Productizing services is the solution to your digital agency’s scaling problems.
Selling a service, especially as a digital agency, can feel like a maze without a map. A never ending feeling of uncertainty, with random twists and turns hoping to find the right path. From figuring out how to price the service, how to build trust with customers, and how to ensure consistency, there are so many details to figure out.
You may be thinking “If only I had chosen to sell a product”.
With all of those challenges, digital service agencies are hard work without even considering scalability.
You want to see your agency grow, right?
There’s one problem with that. You’re already strapped for time. Most simply put, your current service-based model does not leave any room for growth.
Something has to change.
Here’s the good news - you can use the principles of selling a product to sell your services. It’s called productizing services.
First Of All…
Is productizing even a word? That’s what I thought to myself when I first heard of the concept. Because of my initial doubt, I looked it up. Basically, Oxford says it is a word, so I went with it.
If you were like me, you spent a significant amount of time in business school learning about the difference between a product and a service. Just in case you didn’t (or maybe didn’t keep that at top of mind after your finals), here is a quick recap:
- Products are tangible and can be separated from the provider. They are often physically (or digitally) exchanged.
- Production of the product is often consistent and a level of quality can be expected. Quantity of the product is measurable.
- Features and benefits are obvious and often visible. All of the senses can be used to experience the product.
- Products are easily comparable to other similar offerings.
- Services are intangible and cannot be separated from their provider.
- Environmental and contextual factors have a significant impact on the quality of the service and it is rare to have precise consistency.
- Features and benefits are often not evident. The user has to trust the provider’s outcome promise.
- The service provider’s skill can only be measured and assessed by previous work and experience.
- Services are very challenging to compare to the competition.
Services often leave a sense of satisfaction that comes with a finished project behind rather than a useable item. The end consumer has to have a lot more trust in the service provider and has to risk the variability of the outcome.
As you can tell, products are far more black and white because you can see them, touch them, smell them, and sometimes hear or taste them. Services sit in the grey area. Think about them as the Santa Claus of offerings. If you believe in them, they will come and leave you with what you asked for, or maybe what you didn’t, like coal.
Turn the Service into a Product
This is the solution to your scaling challenges. Crazy idea. I know.
Don’t take this too literally. You’re not turning your agency services into magnets or anything. The goal is to give some of your services the illusion of having the same qualities as products to be able to sell more with no extra service time.
Productizing services can mean automating your offerings. This type of offering allows your customers to be more independent in their purchases with you. Be aware that instead of relying on touch points and relationship building, the customer will be relying heavily on brand reputation.
There are a few different ways you can make the buying decision easier for your customer without solely relying on your branding.
- Make sure the productized service has a catchy name, a description highlighting the value proposition, and some graphics that pop.
- The contents of the offering should be clear. How much do they get? What will the benefit of the service be?
- Highlight the process of how the service will be delivered or how it will work (the easier the better).
- Include the price. Make sure it is both reasonable and justifiable. By this point, they should already be wanting it, so as long as the price is right, you’re golden.
All of this is could be wrapped up in an online offering that is completely automated. That way, your only job is to create the content.
Productizing Services in Practice
The concept of productizing services has become a popular route for many online service-based businesses. What’s great about that is there are some great examples to follow, some other examples to learn from, and hopefully some inspiration to help you implement this model.
When you productize your services, it will be unique to the content you are offering. We will talk about three categories that content may fit into: DIY and Informative Content and The Subscription Model.
DIY and Informative Content
This is content that helps the consumer do something. It could be a how-to guide, an internal audit, a step-by-step program, an e-book, a video course, a freemium program or anything else that teaches the user how to solve a problem they are currently struggling with at a much lower cost than hiring someone.
This type of content is best suited to companies who offer a higher priced service. It is a way to provide value to those who are skeptical or not ready to spend the type of money you are asking for. This type of content is often times a one-time purchase. It’s kind of like giving them a sample or a travel-sized option.
Make sure that this content is useable. They should be able to leave the content with a clear plan of action. It should also clearly direct them to buy your higher priced services.
From a marketing funnel standpoint, this is like earning revenue from your BoFu content.
