SBM 017 : How to Make Money Selling a Productized Service with Ryan Meo

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How to Earn a lot of Money Through Productized Services

Offering services in the market through your business can make for a good business model. So as long as you are skilled in what you are offering and there are systems in place that make sure that quality is always delivered, then your services should allow you to earn considerably in the market.

However, there is always a problem with service-type businesses and that is the fact that they don’t have that much leverage when it comes to finding ways to earn more from it. How are you supposed to deliver quality services once you start expanding beyond your local market? The answer may lie in productized services and here’s how to do it.

What is a Productized Service?

As the name implies, a productize service is a type of service that takes on many qualities of a product. To understand how that works, imagine you are going through a grocery store shelf with products from top to bottom. You pick up a box of cereals and there you will find information like:

• The product name
• The ingredients used
• Nutritional values and preferred serving sizes
• A bit of information on the product and the company
• Contact numbers; and
• The price

A productized service would have generally the same features. It has a name, what the service is composed of (its ingredients), a step-by-step look at the process (the recipe and nutritional value), a scope (the serving size), testimonials and company information, and a fixed price.

Why Productize Your Services?

This way of categorizing your services solves the one problem that service-type businesses often have to deal with: the open-endedness of whatever service they have to offer. Sure, not every customer experience is and should be the same but to allow this to make your services too “customized” is one way of locking your business’s scope to a few certain markets.

Also, going back to that leverage issue, there are actually only two areas that you can find leverage for when it comes to services. The first is time. Services take time to be delivered which means you have to work more hours just to deliver more services. But, as we know, time is not infinite and there’s a limit to how many hours we can work on a daily basis before we have to rest.

The next aspect is the rates for your services. Generally, you can qualify your services by offering different service packages in order to increase your rates and expand your scope but, as always, there is a limit to that. In time, you would even have to compete with other businesses that offer the same services as you do but on a cheaper rate.
With productized services, however, you can get more from your services through:

• 1. Automation and Outsourcing

  

  Since your service now follow a standardized, uniform, and well set up system, you won’t have to spend a lot of time training your staff over and over again to complete certain processes and you can even have the entire service outsourced to third parties. With everything automated and outsource-able, you should have more time to focus on other aspects of your business.
   

• 2. Optimization

  

  The direct result of streamlining your services is that you now have a standard to follow and to refer to. And with standards, of course, comes the potential for you to improve on the quality of your services. Where can you make things faster and better? What part of the service can be removed, merged, or re-arranged to optimize everything? A productized service will help you answer such questions.
   

• 3. Value

  

  There is a certain level of predestination when it comes to products. Simply put, you know what you are paying for. As such, productized services shifts the question of your clients from “how long will it take for the services to be delivered?” to “how will this service help me solve a problem?” The latter has a stronger focus on value and, with value, comes the opportunity to charge for higher rates from your services.
   

How to Productize My Services?

So how do you go about productizing your services? That will actually follow several steps but, before anything else, you should answer one important question first:

Is my Service Productizable?

If your service is something that is commonly found in any market such as car repairs then, yes, it is productizable. But you might be worried that it is not productizable as your services are too unique.

Don’t worry. Any service that follows a logical sequence i.e. it has a starting and ending phase can be productizable. The goal, after all, of productization is to streamline your services so that they are easy to measure and identify.

With that out of the way, let’s go through the productization process.

• 1. Determining an Issue

  

  In this day and age, it is important to remember that you are not just productizing a service but also a solution. And, by nature, every solution was designed to answer a certain problem.

  Think of it this way: no matter how varied the reasons why your services are being sought for, there is that one recurring problem that people have that your services can respond to. To find out what this is, take the time to do your research as to the kinds of problems that your customers usually face. Then, group these issues according to how frequently they appear and arrange them from most occurring to least occurring.

  It’s basically like “niche-ing” your services without ignoring the rest of the market. Once you have determined the kinds of problems that your customers have, you will then have to find a solution for them with the services that you have.

