“It feels like riding a roller coaster of clients and revenue.”
That’s what owners of service businesses like agencies or consultants often tell me.
They say they feel stuck.
The endless ups and downs of finding new clients and meeting revenue goals…
The lack of time needed to actually grow their business…
It can be disheartening.
They often ask me how to transition their business away from custom services to a productized service business.
But listen, service businesses are the easiest kind to start (although they’re the most challenging to scale).
To start, all you need is a client and BOOM, you’re in business!… You don’t even need up-front investment.
Today, I want to hammer home for you the massive benefits of owning a productized business vs. a non-productized one.
And by the end of it, you’ll see that the main difference is owning a productized business rather than being owned by a non-productized business.
For this, I interviewed a bunch of successful entrepreneurs who, like me, have launched profitable (6 and 7-figure) productized businesses.
In this article, I’ll tell you…
- Inspiring real-world examples of successful productized businesses you can model.
- The top benefits of running a productized business service.
- And the most useful tips for how to productize a business that you own (and break free from one that ends up owning you).
Get ready, this article will tell you what no one else wants to share!
What Does a Productized Service Actually Mean?
And I’ll answer it with an example…
When I was a kid, I used to make money whenever I could.
In the summer, I would wash cars or tables at a restaurant.
In the fall, I’d rake leaves on the ground.
In the winter, I’d shovel snowed-in driveways.
And I remember a particularly terrible blizzard that hit New York one time.
Well, I managed to earn $1,000 in one day.
And $1,000 is like a lot when you’re broke (which was my case).
So anyway, to earn that money during the blizzard, I hired a few friends to help me shovel my neighbors’ driveways.
I pre-sold homeowners around my block the day before the blizzard on my “shoveling services.”
This let me take advantage over the competition because I offered my services before them.
And all it took from me was a bit of sweat equity to get my own “shoveling service business” off the ground.
With that being said, a productized business is when you sell a service that’s packaged. And the delivery of that service is so well-systemized that the company can eventually run without much of your input.
It’s called “productized” because the service is so well and clearly defined that it is almost the same as if your clients were ordering an actual product and receiving it in a package or a box.
In this example, I had streamlined the shovelling process so much (hired friends/employees, pre-sold to customers, etc.) that what was a service business (shovelling) actually turned into a productized business as a result.
Why Do I Need to Own a Productized Business & Not Be Owned by a Non-Productized Business Anyway?
If you’re looking to start your own business, service businesses are the easiest kind to start.
Because they require zero up-front investment (aka: you need no money to start it).
All you need is a client (like my neighbors during the blizzard) and voilà, you’re in business!
It’s as simple as that.
However, there’s one downside to starting a productized business.
The problem is that service businesses are also the most challenging ones to start because…
- How do you efficiently find, educate, and convert client leads? (The top priority for marketers nowadays is generating leads according to HubSpot).
- How do you better qualify leads and sell high-ticket services to them? (23% of salespeople say what they need most from their marketing team is better quality leads according to InsideView).
- And moreover, how do you keep taking on new clients when your skills and time are limited?
The solution is to start (or transition to if you already started your business) a productized service.
You need to own a productized service to solve all the issues listed above.
And the easiest way to do that is by packaging the service and systemizing its delivery .
Think about when you order a package on Amazon.
The package is delivered right to your door. And you don’t see Jeff Bezos involved in the process, don’t you?
Packaging your service will let you eventually let the business run without you.
And hey, if you already started a non-productized business, you can always transition to a productized one.
I won’t tell you it’s easy. But I did it.
I transitioned AutoGrow to a productized service in 2015 and then in 2017. I figured it out the hard way but it worked.
Here’s a graph of revenue from the first 11 months after I relaunched it in 2015…
And here’s another graph of revenue when I relaunched a revamped version of the service in April 2017.
We went from 0 to making over $230,000 ARR (Annual Recurring Revenue) within 60 days of launching.
Pretty impressive, huh?
But since then, I haven’t stopped learning, reflecting, and growing as an entrepreneur.
I even wrote an ebook called “Productize & RELAX.”
In it, I teach you:
- How to productize your business in terms of what you sell.
- How to package and sell your service on your site.
