- 3 Ingredients of a Productized Service
3 Ingredients of a Productized Service
3 Ingredients of a Productized Service
When running Content Pros (one of my past full-service content writing agencies, which I sold to a small PE fund) it took a while to actually figure out how to package up my knowledge, niche down, and align all my energy in the right direction (3 years to be exact!)
Heck, I’m still learning :)
This is why so many agencies when starting out end up saying yes to everything. It’s easy and you get the dopamine hit of a sale. But that dopamine hit is often short lived. I ended up literally saying yes and doing everything, for everyone. And guess what? We grew! but at what cost?
Most service providers start with knowledge around a specific skill.
You may be great at graphic design, a stellar copywriter, or a paid media savant. Being great and skilled in a certain area is what gives us the confidence to start —this is the spark of a service business. But you don’t want to be the Jack of All trades: 1) He is a master of none, 2) He will be incredibly exhausted and burnt out overtime.
Where people get derailed is not knowing how to package up that knowledge correctly, and leveraging the right systems/technology to deploy it in the marketplace. Saying yes to everything and offering services to everyone has a very short runway.
I have discovered that there are 3 key ingredients or elements necessary for creating a successful Productized Service Business.
Like baking a cake there is a core recipe that when followed gets you the desired result. One wrong or missing ingredient however can lead to something inedible.
The 3 Key Productized Elements are:
1. Intellectual Property: This is your specialized skill like mentioned above. This is what you know better than anyone else and what you plan on packaging up and actually selling to your customers.
2. The Technology: This is what you’ll use to help scale and deliver your service. For me this is a mix of both actual tech + leveraged systems.
3. The Service Element or “Mechanism”: This is how your technology and knowledge will be packaged up and ultimately provide value to your customers.
The more you can incorporate these elements into your service-based business, the more streamlined, systemized, and attractive your business will become over the long term. This is the first step. Understanding this will allow you to create a solid foundation to build upon.
You want to avoid starting from scratch for each client and learning the ins and outs of what needs to be accomplished. This is a common trap most “full service” agencies fall into. Instead, you want to have customers. When you have a Productized Service, you don’t have clients anymore — you have customers. Customers buy products, while clients buy services (and your time). Customers choose the type of packaged service (which is essentially a product now) they would like to purchase quickly and expect a fast exchange of their money to the value. Clients require courting, relationship-building, and tailored solutions and they expect longer turnovers — there is a reason lawyers have clients, not customers.
Take note from one of my past customers, Kris Sharma. When he came to me, he explained that he was doing every single task within his agency Webinar Grow.
Each one of his clients had different deliverables and he told me:“I was really all over the place. It basically felt like I had half a dozen part-time jobs''. Kris was not only doing webinars but also funnel building, ads, email marketing, design, and copywriting. Anything and everything associated with the funnel around his core service offering of webinars.
This scope creep of services is far too common and unsustainable. When Kris implemented the 3 ingredients into his business, focused exclusively on producing webinars, and started to scale — that is when he really began to get traction in his business.
There are a couple of reasons why focusing on your Knowledge areas is so powerful:
Customers trust your expertise. You have done this over and again, you have a good portfolio, this is your specialization — all of this makes you trustworthy and lowers any potential risk in the eyes of a customer.
A big fish in a small pond. By focusing on your niche you can get a larger share of a specific market, rather than being a small player in a big market and essentially getting overlooked. As a bonus, being an absolute expert in something and not spreading yourself thin will help with word-of-mouth marketing.
Marketing is easier. You can spend less by advertising just to one customer segment with just one service you provide. Broad marketing campaigns usually perform worse than highly-focused ones.
Do you feel lost? Perhaps now you feel like you couldn’t be further away from productizing your service. Be patient —packaging up what you do in the right way takes time.
You first need to be confident that the business you’re in is the one you want to scale and frankly can scale. Not all service offerings can be productized easily or at all. For example, I have found services offering paid media are more difficult to package.
Your product needs to solve a real pain point for your ideal customer. If it can’t check these two boxes then you need to work and spend your time in this validation zone as long as it takes before building anything.
To sum up:
Your Knowledge forms the “product”.
Technology helps it scale. I wrote about leverage it could create here.
The Service Elements unlock the value for your customers. I wrote more about the Mechanism here. Delegation and bringing smart people on board is part of this process, which you can read more about on Harvard Business school’s website here.