Some of the best examples of these DIY Content pieces are:
You’ve probably seen the Consulting.com advertisements with Sam Ovens. His free webinar brings you in with the promise of helping you start your own 6 or 7-figure consulting business. From there, students can purchase further courses and engage and receive coaching from Mr. Ovens and his team.
The reason this falls in the DIY Content category is it provides the consumer with a how-to, step-by-step guide. It is also cheaper than hiring a personal career coach.
Consulting.com has done a lot of things right. For one, all of the free content is all automated. A new user does not cost Sam Ovens or his team any extra time. The price is also right. It is less expensive to take one of Consulting.com’s courses than go through with a business coach.
SEO is one of the more challenging areas of marketing to wrap your head around. It can be difficult to do it effectively. The Hoth wanted to simplify this for businesses by both offering SEO services and products.
This Daily Rank Tracker is a white-label freemium product that is automated and easy to use. This SEO tool is a fantastic example of how companies can build trust and grow revenue without adding to the workload.
Vendasta Snapshot Report
The Snapshot report offers a look into your company’s online presence and prescribes actions to improve in whatever area your company is lacking. This is a way for the user to audit their digital marketing performance independently and from there, determine what services they would be interested in purchasing.
This DYI and Informative Content gives an introduction to how the company is doing at a low cost. It is like having a coach standing over the shoulder to pick out all of the small problems and give suggestions for improvement.
Many people - especially busy, successful people - want to write books. Because of this demand, there is now a service to help those people reach their goals. Scribe Writing has not only come into the picture as the service provider, but as a productized service provider.
Starting with the basic free version, Scribe has created courses to write, publish, and market your next book. From there, there are different price levels to correspond to the author’s goal.
This is a great example of productizing services as it combines DIY and Informative Content with their paid services. After the client has taken value from the free courses, they have the opportunity to choose what to purchase out of the itemized lists within each package.
In this example, book writing, publishing, and marketing is a customizable menu-style. It’s as if you were ordering a custom product.
By now, you’ve probably heard of the recurring revenue model. Your customers pay a monthly or annual fee to get access to your services or receive products on a continuous basis.
Some great examples of this that you may already use include Netflix, subscription boxes like FabFitFun or the Dollar Shave Club, and intellectual course platforms like LinkedIn Learning. More traditionally, this model has been used for magazines and gym memberships.
The reason the subscription model is so popular is that it adds to the lifetime value of a customer. It is much easier and cheaper to keep existing customers than it is to get new ones, so making sure you get the most out of each customer is the best business practice.
Think about the last time you subscribed to a free trial or paid for a subscription with the intention to cancel it shortly after. Did you remember to cancel it on time? Probably not. Don’t feel bad, we’ve all done it, and that’s why it’s one of the best revenue models for companies trying to incorporate productizing services in order to bring in a more consistent revenue stream.
A major part of your branding and marketing is dependant on great imagery. That being said, not everyone can afford to keep a graphic designer on hand. That’s where Kapa99 comes in.
The subscription service has the clients pay a fixed monthly rate for unlimited graphic design. Unlimited may sound scary, however, there are very few clients that will abuse that privilege.
Kapa99 is unlike many other companies offering a similar service as they have no contracts, meaning clients can cancel anytime. That’s some pretty great value!
Similar to Kapa99, RipplePop offers unlimited services with a monthly fee.
The idea of unlimited comes up again, this time with WordPress help. Using WordPress can be extremely challenging for someone who does not have a background in code or who is not as tech savvy. Having something like RipplePop can be invaluable when even the smallest question comes up.
When using the subscription model, it is not required to provide unlimited services or access. Many other subscription services use a tiered approach, meaning the more the client pays, the more attention they will receive.
When productizing services in a subscription format for your company, take the time to assess what will be of most value and within your team’s capacity.
Running a digital service-based agency is hard. The good news? It is possible to scale without adding an extra 80 hours a week to your workload.
Productizing services helps you to provide value at every price range, sell your expertise as a product package through more automation, and maximize the lifetime value of your customer.
When productizing services for your company, you have the freedom to make it work for your offering and your capacity. There are no specific steps or models that must be followed in order to make productizing services work. They are your offerings so make them work for you!
So now it’s up to you. You can scale, you can grow, and you can continue to build your agency.