How To Start Productized Service Business in 2021
If you have any skill, I would like to ask - have you been using your skill to earn some money?
If you have, then you might want to read this.
Now, imagine this scenario – let’s assume that you are a content creator who has various clients.
You work with them, trying to fulfill all their content demands while satisfying them and then boom!
You suddenly realize that you’ve been wasting your time trying to fulfill the custom demand of each client – a cycle that you’ve been stuck in for years now.
Apart from that, let’s also assume that you’re a freelancer in the Data Analytics field.
What you do is extract reports every morning, plot it in a B.I tool, you conduct your trends and analysis, then present your observations and recommendations - chances are that you are also in this vicious cycle.
Looking at that scenario, it is obvious that if you want to break out of that cycle to enable you to scale faster and have more time for yourself, then you should consider starting productized service business.
Well, keep on reading and discover its massive potentials!
What is Productized Service?
A Productized service is the creation of a product from a service you perform or currently offer. This is a concept where you build a service package and offer it as a unified product.
When you productize your service, the efforts are concentrated on the setup and maintentance stage. Once you have your productized service in place, your next step is to acquire clients.
Just like many other productized service examples you will be likely focusing on specific type of customer and needs.
This becomes easier for you because it involves offering the same service.
Later you can expand it even further: take all the learnings and for example, move to a software as a service business, offering software solutions.
This single idea, low entry barrier and lean approach makes the productized service a very attractive business concept.
Already hooked and want to know more?
Before I will show you how to start your productized service, let’s dive into business models that apply here:
Productized Service Business Models
In the productized industry, there are mainly three business models that are widely used.
Each has its strengths and weaknesses. So, if you haven’t decided on what model to use, here’s a rundown to help you decide.
This could be monthly, quarterly, or annually. Some are based on contracts, so they offer it again before/after the contract expires.
The bottom line is that you are not offering it for a one-time purchase.
This model is best for those that require long term recurring service.
Companies that offer content creation, social media management, SEO, and the likes will most likely use this business model.
Furthermore, this model allows you to plan and predict your company’s cash flow especially if you have a long term contract with your clients.
One Time Service
This model is suited to a one-time service needs such as reports, audits, surveys, etc.
Companies in need of such services will most likely desire your one-time service. You just need to be specific about the services included in your product.
When deciding on what to include in your one-time service, you must be evaluative to ensure that you’re not on the losing end.
You can alternatively split your productized services and offer those applicable to the needs of the client. This is a win-win situation for both of you. Fewer efforts on your end, less expense at the end of your client.
Foot in the Door Model
This is like giving your clients a glimpse of what you can offer.
In the beginning, you might want to focus on ensuring that they are highly satisfied.
The high satisfaction rating will motivate them to sign up for your other services. They may even sign up for the whole productized service package at a higher price.
However, you must ensure that your tiered services are of great quality that will most likely leave your customers returning to you for more.
Just like SaaS businesses, you would want to work towards ensuring that your customers continue purchasing your service thereby, reducing churn and increasing retention and customer satisfaction.
Why you should start a Productized Service Business
So you probably wonder why should you opt for productized business model? There are various reasons why you should consider having a productized service.
Among them are:
1. It Requires Minimal Supervision of Task
Productized service gets the job done.
Once you have your required systems in place and you are confident that it can run without you then, all you need to do is to work towards getting a consistent inflow of clients while monitoring your business results to ensure that it provides the expected result that your customers expect.
2. Is Cost-Effective
Another reason why you might want to consider a productized service is that it will lower your expenses. Imagine hiring two or three people to work on delivering the service perfectly.
This means that it allows you to easily get started and scale as you grow. Also, now that outsourcing has become easier, accepting more clients than you would ordinarily take on-board becomes easier.
Therefore, it gives you room to grow quicker.
To make it even more appealing; did you know that with a productized service, you can keep your costs low thereby, helping you retain most of the profit while giving you much room for maximum growth.
3. A Great Testing Field
Perhaps you have been considering building a software solution or a tool.
Hold on your horses and ask yourself a question: will it fly? Do you know exactly who is your customer and what they want and how you can make them having superpowers with your solution?
You don’t know that. I don’t know that too.
But the best way to find out is to… start with a service first, before you write a single line of code.
And this leads us to the next point:
4. It Allows You To Get To Know Your Customer Very Well
This is one of my favourites: you will get to know your niche inside-out which will likely contribute to the higher success rate and customer satisfaction.
Becoming an expert in your field is one advantage. Learning you can get to later evolve your business is another one.
