A simple playbook for productizing your service business
|Tyler Gillespie||Jan 11|
If you are looking to productize your service this is one of the best resources and primers to get started.
This playbook I developed is directly out of my “Designed to Exit” course where I show my students exactly “what” to optimize to ensure your service business is as valuable as possible (even if you never want to sell it).
I figured this would be great to get into more service business owner’s hands for free as a lot of people have expressed how valuable this playbook has been.
Here is the video lesson with the written version below as well. Enjoy 💪!
First, on a high level what are the big problems service businesses face that we’re trying to actually solve?
Neverending workdays (Hamster wheel of doom)
Saying “yes” to everything, and creating their own “scope creep”
Very little to no leverage
Fail to divorce trading time for money
Working with “clients” not “customers”
Struggle with hiring, outsourcing, and delegating
Unpredictable lead flow
Hitting a “scale” ceiling
Not building a long term asset
Large feast & famine cycles
Majority one-time projects
No income diversity & high concentration risk profile
Some solutions to those problems would look like this:
Structuring and positioning your service offering more like a product and thinking like a SaaS business
Serving Customers NOT clients.
Productize + building out leveraged offerings throughout your business
Productizing your service will allow you to solve these problems and build a scalable solution for many unforeseen future problems as well that will arise. You may be asking, “But what does Productizing actually mean?” Well, here is my definition:
What actually separates a typical service business and a productized service?
The “Gap” between a typical service business, and what is a productized service is really made up of “Processes”, "Positioning" and “Expectations”
So where are you in the process and what is the GAP for you right now?
Let’s look at the typical journey of a service business entrepreneur, and see where are the tipping points of “leverage” and “value” in the marketplace.
How might you close the gap to productizing your service and steal from the best business models out there?
Let’s look at the key levers of both SaaS & Product business models that you will want to steal and apply to your productized service business.
So why not just start a SaaS or Product business? Well, as the saying goes the grass is always greener on the other side. Every business model has its pros & cons.
Remember you’re running a service business for a reason. It fits your core strengths. This is why you didn’t start a SaaS or Product business. My goal is simply to help you water your own grass to make it greener.
When you have processes you have predictability
When you have predictability you have peace of mind
When you have great positioning you have clarity for both you and the customer
When there are superb expectations you will have happy & repeating customers
My goal when it comes to positioning is challenging yourself to operate as a SaaS business & position what you do like a Product Business. In this section, we will cover the positioning side of how to sell your services.
Let’s unpack how to position as a product business. I often use the example of closing your eyes and imagining you're selling your services on Amazon.
What would this actually look like for your business?
We have clear pictures of your product
A detailed description of what you will get
Buy Button with the ability to buy once or subscription
Date of when it will be delivered
This is really the norm for an eCommerce store.
When you buy online you aren’t rolling the dice when you make a purchase, and you know exactly what you order, and when you will get it.
Does your service business currently have this type of clarity in positioning when a new customer buys from you?
You may be asking, "So what does actually positioning my service business like a product accomplish exactly?”
Well, the major thing is it allows you:
To create structure around what you do
Offers clarity around what you don’t do
Filters bad customers away
Clearly packages your offer so your customers have incredibly clear expectations around what they are buying from the start
Presents your value proposition with uber clarity
Set’s up the rest of your funnel for success
Makes sales that much easier
What isn't obvious is that your positioning actually travels and carries through your entire funnel.
When you can package up your service offering like this you will be able to actually escape or avoid the most common service business traps most are pulled into.
“Paddle with the current, not against it.”
Now let’s look at how we might be able to position your operations like a SaaS business.
Refining your ARPU (Average revenue per user/customer)
Tracking LTV (lifetime value both “Time” + “Revenue”)
Low barrier/downside to getting started
Knowing your CAC (Cost to acquire a customer)
Enhancing your overall gross margin over time
Now let’s look at some examples of good “productized” positioning to take notes on:
1. Content Writing - Copywriting Crew:
2. Graphic Design - Adpros:
3. Podcasting - Cash Flow Podcasting:
4. General Design - Leave Design
5. Lead Generation - Cleverly
Now let’s first look at a variety of business models you might be able to leverage when implementing or building out your productized service.
Productized Model Use Cases:
New Services: This is when you might be launching something completely new to the market and don't' yet have a business.
Add-on Services: This is when you already have a handful of offerings and you want to "add-on" a new or another productized service to what you are already currently doing.
Transitioning Services: This is when you have been doing traditional project-based work and are looking to escape the service trap and transition your service business into a productized service business model.
The 9 Productized Business Models:
A one-off model - Roast my Landing Page
Done-with-you model - Webinar Grow
Mesh Hybrid model - AdZombies
Packaged based model - Testimonial Hero
Coaching model - Productized Mentor
Performance-based model - Jolly SEO
To see a lot more examples access my Productized Service Database here
We always tend to focus on the upsides of our ideas and fail to actually evaluate the downsides. In one of my favorite business books of all time, “The Road Less Stupid” by Keith Cunningham he outlines his process for “Thinking”. One of the steps in his process is looking at not only the upsides (most common) but also the downsides of a decision (least common).
I’m obviously an advocate of Productized Services but here I want to dive into not only the upsides but the overlooked downsides with the goal of helping you see the whole picture and potential blind spots.
Seamless sales process
Lower labor cost potential
Paid faster and upfront
Growth ceiling removed
Riches in niches
More valuable asset
Have to be diligent in saying “no” to stay in scope
Hard to retain fast-growing customers who want “more”
Systems can kill team creativity
Subject to commodity pricing
Less short term cash and profit potential
Takes substantial intention, time, and process-driven mindset
Getting traction and PMF is a grind
Need to have a proper “runway” of capital + time to dial in PMF
I hope you found this playbook insightful and valuable. If it sparked any ideas I would love to hear from you below in the comments.
To access the entire Designed to Exit course where you can get full access to the other 4 playbooks that will help you in building a more sellable productized service business then simply check it out here.
💡Thinking Time Chief @Productized Services