- And how your business should operate to deliver value for your clients, independent of you.
Tips & Benefits to Productizing Your Service by Successful Entrepreneurs Who Would Know [PLUS Examples You Can Copy]
Some of the entrepreneurs featured in this article recently also shared their strategies on how to market their companies during the CV.
I’ve found the insights taken from these interviews really useful. Because they each teach us some critical nuts-and-bolts advice for building and scaling a successful productized service.
Check them out.
Productized Service Example to Model #1: Scribe
“We want to be the people that helped everyone on earth write their book, and did it in the best possible way. We want to be the people who stepped up and did everything they could to help in the way they knew best.” – Tucker Max
That’s Tucker Max, the Co-Founder of Scribe.
This productized service example offers unique programs designed to help people write, publish, edit, ghostwrite, and market their books.
Their mission is to help everyone write a book.
Because writing a book is a challenge (tell me about it! I’ve been writing 3 all at once).
It takes time to outline, draft it, rewrite, re-read it, editing—and that’s just for creating it.
But this service is specifically useful for entrepreneurs and authors who want to write a book but don’t have the time to do so.
For instance, Scribe collaborates with entrepreneurs. They interview them and then turn their knowledge and their own research into the actual book.
Learn from Scribe’s Founder, Tucker Max, to Successfully Productize Your Business
I asked Tucker what’s the biggest benefit of owning a productized service, and here’s what he said…
“There are two major benefits to productized services, and they are intertwined: Scalability and leverage.
Having a properly productized service means it can be scaled far beyond you, and serve dozens, hundreds, thousands or tens of thousands of clients more than you could do yourself.
This is what creates the ultimate competitive advantage in life—leverage. You can do so much more with so much less when you can scale—assuming you do it properly.”
Tip from Tucker Max to Anyone Looking to Transition to a Productized Service
When I asked Tucker for a tip or lesson learned for anyone who wants to make a successful leap to productized services, he said…
“The biggest thing when moving from custom services to productized services is that you have to change your mindset from “I’m the expert, I can just do it,” to something like, “How do I make this so it can be done by anyone (or the properly trained people)?”
You have to become a systems thinker.
You have to let go of the feeling that there is some special magic to what you do. If there is a special magic, that’s fine—but that means you cannot actually productize your service.”
Productized Service Example to Model #2: Design Pickle
It is a productized service that provides unlimited graphic designs to businesses by pairing clients with a professional graphic designer.
Their service addresses the need to hire a graphic designer to create various icons, images, banner ads, etc. for your business.
They offer you a dedicated designer for a reasonable monthly fee starting at $399.
Last year, I interviewed Russ Perry.
And at that time, his business had 2,800 active clients and 12,000+ serviced and was on track to becoming a $100,000,000+ company.
Learn from Design Pickle’s Founder, Russ Perry, to Successfully Productize Your Business
Sure, listening to people’s advice may sound a bit cliché. But when it comes from someone who’s ranked on the Inc. 5000, you seriously gotta listen.
So pay attention to what Russ Perry from Design Pickle shared with me when I asked about the benefits of productizing his business…
“What is really nice about a productized service is simply you know exactly what you’re getting: you know what the cost is and you know what the output is (usually the output is linear, meaning if you pay more, you get more — there is no confusion on that).
Typically, the company that’s running a productized service has a defined process, meaning that the output is a lot more consistent.
This is just huge especially with sales funnels because if you are looking at tasks to create using visual designs as part of your sales funnel, you are going to want to make sure that you have a resource like Design Pickle that can be known quantity[?] as you’re building out those strategies.”
Tip from Russ Perry to Anyone Looking to Transition to a Productized Service
To Russ, it couldn’t be more clear…
“Simple. Niche, niche, niche, niche, niche.
I think we see a lot of competitors at a time for Design Pickle but if you truly want to compete against us it would be like the super niche—you only do graphic design for 20-year-old women launching Instagram brands, something like that.
That is my tip for anybody no matter what type of services you’re focusing on.”
It’s not the first time Russ mentions the importance of going niche.
Last year when we talked, he highlighted the importance of niching and how its definition has expanded since he started his business.
