The line between a product and a service is becoming increasingly blurred. In a growing industry where competitors are ever finding ways to offer a better, more affordable service to your customers, the way you can offer your services is changing.
Packaging your services is the ultimate way to help your customers realize value and drive customer satisfaction beyond the stratosphere. After reading this guide, you’ll have a better understanding of why you should be creating service packages and how you can start the very first steps.
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WHAT IS PRODUCTIZING?
Productizing, in this instance, refers to the process of turning a service into a tangible product that can be bought and sold as such. With a fixed price and defined scope, productizing focuses on how you can transform a service into a standardized item which can be replicated and sold to customers as easily as one might purchase a sandwich.
A great deal of SaaS companies are starting to think more critically about how they can get their service ready for sale. This starts with imagining how the service can act like a product, which of course is the first step in productization. The basis for productization in SaaS companies lies within a deep understanding of the customer and market in which the product is targeted.
WHAT ARE THE BENEFITS OF CREATING SOFTWARE AND SERVICE BUNDLES IN SAAS?
Bundling as a concept is by no means a recent idea. Think of any fast food chain. Chances are they offer a variety of bundled products designed to appease the appetite of hungry customers.
Software can be bundled as well, and when examining it from the perspective of a sales executive in SaaS, it can be very beneficial.
You should favor creating software and service bundles in SaaS if you’re seeking:
Improved Profit Margins
There are massive financial gains to be made for SaaS by transitioning to a bundle service. What sets this service apart is the potential premium customers will pay for the added benefits of combining multiple services into one package. Customers will pay not only for the added value of more than one service, but also for the ease of not having to have 5 different payment plans for different services. In the case of service bundles in SaaS, consolidation breeds profit.
Better customer experience
At a time when everything is now at your fingertips, accessibility is now at the forefront of customers’ desires. If your software solution provides the customer with more than one type of service, customer satisfaction is bound to be at a higher level because it solves more than one of their potential issues, and it can do so without them having to commit any more time to external research. If you can make things as easy as possible for your customers, you’re cooking with gas.
Greatly reduced market spend
There is a great deal of money to be saved by combining your services and marketing this new consolidation. The obvious starter is that you don’t need to spend money on campaigns for each individual product, saving significant costs on ads and labor. Your marketing team won’t be stretched by producing five different ad campaigns and coming up with content to promote each product.
Secondly, bundling your services together will ensure you’re spending much less time on marketing products with a low price point, which may not carry as high a profit margin than some of your other products.
Better understanding of customer needs
Picture this. A junior salesperson speaking to a prospective customer, listening to their needs when it comes to choosing a software solution. This salesperson is sweating over a document listing your company’s services, each one slightly different from the other. What if the wrong service is recommended? That’s one customer surely gone for good.
Bundling these services will create a “one size fits all” package for your customers, ensuring no confusion over which option is the best to try and sell them. This works both ways. There is transparency throughout your whole team as everyone is on the same page with how to respond to customers’ needs, and on the other end of the phone, the client can be sure they’re getting the absolute best software package that will guarantee to answer whatever problems they’re facing.
HOW TO CREATE SOFTWARE AND SERVICE BUNDLES IN SAAS
Now you know the why, but you don’t know the how. Bundling your software solutions is no easy task, and it will likely take careful consideration and plenty of planning to perfect. Here to start you off, read our tips for creating software bundles in SaaS to get you thinking about the very first questions you should be asking yourself.
Establish what software and service to offer
You may know your individual services inside out, you wouldn’t be choosing to bundle them if you didn’t, but knowing the optimal way to bundle them to ensure the best value is a whole different kettle of fish.
A bundle is essentially a mix of your different services, and each of these services has got to compliment the rest to make it a viable package for your customers. Take Amazon Prime for example. Offering a mixture of different services that wouldn’t necessarily go together, customers can pay for faster delivery, and a streaming service in one package.
Unless you know your customers well and know what they’re looking for, you will find it hard to identify what will add extra value to them, what they will find appealing and what they will want to spend more money on. Before specifying any preliminary bundle at all, you need to make sure you have these answers.
How will you bundle your added software?
Bundling comes in a number of different ways. For example, there is pure bundling, where the customer must purchase all the software at once. There is also mixed bundling, where the customer can add or remove applications into their package at their discretion. The ever-emerging omnipresence of cloud technology has made the bundle a far more attractive solution for customers, and SaaS companies need to utilize it.
In order to make the choice on what bundle to sell, you must first understand your customers’ needs and identify what they are willing to pay to see the first value. Confirm that your customers like your rudimentary product and are willing to use your solution further before hitting them with the bells and whistles. It often comes down to change management. It's impossible to predict all customer behavior, so learn by working with them.
Create a pricing strategy
Very few things affect your revenue as much as pricing does. Striking the balance between value and revenue will spell success or failure for your SaaS company. This looks at the relationship between how much you can help your customers and how you are fairly compensated for said help.
Undercharge, and you’ll bring your business to its knees with development and delivery costs that can’t be compensated for. Overcharge, and you’ll tank growth and deter an endless amount of customers.
There are many different pricing strategies to help you accurately charge for your services. Models such as flat rate pricing can ensure the simplest way to sell a SaaS solution, whereas usage-based pricing can result in a more accurate fee relative to a client’s use of the system. It’s all about finding the perfect fit for your business and the service you provide.
Package your extra software and services like you normally would
If you offer a wide array of software solutions, then it’s a very real possibility that there are some services which will just not fit into a certain bundle, and that’s ok. Although any extra service packages will not be sold in the same bundle, they can certainly be sold in the same way. Although elements like the pricing strategy and even the type of customer might be different, what can and should be standardized throughout your wide array of SaaS solutions is the high quality of service you deliver, from pitch to implementation, to your after sales service.
WHAT NEXT?
This Precursive guide has looked at how you can successfully create service packages in SaaS to deliver the best value to your customers. Now you should have a better understanding of the benefits of creating software bundles, and know how you can go about creating these with your current array of software solutions.
Found it useful? Take a look at our playbook on productizing services here.
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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.