• 2. Setting the Terms

  

  Now that we’ve identified the What in your services, the next problem to tackle is the How. What methods are your customers going to use to avail of your services? What requirements do they have to fulfill?

  This is the time for you to set up the terms for your service and this is where you will define the conditions of how your services is going to be rendered. For example? What do people need in order to avail of Uber’s service? First, you need to download the official app and, second, you need to set up an account.

  It’s important that you put in every detail of how the service is going to be delivered step-by-step. Going back to Uber, their service can be detailed in a few short steps which involves you using the app to hail a nearby Uber driver, the driver arriving on your site, the driver taking you to your intended destination, and you paying for their services.

  Regardless of how many steps it would take, it is important that you make the process as simple to understand as possible. You are trying to convince people that your services are not only effective but accessible, after all.

• 3. Pricing

  

  Next would be finding out how much you should charge for your services. The tricky part about services is that, unlike products, there is no fixed price for every customer experience out there. One person might have to pay more than the other depending on how long they have to rely on your services and the number of services they are paying.

  With that in mind, it’s best to use the per-hour basis of pricing or any system that uses a measurable quantity. Aside from the per hour basis for pricing, you can also use weight as a rating like in laundromats or meters/miles like what taxicab companies use. A more common pricing rate is on the per month basis which is handy if you are running an online service.

  It’s really up to you how you should price your services. Only make sure that everything is standardized so that what a person pays for in one part of the country for your services is the same everywhere else.

• 4. Solving Retention

  

  Would you believe that converting your audience into paying customers was the easy part? The challenge is in keeping them such for as long possible and it can be difficult as customer behavior is something that you have absolutely no control with. It’s either that your customers are too fickle or have too discerning tastes. Just ask any new trend that faded into obscurity in a few months after being introduced.

  This is why you should keep your line open for any feedback from your customers. There are many ways that you can do such which includes allowing for reviews and testimonies on your page to allowing your customers to rate your service after every transaction. The feedback they will give can give you an insight as to why some customers would drop their subscription from their services. On the flip side, if you generate enough favorable reviews, you can use these as testimonials to bring in more people to your business.

  Other ways to retain customers include loyalty programs wherein you give certain perks for those that make the effort to avail of your services regularly. This includes access to exclusive content or the usual discounts for services or products.

  At this point, it’s all about setting up backups in the eventuality that your customer base starts dropping. These won’t give you the assurance that your customers will remain loyal to you forever but, at the very least, your customer retention solutions will provide them with fewer reasons to quit from relying on your services.

What if the Customers Want Something Different?

Imagine that you are a restaurant owner and somebody asks to have this dish prepared but have the meat replaced with tofu or something similar since they’re on a vegan diet. It’s an annoying occurrence, really, but you can’t avoid encountering these people in your services. Here you are standardizing your services and somebody comes in and asks to order something not in the menu.

There is nothing much that you can do for these people but to guide them. After all, you know your services and are in charge of delivering it to them. This means that you have to devote a part of your time in explaining to your customers how the process works, what options are available to them, and what they need to avail of it. If they have a request that will require you to bend a few rules regarding the system you have set up for your business, then you must make the conscious decision to keep them as your customers or refer them to someone else.

What if My Service is Too Unique to be Productized?

Is there any service out there that is too creative that it’s processes can’t be productized? The answer is no. Being too unique or too creative has nothing to do with productization.

What you will have to remember that productization focuses more on the delivery of your products as opposed to the creativity behind it. You can make your services as creative as you can, you can add a few quirks here and there to make them more appealing to the public, you can even introduce a new concept that will baffle the minds of your customers at the start.

But know this, optimization does not care for how original or derivative your service is going to be. So as long as it follows logic in the sense that it has steps to go through, so as long as it can be monetized, and so as long as it solves a very specific problem, then it could be productized.

With that in mind, there should be no stopping you from optimizing your services so that you can deliver to your clients an experience that remains unique for each and every person but with quality assured in each and every transaction.

Have you tried productizing your services before? What other areas did you consider to streamline your processes for the business? The comments section below is always open for discussions.

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