He actually didn’t have one when he first owned his agency.
He also said that even successful entrepreneurs make mistakes and he revealed the ones he made early on by trying to niche vertically, and how he finds his niche in the maturity of clients.
Productized Service Example to Model #3: AutoGrow.co
As I mentioned above, in 2017 we had great success when we relaunched our done-for-you sales funnel service.
The big problem we tackled with our productized service, though, was that it took a lot of time.
Also, it required a wide range of skill sets to create one single effective sales funnel for a business. And it was difficult to find someone with all those skills.
As I said above, service businesses are challenging to start because, as a business owner…
- You’re often busy.
- You know the marketing basics, BUT you’re not a copywriter / developer / designer / ads manager, etc. so you can’t really wear all the hats (although you end up doing it anyway).
- There are a lot of assets to create, apps to manage, tracking, optimization… and on and on…
It’s a lot to handle, to say the least.
But you have to do it to succeed online!
When I decided to productize my service, our solution was to become our clients’ marketing team for just a monthly fee.
Our focus shifted with time and we recently rowed the boat towards a new direction: delegating any digital marketing task to us.
This shift has helped us earn a fistful of testimonials like this…
And all for affordable pricing packages that start at $19 per day.
Learn from AutoGrow.co’s CEO & Founder, Matt Ackerson, to Successfully Productize Your Business
I can tell you that one of the smartest decisions I’ve ever made was to relaunch my business as a productized service.
It’s given me a lot more time to focus more on how to scale rather than how to survive.
If I had to pick what’s the biggest short term benefit from productizing a service, that would definitely be peace of mind.
I felt (and knew) that I owned the business and not the other way around, which happens to most business owners. They’re stuck in the client and revenue roller coaster.
But after we shifted to a productized service, it allowed me to finally relax and took a well-deserved vacation.
And again, productization of services is not easy peasy but definitely achievable and worth it.
Literally, while I was drinking piña colada at the beach, AutoGrow’s clients were being taken care of by my team.
They handled 95% of operations and that let me take breaks more often.
However, if you’re looking to learn how to productize a service, there’s a longer-term benefit too.
And it is that revenue is predictable. Plus, clients get better results and are happier because they have clearer expectations.
Tip from Matt to Anyone Looking to Transition to a Productized Service
So my tip here is very clear.
And for that, here’s another tip: offer a strong win-win risk reversal.
When you do everything custom, like an agency, you can’t afford to offer a money-back guarantee or a free trial.
After all, you’re usually charging thousands and on a per-project basis.
So if one client isn’t happy, that’s going to be painful to refund.
Most service businesses don’t offer a risk-reversal like this for this reason and because you can’t refund your time.
But a productized service is different because the scope of work is limited and expectations are clearer.
Not only that, but revenue is more predictable and the sales cycle is reduced to a single phone call or none at all.
Offering some sort of a 14-day or 30-day guarantee will make the decision even easier for clients, allowing them to buy with peace of mind.
And that’s exactly what we do for each of our pricing packages. They all come with a 100% satisfaction guarantee…
As long as you fulfill expectations, no client will need to exercise the guarantee.
On the other hand, if they do, the business can afford it because of the economics (speed of conversions / pricing) of the model.
That’s why it is a win-win.
Productized Service Example #4: Lead Cookie
He also owns a productized service called Content Allies.
Lead Cookie helps generate high-quality leads for businesses.
In fact, increasing quality leads is the top priority for 68% of B2B professionals according to Business 2 Community.
In 2017, around the same time that I grew AutoGrow to $19K MRR in 60 days, Jake started and grew Lead Cookie to 33K MRR in 6 months.
Pretty impressive, huh?
But actually, 68.56% of Lead Cookie’s revenue is a direct result of Jake’s personal brand.
Lead Cookie provides done-for-you LinkedIn lead generation to generate high-quality leads for your business.
In fact, lead generation from LinkedIn was successful for 65% of B2B companies according to LinkedIn.
They’ve been pretty successful with their productized business model.
They even had 2,083 people opting in for their lead magnet “The Lead Cookie Content Playbook” in less than 18 months with 100% organic traffic with no spend at all. And they saw 28.32% of revenue come from content marketing.
