Productized services are services that are sold with clearly defined parameters and pricing. In short, that is about taking any product and transforming it into a service. This trend has been strong as the subscription-based economy developed.
Understanding productized services
When you visit the supermarket to buy coffee, you look for your favorite blend, compare prices and sizes between brands, and choose a product to place in your basket.
The idea behind productized services is much the same. The service for sale has a fixed price, well-defined parameters, client testimonials, and a buy now button just like any product.
When marketed in this way, the service can be sold multiple times over and the business can leverage the attractiveness of price predictability which was once the domain of products only.
While customers see productized services as a compelling value proposition at a fixed price and scope, the individual or company offering the service sees it as a way to scale the business with or without their direct involvement.
More information on who will benefit from productized services is detailed in the last section.
Characteristics of productized services
Productized services differ from more general services in that they target a very specific customer pain point.
In keeping with the predictability of a productized service, the company must utilize a standard, repeatable delivery process that is smooth, efficient, and enjoyable for the customer.
Productized services tend to be presented as ready-made packages with price tiers that are simple to understand.
This enables sellers to avoid repeatedly explaining their offering to new clients and helps them better predict future cash flow.
For clients, there is extra peace of mind because they clearly understand what they will receive (and what is expected of them) and can choose an option that fits within their budget.
In terms of revenue models, there are a few options to choose from. Many SaaS providers offer subscriptions, for example, while others may use retainers or bill for one-time jobs.
In most cases, it’s worth reiterating that the price is fixed and there are several options to select from.
Who will benefit from productized services?
Where do productized services work well? Here are some examples:
- Freelancers – productized services may be ideal for freelancers such as writers, designers, and marketers who have become burnt out billing by the hour and trading their time for money.
- Agencies – digital and non-digital agencies can also use productized services to scale and drive more predictable revenue growth. This enables them to offer their best services to their best clients without the chaos that ensues when simultaneously dealing with clients who have different needs.
- Software companies – these companies can use productized services to help clients implement or onboard software (even if they are not the creator of the software themselves).
- Start-ups – in the life of a new company, a productized service can be used to validate the business idea, grow revenue, or self-fund operations. These services can also assist with the rapid creation of an MVP that can be built out over time and help the business survive into the next phase of growth.
Productized service examples
- High Spark (design) – a creator of presentations and stories for Fortune 500 marketing and sales campaigns.
- Audience Ops (content) – a company that offers content, podcasting, and case study services to help clients grow their businesses.
- Growth Geeks (marketing) – offering on-demand digital marketing services such as Facebook Ads, social media content, newsletters, and LinkedIn Groups.
- Productized services are services that are sold with clearly defined parameters and pricing. They differ from more general services in that they target a very specific customer pain point.
- Productized services tend to be presented as ready-made packages with simple price tiers. This enables sellers to avoid repeatedly having to explain their offering to new clients and helps them better predict future cash flow.
- Productized services work well for freelancers who are tired of trading their time for money. They are also ideal for start-ups, software companies, and those utilizing the agency business model.
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