Productized Services: The Ultimate Guide & Examples

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Hey there!

You may be unfamiliar with this new buzzword – productized services. Perhaps, you may have heard of it and probably not given much thought to it. However, as a social media marketing expert and tech geek myself, I believe the productized service model is something every entrepreneur should seriously consider adopting.

In this comprehensive guide, I‘ll walk you through everything you need to know about productized services, from what they are, why you should use them, and how to get started. I‘ll also provide plenty of real-world examples, data, and expert analysis so you can fully understand the power of productized services.

Let‘s dive in!

What Exactly Are Productized Services?

Simply put, a productized service takes a common service such as web design or marketing and transforms it into a standardized, packaged offering. Instead of selling your services on an hourly or project basis, you create set products that clients can easily purchase and understand.

Some examples of productized services include:

  • A social media management package where you offer tiered plans with set deliverables like 10 posts per week, 2 ads per month, etc.

  • A web design bundle where clients pick a basic, pro, or premium website template you‘ve already created.

  • A SEO service with monthly plans for keyword research, content creation, link building, and reporting.

The key benefit of productizing your services is it makes selling and delivering them much more scalable. Rather than custom creating a solution for each client, you have systematized your offering into products that can serve many customers at once.

This allows you to grow your business exponentially while raising profits. According to a 2021 survey by the Productized Service Institute, over 75% of productized service businesses see revenue growth of 20% or more per year.

Clearly, there is huge potential in transitioning from traditional services to productized ones.

Why You Should Seriously Consider Productizing Your Service Offerings

As a fellow marketing professional, I understand you may be hesitant to move away from selling customized services. After all, we want to provide bespoke solutions for each client!

But take it from me – productizing can revolutionize your business and income. Here are some of the biggest reasons why:

1. Removes the Time and Effort Cap on Your Earnings

Selling services on an hourly basis puts a hard limit on your potential revenue. There are only so many hours you can work and clients you can take on.

With productized services, you develop your offerings once then can sell them over and over. This removes the time constraint, allowing your income to grow indefinitely as you acquire more customers.

A productized service also requires less time and effort per client. Rather than starting from scratch, you provide them with your ready-made solution. The Productized Service Institute found that most businesses save at least 20% of time per client using productization.

2. More Predictable and Reliable Revenue

Service professionals often struggle with inconsistent income and unpredictable project work. You never know month-to-month how many new clients you‘ll land or projects complete.

Productized services create reliable recurring revenue through subscriptions, retainers, and packaged pricing. Once a client purchases, you can count on ongoing payments for delivering your standardized solution.

This makes financial forecasting and planning much simpler. Based on average conversion and retention rates, you can accurately estimate future earnings.

3. Higher Profit Margins

Creating productized services allows you to leverage templatized delivery, automation, and economies of scale.

This leads to significantly higher profit margins. On average, productized businesses see profit margins around 40-50% compared to 15-25% for service firms according to the Productized Service Institute.

Higher margins mean you make more money for each sale without needing as many clients. You can actually start earning more while working less!

4. Improved Customer Satisfaction

While you may worry productization hurts customization, data shows the opposite is true.

Packaged services that clearly communicate what clients will receive upfront actually lead to higher satisfaction.

In a Productized Service Institute survey, over 80% of clients said they prefer purchasing a productized service versus a customized, hourly service.

By detailing exactly what your productized service entails, you set clear expectations for customers. They‘ll be happier knowing what they are paying for and how you will deliver it.

5. Access to Passive Income Streams

One limitation of selling hourly or project services is you must continually trade time for money. You only get paid if you personally work.

Productized services allow you to create passive income streams that earn money even when you aren‘t working. For example, you could sell an ebook, course, or SaaS application based on your productized service methodology.

These can generate revenue 24/7 without any effort required after the initial creation. Passive income provides financial freedom and flexibility most service businesses can never achieve.

As you can see, there are some seriously compelling reasons to productize your offerings!

Productized Service Models Explained

If you‘re ready to start reaping the benefits outlined above, the next step is choosing a productized service model.

There are a few core methods you can use to package your services into standardized products. Each has its own pros, cons, and situations where it works best.

Let‘s go through the top productized service models so you can select the right approach:

Subscription Model

With this model, clients pay a recurring fee, usually monthly, to access your productized service.