Learn from Lead Cookie’s Founder, Jake Jorgovan, to Successfully Productize Your Business
Here’s what Jake told me about that he considers the biggest benefit of productizing a service…
“The biggest benefit of a productized service is that you sell the exact same thing every time.
There is no customization, no proposals, and no back and forth. You have a conversation, evaluate if it is a fit, and then they either buy or don’t buy.
There is no back and forth on terms and scope. You set your own terms with the boundaries of the service and the prospect can take it or leave it.
The biggest mistake most people make with building productized services is that they bake themselves into the delivery of the service. This makes it hard for them to ever step back because their personal expertise gets tied into the deliverables.”
FYI, I 100% agree with Jake’s comment about the top mistake people make when productizing.
I actually made this mistake the first time I tried to productize my agency.
You want clients to buy your brand and your solution, not you.
Tip from Jake Jorgovan to Anyone Looking to Transition to a Productized Service
“My #1 tip is to hire someone else to do the implementation for you from day one.
If it’s a design service, hire a designer. If it’s a content service, hire a writer.
The problem most people run into is they say ‘I’m a writer so I am going to build a content writing service. Once I am big enough I will scale and hire others.’
That is a mistake because people start hiring YOU instead of your service.”
Productized Service Example to Model #5: Ethercycle
Ethercycle is a productized eCommerce consultancy co-founded by Kurt Elster.
They specialize in designing and optimizing Shopify stores.
They charge fixed flat fees for their services that start at $997 and go up to $14,995.
Benefit from Ethercycle’s Founder, Kurt Elster, to Successfully Productize Your Business
“The biggest benefit of productized services is the ease of selling. Your sales leads will be significantly more qualified.
In traditional consulting, they need to contact you, talk, get a proposal, and then discover there’s a mismatch and you both wasted your time. Not a fun experience for anyone.
With productized consulting, you’re advertising the scope of work and price upfront, so clients have a much easier time making a purchase decision before contacting you. For that reason, productized consulting packages suit themselves well to your initial service offerings.”
Kurt couldn’t have said it better.
Qualifying leads and filtering out the bad ones before you get on the phone is critical when selling your productized service.
And it’s exactly what we are doing at AutoGrow.
We recently introduced more friction into our funnel before people book a call. We did this because some people were booking a call and then wouldn’t show up.
So we actually made them watch a short 5-minute demo video right before booking a call.
We kept the “Book Your Call with a Strategist” button inactive for 5 minutes so people would see the video and be educated on our service. Only after 5 minutes would the button become active.
We did this to better qualify leads.
Because 73% of marketing leads never convert into sales according to MarketingSherpa.
And companies that excel at lead nurturing generate 50% more sales ready leads at 33% lower cost, according to Invesp.
Tip from Kurt Elster to Anyone Looking to Transition to a Productized Service
“Don’t overcomplicate your offerings.
Your productized consulting offering should be very straight forward.
No options, no ranges, just a clear outcome or deliverable for a single fixed price.
With experience, you’ll revise the price, scope of work, and sales letter to perfection.
Keep it simple.”
Productized Service Example #6: SpeedKills
SpeedKills is a productized business that provides WordPress hosting services.
One of its co-founders is Vic Dorfman, who’s also the founder of MemberFix, a productized service that helps online entrepreneurs create membership sites as well as troubleshoot tech problems.
He and his team solve a huge problem. A website’s Google ranking (traffic) and its sales (conversion rate) are directly tied to how fast a website loads.
So they specialize in solving this problem by upgrading a website’s speed, increasing security, and saving their clients the time of doing these optimizations themselves.
It’s a fully done-for-you managed service with a unique pricing of $97.
Learn from Speedkills’ Founder, Vic Dorfman, to Successfully Productize Your Business
“In the case of both productized services we run (SpeedKills.io—a managed WordPress hosting service, and MemberFix—a WordPress and Membership site support service, which is by far our biggest business), the benefit I’ve found is a certain predictability that allows you to proceed relatively calmly with growth and improvement.
When you “productize” you’re forced to craft and refine specific terms of engagement along which you and your customers agree to do business.
