Productization is becoming more of a mainstay in many consulting organizations, and it’s not hard to see why. Productizing your services can prove to be a very profitable decision and can help you to maximize sales, one of many benefits of productizing.
This guide will help you better understand how productizing services in a consultancy business can be the best move to ensure future success, profitability and scalability.
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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.
Want to learn more? Watch our helpful video below on how to productize your services.
WHAT IS PRODUCTIZED CONSULTING?
Productized consulting is a term which describes how you can package your expertise into a fixed-price, publicly priced entity that people can buy, often as a one time purchase. In a lot of cases, a high-value service is sold as a low-overhead deliverable which can yield you more income but with fewer pain points from a logistical perspective.
CAN CONSULTANCY SERVICES BE PRODUCTIZED?
The simple answer is yes, but that’s not the complete story. Productizing your consultancy services can be a hugely profitable move, but it’s important to always 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 even more necessary if you’re slapping a high price tag on the productized service. Customers will likely be more open to purchasing an ebook worth $25 with little proof of its effectiveness, but you need to work out how you demonstrate serious ROI if you’re looking to charge customers $1,000 - $100,000 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 CONSULTANCY BUSINESS?
Grow your business and scale faster
When you productize your services, you create a scalable entity. 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 find it difficult to predict their month-to-month income. If you can do too, then you might want to consider offering productized services.
These services are priced at a fixed rate, so it’s much easier to crunch the numbers and forecast your likely monthly income. 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, which makes it harder to work out how much you’ll earn month to month.
Operating under a productized service model can help avoid this, 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?
Some clients will ask or even expect you to go above and beyond the original project scope. Productizing your services will simply eliminate 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.
Faster Payments
Productizing your consultancy service simplifies the payment process. There are no more worries when it comes to tracking hours and invoicing because the price and the scope of the project has been defined clearly from the beginning. Cash flow issues can be a serious problem for a number of consultancy firms. A slight delay in payment can create major issues, so businesses must be sure they’re receiving prompt payments so that a healthy cash flow continues to run through their consultancy business.
HOW CAN I PRODUCTIZE MY CONSULTANCY SERVICE?
So now you know why you should be productizing your consultancy service, but you’re probably thinking how you can actually put this into action. Well we’ve got some top tips showing the different ways you can productize your service.
Be warned, productization is not as simple as taking work that your team already does, giving it a catchy name, and adding a price tag. The process of productization is immensely valuable — if you put in the work up-front. That means investing time in:
Gaining alignment between the internal teams that will contribute to the design and delivery of packaged services research to ascertain if your proposed packages will be useful to your ideal customer
Careful consideration of design to ensure the individual services included hang well together, are repeatable, and deliver value
Additional strategic reviews to define how your new packages will be marketed and sold.
Take a look below at the six steps to productizing your consultancy service:
Research - The initial research provides a solid foundation for your service packages to be built on. It includes a thorough analysis of the market and past customer engagements.
Design - During the design phase, you will construct your service packages by choosing the services you want to bundle together.
Build - This part is all about bringing your service packages to life, with the contents of these packages being constructed.
Pricing - When it comes to pricing your consultancy service packages, the best organizations focus on ensuring the pricing promotes the right conversations with customers vs. being overly complicated.
Sell - A very important part of this whole process is knowing how to sell your service packages to your customers. The elements outlined here will help you market your packages and sell them.
Monitor - Once the service package has been created, it’s not over there. You should be able to design and build offerings quickly and launch them to test their effectiveness.
There are different focuses you can have when it comes to productizing your consultancy service. We’ve outlined the key ones here.
Service Focused
A service focused approach is a subscription-based model where customers purchase recurring service packages over consecutive months, examples of which can be ongoing SEO optimization, regular blog posts, and social media management. This is an attractive option for many businesses because it can alleviate many of the tedious and time-consuming processes, and business owners will be willing to pay to get these tasks off their backs.
Consider all of the recurring services you provide, how long they take from beginning to end, how deliverables are produced, and how much you charge. It’s helpful to see how much your competitors are charging for the same services or similar ones, so you can determine the price in the current market more accurately. With all of this information to hand, you can effectively have a profitable and efficient subscription-based service.
Product Package Focused
A product focused approach is a fixed price package that utilizes 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 that you know inside out, then you must have a good idea of how much it costs in comparison to 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 achieve this, 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
The marketing focused approach is where a small part of your service is taken and sold as a product. Also called the foot-in-the-door approach, 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 obviously easier to purchase something worth $100 than it is for something worth $100,000. Selling a smaller piece of your service builds trust for larger transactions in the future. To perfect this, 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.
OUR TIPS FOR PRODUCTIZING YOUR CONSULTANCY SERVICES
We’ve got together some of our key tips on how you can successfully productize your consultancy service. Take a look below:
Make sure you are clear about what each ‘product’ entails and what customers will receive to manage customer expectations.
Have an easy-to-use website that has a clear path for customers to use - create dedicated landing pages.
Take a look at what competitors are doing (what they are offering, their pricing structure etc.) and market yourself in a way that stands out.
Add testimonials and case studies to your website.
Know your service inside out - if you’re selling it like a product you need to be aware of every detail to explain to customers.
WHAT NEXT?
This Precursive guide has looked at the wider topic of productization and how this can be useful for consultancy firms, as well as the different approaches to changing your consulting business from a service to a product.
Want to understand more about how you can productize your service offerings? Our new playbook, How To Productize Services Delivery, is the free, detailed guide to what you need to do. This playbook covers:
Frameworks to design, build and sell services packages
The metrics that are used to monitor success
Sales enablement toolkits and pricing strategies
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.
