no ideal clients in mind, and no recurring revenue. All of this makes it hard to create a repeatable and predictable business.
So how do you do overcome that? By productizing your services.
Productizing your services starts from deciding what you want to do, for whom, at which price, and under what terms.
- Your core offering: What services are you offering?
- Your pricing: At what price do you offer?
- Your packages: What is included / excluded in the packages you offer?
- Your clients: Which clients are you focusing on?
- Your service delivery: What deliverables will you send to your clients?
2. Focus on a niche
I love the following sentence: "Riches are in the niches"
Can you find 100 clients paying you anywhere from 100 to $500/month?
If so, you could have a $10,000 to $50,000/month business which is great as a solo freelancer or agency founder with a small team, especially if you can have 50-60% margins (more on that below!)
Focusing on a niche gives you a distinct advantage:
You can stand out from the competition.
Examples of niches:
- Flowout: Webflow maintenance for a monthly fee.
- WPBuffs: Wordpress maintenance for a flat monthly fee.
- Hatchly: On-demand graphic design for UK-small businesses.
What makes a good niche for productized service?
- Defined: Can you define clearly the service you offer and the type of client you're targeting? (Example: On-demand graphic design for marketing teams)
- Ready to purchase your services: Do they have the budget to purchase your services?
- Reachable: Can you find a way to reach out to clients in that niche (via Linkedin, SEO, ads, or other channels?)
Once you have decided on your niche, here's the next step:
3. Define your ideal client
Once you have picked a niche (let's say : Wordpress maintenance) it's time to define who your ideal clients are.
Once you know your ideal clients you'll have a better understanding of their pain points (and how your service is positioned to solve them) and it will give you more clarity for marketing as well (where to acquire them)
Step 1: Define your clients' pain points
The first step is to know what problems your clients want you to get solved.
Why?
That way you'll be able to later define your service properly and core offerings better.
Let's say you're starting a video editing service for YouTubers.
A good way to find pain points from those YouTubers is to run interviews or research online (Quora, Facebook groups, Google, ...) and ask questions such as :
- What's your biggest goal this year?
- What are your plans to reach that goal?
- What do you spend most time doing?
- What is your issue when doing X or Y?
- What solutions have you tried in the past? (Tools, services, ...)
- What did you like and dislike about that solution?
- How often do you need to do X or Y?
The answers could be:
- My biggest goal is to grow my YouTube channel to 100,000 subscribers.
- I spend a lot of time researching content ideas, producing content, and editing videos as well.
- I am not really good at managing video editors and their work load.
- I have tried hiring off UpWork but vetting and interviewing candidates takes time.
- I have tried editing myself but I do not enjoy it.
Interviewing your future or existing customers is a great way to know their pain points so that you can create the perfect service for them.
Tip: Use the language that customers use to describe their problem in your marketing copy.
Step 2: Find the attributes of your ideal customers
Once you know the pain points of your market, the second step to define an ideal customer profile for your clients is to find the attributes they share.
Why?
While your service might be great, it might only fit a small subset of customers and not all of them. Focusing on the wrong type of clients can lead to a higher churn and clients that are never satisfied no matter what you do.
Let's take again the example of a video editing service.
Say you target a channel that has only a few subscribers and doesn't make money yet. They tried your service but churned after 1 month. Reason: They only needed one video edited, and decided to do it themselves for the future.
On the other hand, you find a bigger channel that does a lot of product reviews, has a blog, a newsletter, and has a small team running the business. This could be a way better fit for your service!
Here are some examples of attributes you could have for your ideal customer profile:
- What is my ideal client team size?
- What are their revenue?
- What is their average spend on marketing?
- What is their industry?
- What tools or technology do they use to run their business?
- What marketing activities do they focus on?
4. Package your services
Once you have found a niche and who your ideal clients it's time to decide what services will you offer and your pricing.
Step 1: Define your service scope
My biggest learning here: What you don't do is as important as what you do.
Let's take an example:
Say you run an on-demand design service. On top of the usual design requests, your clients might request for other services such as animations, video editing, or even help to turn these designs into code.
Sure, it might seem like an opportunity to upsell your client and generate more revenue, but it might also add operational complexity to offer such services (different staff) and a lack of focus (the more targeted your services are, the clearer it is for you to pick a niche that needs them). It's thus very important to define what you do and don't do.
Here's an example from Hatchly, an on-demand design service in the UK:
They created three different packages and set expectations upfront with their prospective customers.