It takes a while to arrive at terms that benefit you and your customers in equal measure (in a good relationship there should be a mutual net gain). It’s normal to have to refine your terms many times over the lifespan of your business.
What we had before was more of an agency scenario.
Customers would engage us when they needed us and we never knew when we’d get flooded with a deluge of work or left to buzzards with no income for months on end.
Productizing not only allowed us to deliver better value to our customers, but it also evened out our revenue and made our income as a company more predictable which has allowed us to invest in great team members, processes, and growth.
Crucially, over time, these incremental improvements fueled by a more or less predictable revenue stream, adds tons of value to our customers which makes the product more valuable, attracts more business, reduces churn, etc.”
Tip from Vic Dorfman to Anyone Looking to Transition to a Productized Service
“There’s no hack.
You really can’t encapsulate a serious business undertaking in one tip—or even ten!
But thanks to the magic of run-on sentences, I can suggest the following…
Work hard to develop your terms, give your customers the best possible service you can, hire excellent team members (we hire in Eastern Europe exclusively), spend a lot of time on processes / documentation, remember to take days off and insist your team members do the same, fight hard to keep your customers, switch to Profit First accounting, when you can afford it hire an operations manager, and don’t give up. :)”
There’s something specifically true about spending a lot of time documenting processes.
It’s what we’ve been doing at AutoGrow.
Each team member documents their team role responsibilities and workflows and turns that into training for future hires.
We’ve been using this system for some time and it’s been working great already. So every time there’s a potential new hire, we hand them the training and they practically train themselves.
It’s like we productized our hiring process.
Productized Service Example to Model #7: SEOak
SEOak was founded by Jeff Couret.
This company provides professional SEO services for small businesses. And it focuses on helping them solve their leads, sales, and revenues problems.
They offer SEO reseller plans for established digital marketing company owners and eCommerce SEO services monthly plans.
But to get a quote, you need to contact them via filling out a form. They don’t advertise their pricing on their website.
SEOak also delivers long-term marketing strategies for small businesses to increase their ROI.
And after migrating to productized services, Jeff had more time to focus on growing his business without having to actually do the work.
And that’s the beauty of having a productized business, isn’t it?
Let’s see what Jeff says is the biggest benefit of productizing in the next section.
Learn from SEOak’s Founder, Jeff Couret, to Successfully Productize Your Business
“The biggest benefit is the ability to much more easily scope out my processes, which makes hiring much easier.
Before doing productized services, it was almost impossible to hire because I was saying yes to nearly every opportunity that presented itself to me. There was just no predictability in what I’d be doing from one project to the next.
Once I decided to focus on white label SEO, I started doing the same types of things over and over again.
As you might imagine, at that point it’s fairly easy to put a list of steps together and to find the right people to execute the tasks.
And then the major side benefit there is freeing up my own time to focus on marketing my business and growing it instead of always being the only person “doing the work.”
Tip from Jeff Couret to Anyone Looking to Transition to a Productized Service
“One tip is to not give your first customer too much pull when deciding what’s included and what’s not.
I let my first customer basically decide what the first iteration of my first productized service was, and then no one else bought for a few months until I redesigned it a bit.
Instead, I’d suggest putting a package together that 3-5 people in your target market are willing to try at a discounted price in exchange for some testimonials.
This way, you know you’ll have something with more mass appeal.”
Productizing your service is like packaging up a box of cake mix.
The front cover of the box has a picture of how the cake will look like when it’s baked (the end result).
The back of the box has the list of ingredients (tools needed).
The left side of the box has the instructions of the recipe (expectations).
And the right side has the serving size (scope of work).
Finally, your prospective clients will get the box from the store shelf and you don’t have to worry about making the sale.
Because when you sell a service that’s packaged (like a box of cake mix) and the delivery of the service is so well systemized, the company can eventually run without you.
The service is “productized” because the service is so well defined that it is almost as if clients were ordering an actual product.
And with a productized business, you can work on your business rather than in your business.
Now it’s your turn to tell me.
What did you think of this article? Did you relate to any of the examples?
Where are you at today and what do you find most appealing about the idea of productizing your business?
Leave a comment below now. I’d love to hear from you.
Keep productizing, stay focused,