A Productized service can be customized based on the desired output. The secret here is to carefully study what you can offer.
Make your productized service flexible so that you can offer that service to various customers.
When you identify the service that you can offer to your various customers, then you do not have to worry about customizing your service each time a customer comes to you.
6. Success Rate Defined
Assuming, your offered service is something you’ve done before as a freelancer, this simply means that you already know if there is a market or need for such a service. Therefore, your service has somewhat been pre-validated since you’ve tried it. Nevertheless, this is one of the advantages of a productized service
7. Revenue Booster
Productizing your service will allow you to serve more clients hence, giving you a boost in revenue.
The process here is to set up your productized service in such a way that it can run without you.
Once you’ve done that, all you need to do is to work towards getting other clients which in turn brings in more revenue.
The time and effort you save for tasks or processes that are already covered by your productized service can be effectively transformed into revenue.
When is the Best Time to Productize your Service?
If you’ve read this far, chances are that you might be interested in the productized service model.
You might be wondering – what is the best time to start a productized service?
First, there’s no ideal time or period for one to start a productized service.
This is because you can always start it anytime. Rather, if you want your productized service to be successful when you launch; then, you should focus on ensuring that there is a need for it.
However, there are certain situations when it makes sense to start productized business:
You Are a Freelancer
Perhaps you have a too much work, your clients ask you for different type of tasks every time you sit to new project or maybe it’s hard for you to find new clients for your freelance business.
You Have a Software Idea
So you want to code up a new mobile app or launch software as a service business. But there is many unknowns and it’s hard to validate the demand for your idea.
This is why launching service first will help you to shape your software/app idea and give you better understanding of your market, your customer, their needs & objections and possible challenges you might run to. Look how much you can achieve with no code, isn’t it?
How To Start Productized Service
So what’s the process of productizing a service or starting a new one?
Starting a productized service may not be as easy as you think.
Although you might know what services to offer before taking the plunge, there are certain factors to consider.
Make sure you consider these following concepts before you soak yourself into the business model.
1. Draw your V-M (Vision and Mission)
Remember that when you switch to a productized model, you no longer work as a freelancer.
You become more of a standard business offering streamlined services to targeted customers.
Nevertheless, you should have an excellent portfolio with a clear vision-mission. It will be best if you research on your target prospects and align your vision-mission along with the information gotten.
2. Create your Roadmap
It’s easy to be overwhelmed with the services you can offer to your customers.
To provide the best-productized service in your chosen field, you might end up implementing too soon or too late.
That is why creating a roadmap is vital.
In this case, you draw a blueprint of your service and determine the stages where you’d need to level up.
At this stage, you should map out your roadmap carefully.
Remember to incorporate baby steps in the roadmap because it is safer than making errors and wasting your efforts.
3. Understand your Services
You may be a jack of all trades. However, for a productized service, offering too many services may hurt you.
This, in essence, does not encourage you to squeeze all services into one product.
To run a successful productized service, you should work towards being a Specialist. To achieve this, follow these simple steps
- list down all the services you can offer
- begin to group them accordingly. You may end up having one, two, or three productized services. It’s okay, as long as you can handle your services most especially during the setup phase.
- pick the service you are best at. This is highly recommended because you’d want to be known as one of the best in that field.
4. Find a Problem your Productized Service can Solve
It all starts with a problem. No matter how good your productized service is, if it doesn’t solve a problem or a need, then you might find it hard getting traction.
Therefore, research on your chosen field, conduct some interviews and do surveys among your target audience. Using the information gotten, you should be able to identify the pain point of your target market. Once you’ve identified it, then it’s time to capitalize on it!
5. Specify the Solution your Productized Service will Offer
After identifying the pain points of your target audience, review your productized service and identify your potential strengths and weaknesses.
Go further to highlight your strengths as the ultimate solution for your potential customers.
Avoid promising generic solutions. Make sure it is targeted and specific.
Final Thoughts on Starting Your Productized Service
Year 2021 will bring many changes to the way people start their businesses and productized service businesses will lead the pack.
Transforming your services into a productized service is a great idea for those looking to scale.
This is like levering your status.
So, instead of working as a freelance service provider, why not create your own business?
Productizing your service gives you more room for growth, wider reach, and better profit.
With proper research and planning, you’ll most likely end up successful in this field.
Never mind the competitors. There are Competitors in every field.
What is important is for you to master your craft and offer it as an excellent productized service that is of the best quality.
So, are you ready to start your dream productized business?
Karen is a senior technical writer and copywriter here at GrowFollowing. Her area of expertize are social media apps and new media.