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HOW TO PRODUCTIZE SERVICES IN IT CONSULTANCIES

Updated: Oct 3, 2023

Productization is quickly becoming the hottest topic in IT consulting firms. Effectively cutting out all proposals and negotiations, what could be better than adopting a new streamlined, predictable process when packaging your consulting services into products?


Productizing your services can be an extremely profitable play, and it can be the golden ticket to creating an IT consulting business that you can sell.


This guide will help you better understand how productizing services in an IT consultancy business can be the best move to ensure future success, profitability and scalability.


Ready to learn more? In this guide, we’ll dig deeper into:


Use the links above to skip ahead to the sections you’re most interested in.


WHAT IS A PRODUCTIZED SERVICE?


A productized service brings together the skills and expertise of a service provider into a standardized solution for a clearly defined target customer. It’s the same offering for all customers, with rigid pricing and a standardized delivery method. The end result is a higher quality service that commands less effort to sell.


On the go, but want to learn more? Watch our helpful video below on how to productize your services.


WHAT IS PRODUCTIZED CONSULTING?


Productized consulting involves selling pre-defined scope consulting services to customers. When consulting is sold as a service, there’s an abundance of proposals that need to be created and customers need to purchase the same item over and over again. Everything changes with productized consulting.


CAN IT CONSULTANCY SERVICES BE PRODUCTIZED?


Most IT consultancy services can be productized effectively, or positioned and sold as a product, including web development and design, customer research, growth consulting, and more.


It’s important to remember that a productized service is always easier to sell when you have a streamlined, repeatable process, and solid proof of customer value. This is needed even more so if you’re slapping a high price tag on the productized service. For instance, customers may be much more willing to purchase an ebook worth $20 with little proof of its effectiveness, but you need to think about how you show serious ROI if you’re looking to charge customers north of $2,000 for your services.


To begin productizing your consulting service, a great starting point is to choose a part of your daily processes that you’d aim to offer to clients on a per-purchase basis and get across to them its specific benefits and how it will aid their own business practice. Something as simple as a landing page can help to pique the interest of customers to see you as a more regular vendor.


HOW CAN PRODUCTIZED SERVICES BENEFIT YOUR IT CONSULTANCY BUSINESS?


We preach a great deal about why every IT consultancy firm should be productizing their service. It’s not as simple as blindly following our advice, you need to be clued up on it if you’re going to perfect it, so we’ve compiled a list of the benefits of productizing your IT consultancy services below.


Grow your business and scale faster


When you productize your services, you create something that is scalable. Service-based business models don’t offer much room for growth as sales are limited to how much work you can complete. Products, however, are tangible units that are separate from you. You can sell as many units as you need and while scaling up your team alongside your sales, or you can even outsource any surplus work.





More consistent revenue and better forecasting


Many service providers face difficulties when it comes to predicting their month-to-month income. If you can relate to this, you might want to consider offering productized services.


These services are priced at a predetermined fee, so it’s much easier to forecast what your income will be for the month. For example, if you provide a custom quote for every project you receive, you may be charging $1000 for one project and $500 for another depending on their requirements.


Operating under a productized service model bypasses this completely, and you will serve one flat fee for every client. It’s a guaranteed way to ensure peace of mind when forecasting your revenue for the coming month.


Defined scope to reduce scope creep


Have you ever felt like no matter what project it is that you take on, that they all end up evolving into something much more complex? Clients sometimes ask you to go above and beyond the original project scope. Productizing your services waves goodbye to that problem.


Scope creep often occurs when there’s no clear instructions or boundaries around what’s included in your package. A productized service means that all deliverables are clearly defined in the package.


When this happens with customers, all you need to do is remind them of what's included in the productized service they invested in. You could even offer to update the parameters of the project with their new request for an additional fee, or you can point them in the direction of someone else who may be able to sort out this request.


HOW CAN I PRODUCTIZE MY IT CONSULTANCY SERVICE?


So now you know why you should be productizing your IT consultancy service, you’re probably wondering how you actually go about making this a reality. Well we’ve got together the various different ways you can productize your service, each carrying its own benefits and best practices.


Service Focused


The service focused approach describes a subscription-based model where customers purchase recurring service packages for consecutive months or indefinite time periods. Such examples include ongoing SEO optimization, regular blog posts, and social media management.


It’s such an appealing concept mainly because many parts of running a business are tedious, and business owners will pay a significant amount to eliminate routine but necessary pains.


Consider all of the recurring services you provide, how long they take to complete, how deliverables are produced, and how much you charge. It’s also worth seeing how much your competitors are charging for the same or similar services, so you can more accurately determine the price in the current market. With all of this information you can then effectively a profitable and efficient subscription-based service.



Product Package Focused


A product focused approach is a fixed price package that epitomizes at least one of your services. For example, a copywriter could sell 10 onboarding emails for $2,000 or one landing page for $1,000.


If you’re selling a service you know inside out, then you have a good idea of how much it costs vs the value it delivers, and customers always want to know how much they’re paying and what they’re getting in return. It’s a win-win situation.


To do this effectively, you need to consider your most common projects and assess the typical scope, how long they take to complete, how the deliverable will look, and the fee you charge. With this, you can work on a standardized offering for the services that go hand in hand with your ideal business model.


Marketing Focused


Commonly referred to as a foot-in-the-door approach, the marketing focused approach is where a small part of your service is taken and sold as a product. Audits and e-books are great examples of this. Consultants can utilize the marketing focused approach to produce revenue and develop high-quality leads.


It’s easier to part with $100 than it is with $100,000, right? Selling a smaller piece of your service builds trust for larger transactions in the future. In order to master this approach, you must consider how you could create a small version of your service and package it into a product. Many consultants for example have developed their “contact us” option into an audit or e-course that can be purchased by visitors to improve their own business by themselves before hiring an external expert.


WHAT NEXT?


This Precursive guide has looked at the wider topic of productization and how this can be useful for IT consultancies. Now you know the benefits of doing so, as well as the different approaches to changing your consulting business from a service to a product. Want to know how to productize your service offerings? Our new playbook, How To Productize Services Delivery, is the free, detailed guide to what you need to do.


Found it useful? You may also want to read:

Visit our Precursive Products page to discover how we can help you deliver a great productized service to your customers. Alternatively, book a demo today to see it in action for yourself.


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