They also added a FAQ where they mention what is included and not included in their plan:
A good way to set expectations that is to create a scope of service page on your site as well as a FAQ.
For example you could set the following expectations:
- What services you offer / do not offer
- Who your service is for (example: "Perfect
- How long is the turnaround
- Any set up fees
- Cancellations / refund / money back guarantee policies
- Who your service is for
Step 2: Create your packages
Once you have decided the scope of your service offerings, it's time to create your packages and the details.
Here are some questions to ask when creating your packages:
- Do you want your clients to get on an onboarding call with you or purchase your packages directly from your website?
- Do you focus on one-off or recurring services?
- Do you offer a free trial?
- Do you offer a money back guarantee?
5. Test your value proposition
Once you are ready with your niche, have an ideal client in mind, created your packages, it's time to test your value proposition.
Step 1: Ask for feedback
The best way to this: Talk to potential clients.
You can network on communities (Facebook groups or Slack communities are a great way to find B2B clients) where your clients might hang out.
You could offer for example a $25 Amazon gift card for anyone getting on a call with you and giving you feedback.
Step 2: Create an irresistible offer
Another way to test your value proposition is to create an irresistible offer for your productized service.
For example:
- Your first blog article for xx$
- Your first month of ... for xx% off
- Free audit of ...
- Get 5 ideas for ...
The great thing about these irresistible offers: You'll know more about what clients want but you'll also build useful case studies. After your offer you can ask for a client testimonial for example.
You could either go for cold outreach to promote your irresistible offer or offer it in the communities you are a part of.
6. Create a high-converting productized service website
The next step is to create a high converting marketing website for your productized service.
Your website can be divided into three main goals:
- Communicate your value proposition.
- Convey trust
- Convert visitors into sales opportunities
Step 1: Communicate your value proposition
The first step is to quickly communicate what your service is about. Here are a few things you could include on your website:
- Your tagline
- Your services
- How it works
- Your pricing
- Help centre
Step 2: Convey trust
The next step is to establish trust. Many visitors do not know you and it's important you have social proof (case studies and testimonials) as well as a personable website (pictures of your team and contact details) to build trust.
Your goal here is to convince prospects you can fulfil your promise.
- Case studies / testimonials
- Your customers
- Examples of work
- Watch demo
- About us
- Contact us page
Step 3: Convert visitors into sales opportunities
The last goal of your website is to get your vistiors to take an action. For example: Downloading an ebook so that they're subscribed to your email sequence, or booking a demo with you.
- Your foot-in-the-door / irresistible offer
- Resources
- Newsletter
- Chat bot
- Schedule a demo
7. Set up tools to run your operations
Here are a couple of useful tools to run your productized service:
1. Billing and accounting
Stripe is one of the most popular options to bill your customers.
Also, if you decide to run a subscription-based productized service, ChartMogul is a great tool to give you deeper insights in your subscription data.
For accounting, Bench (which is a service with a software) is also great (only for US based companies).
2. Sales tools
To handle customer inquiries on your website, Intercom, Crisp, and Tawk.to (which is free) are some great live chat options (we integrate with all of them at ManyRequests).
Calendly is my all time favourite tool to schedule appointments with clients. You can also connect it with Zoom or Google Meet to handle your sales calls and demo appointments.
Having a cold email outreach tool such as Mailshake or Snov is also a great way.
Finally, LinkedIn Sales Navigator is a great database to find leads as well.
3. Marketing tools
To build your website Umso is a great no-code option. Webflow and Wordpress are two other good options as well.
For email newsletters and sequences, Mailchimp and Active Campaign are great tools.
Google Analytics as well as privacy-focused analytics tools such as Plausible is also a great way to track traffic and conversion goals for your business.
5. Client portal and team management tool
Finally, having a client portal for your business helps you get all communication and requests in one place. You can use ManyRequests to create service intake forms, manage client requests, and share files with your customers all in one place.
For managing your processes and team, Notion is a great tool (for internal documentation and resources) as well as Slack for day-to-day communication.
8. Find a profitable marketing channel
This probably the second most important advice to run a successful productized service:
You need to find a profitable way of generating new leads for your business.
This means finding a marketing channel where your cost of acquisition is lower than your expected customer lifetime value (more on that below).
There are various channels that work well to acquire B2B clients such as cold outreach (via email or LinkedIn), networking and building relationships on communities, as well as SEO and ads.
A good advice to market your productized service is to think of your marketing as a funnel: Depending on which stage of their buying journey your prospect is at (awareness, consideration, decision), execute different tactics.
Here are also a couple of evergreen tips to run marketing for your productized service:
1. Leverage your case studies
A super important asset for productized services is case studies. You can re-use them in your ads, email, and cold outreach campaigns.
Focus on building high quality case studies early.
2. Build your network
A second tip is to build a solid network. Join and participate in communities where your target audience hangs out.
3. Improve your conversion rate and track goals
A quick win is to improve your website conversion rate. Make your website easier to use, faster, and improve copy. Track conversion goals in Google Analytics.
4. Delegate or automate
Finally, delegate or automate as much of your marketing as you can.
9. Know which KPIs to track
Next step: Numbers!
Tracking important numbers and KPIs is key to grow your productized service so that you can identify leaky buckets but also know where to double down. It's also key to make rational decisions.
- MRR / revenue: If you are running a subscription-based business, your MRR will probably be one of the most important metrics to track to see if your business is growing.
- COGS (Cost of Goods Sold): The cost of delivering your service.
- Gross profit: Your gross profit is your revenue minus the cost of delivering your services. So if you have $10,000 in revenue but pay your team $8,000, your gross profit will be $2000.
- Churn rate: The % of customers which cancel a subscription (it's only relevant if you're running a subscription-based service)
- Customer acquisition cost: How much a customer costs
- Customer lifetime value: The total value that a customer represents for your business.
- Conversion rate: The % of visitors who end up purchasing a subscriber
- New leads generated (New email subscribers, new contacts): This is a metric I really like to track for service-based businesses. You can also further divide it into marketing qualified leads and sales qualified leads.
- NPS (Net Promoter Score): How likely your clients are to refer your service to others. This is a good way to gauge the satisfaction of your clients.
10. Scale your productized service
You've got a great value proposition, paying (and happy!) customers, and a small team.
Next step of your journey: Scale.
Finally, the last step to create a successful productized service is to systemize your processes so that you can "fire yourself" out of the job and focus on tasks with a bigger impact.
Here are a couple of steps to start systemizing your business.
Step 1: Document service delivery processes
One of the first thing I would do to prepare your productized service is to document your processes.
Clear processes make it easier to delegate tasks to your team as well. Your processes will be a single source of truth for how your company works.
Here are some examples of processes you can create for your productized service:
- Client onboarding: How you will onboard a client, which information you need to start working on the client task.
- Communication expectations: How often you will communicate to clients, how you will send deliverables, etc.
- Quality control: How work is reviewed by your team. A great way to do this is to use a client portal software with task management such as ManyRequests where you can quickly filter through requests and sort them per status or activity.
- Hiring: How you attract candidates, vet them, and train and onboard new team members. A good way to do this is to build a hiring funnel (creating an application form, a standardized test, and listing on which websites you'll look for applicants)
Tip: You can create an " internal wiki" that is constantly being updated with templates to do the task or useful files for your team to use when working on client requests.
Step 2: Hire a project manager / team leader
Once you have good processes in place, one of the first roles you can hire for your productized service is a project manager to oversee the operations and quality control.
In addition, you can train your project manager to train new hires and onboard new clients.
Removing yourself from the day to day delivery processes will give you more time to focus on marketing (which you can delegate to!) so that you can scale your business.
Tip: A good way to hire a project manager is to "promote" someone within your service delivery team.
Step 3: Build a scalable marketing funnel
An important step of your productized service growth is to focus on scalable ways to constantly drive new trials or sign ups.
Once you've found a profitable marketing channel the idea is to scale it, this could be :
- Investing in a content creation team or agency to produce SEO-friendly article as well
- Building a sales team
- Investing in paid advertising
Step 4: Other ways to scale
- Develop other products, or build a software solution on top of your service
- Moving upmarket and selling to enterprise
- Acquire other services for their client base or their distribution
- Develop partnerships
Conclusion
Running a productized service is first of all about focusing on a niche and offering your services to specific set of clients. A well-defined set of clients makes it easier to understand the problems they have and goals they want to achieve for their business and position your services as the way to achieve their objectives.
Once you've created your packages and set clear expectations of what you do and don't do, the key to grow your productized service is to have clear processes for every step of your service delivery.
Whether you run the productized service solo or with a team, processes allow you to have a more systemized and repeatable business which frees up your time and allows you to scale.
Interested to know more about productized services? Check out our community for productized service entrepreneurs.