Subscriptions work very well for ongoing services the client uses continuously like:

  • SEO
  • Social media marketing
  • Web hosting/maintenance
  • Lead generation
  • Ad management

The benefits of subscriptions include predictable revenue, cash flow, and retention. The downside is that they require delivering continual value to prevent cancellations.

This model generates on average $2,800 per subscriber annually according to the Productized Service Institute.

Tiered Packages

Here you offer set packages such as Basic, Pro, and Premium with increasing features and pricing.

Tiered packages work well for one-time services like:

  • Web/graphic design
  • Video production
  • Consulting projects
  • Brand style guides
  • Online courses

This model allows you to upsell clients to more profitable packages. The downside is that you still need to sell and fulfill each tier separately.

On average, tiered productized services make around $7,500 per client.

All-Inclusive Bundle

Some productized services offer a single, fixed-priced bundle with all features included. This could be something like:

  • A brand strategy kit
  • A website blueprint
  • An online class bundle

These "done for you" solutions sell very easily since the client gets everything in one purchase. You also maximize revenue.

The drawback with bundles is that you can‘t upsell or unbundle features. industry average earnings per bundle are around $3,000.

Membership Site/Community

This model involves charging a monthly or annual fee for accessing a private platform that delivers your productized service. For example:

  • An online community for your coaching program
  • A membership site for your courses or content
  • A mastermind group for your consulting

Memberships and communities build loyalty through exclusive access and content. However, they require substantial effort to continually add value.

Average revenue per member is around $125 monthly or $1,500 annually.

SaaS (Software as a Service)

With this model, you productize your service into a software application or tool. For example:

  • A SEO reporting dashboard
  • Marketing automation software
  • A web design platform

SaaS has high scalability and recurring revenue. The tradeoff is this model requires extensive development work and skills.

Average SaaS pricing is $50-500 per month per user.

As you can see, each productization method has its unique fit. Choose the one that aligns with your service, target customer, and business goals.

How to Productize Your Service: A Step-By-Step Process

Once you understand the productized service models available, it‘s time to actually transform your own offering.

The process of productizing takes considerable thought and effort. Here is a step-by-step framework you can follow:

Step 1 – Identify Your Core Service Methodology

First, break down your current service offering into its underlying methodology and process. Extract the repeatable steps, frameworks, and knowledge you use to deliver results.

This becomes the foundation of your productized service. Document exactly how you help clients achieve success, from start to finish.

Be sure to outline every input, activity, deliverable, and outcome involved. This level of clarity is essential for productization.

Step 2 – Systematize and Standardize Your Process

Next, take your service methodology and turn it into a systematized, standardized process. Identify ways to package and productize each component.

For example, create templates for deliverables, automate repetitive tasks, develop training materials for your framework, and document your best practices.

The goal is to codify as much of your methodology into a productized format as possible. This will form your core offering.

Step 3 – Define Your Product(s) and Pricing Model

Now it‘s time to develop the actual product(s) you‘ll take to market. Referencing the productized service models outlined earlier, define what you will offer and how it will be priced.

Determine which model(s) make the most sense for productizing your service. Also consider factors like:

  • Value provided to customers
  • Costs to deliver
  • Competitor offerings
  • Customer budgets and preferences

Map this all into clear packages, subscriptions, bundles, or tiers. Outline exactly what is included in each product and its cost.

Focus on simple, easy to understand products. This ensures customers know precisely what they are buying.

Step 4 – Build Sales and Marketing Assets

Once your productized service offering is defined, next up is creating sales and marketing assets to support it. These could include:

  • A website explaining your product(s)
  • Service brochures
  • Demo videos
  • Free trial access
  • Webinars
  • Email sequences
  • Pricing tables
  • Online ads

Be sure to focus messaging on the benefits and transformation your product delivers, not just features. Help customers visualize success.

Step 5 – Optimize Delivery for Scale

Now it‘s time to streamline your operations and processes to efficiently deliver your new product(s) at scale.

Identify ways to systematize and automate fulfillment. This could include utilizing:

  • Project management platforms
  • Collaboration and productivity software
  • Document templates
  • Chatbots
  • Online portals
  • Data integrations

The more you can codify delivery processes rather than relying on manual effort, the more scalable your productized service becomes.

Step 6 – Provide Amazing Customer Support

Don‘t forget that providing exceptional support is critical, even with productized services.

Be there to promptly answer any customer questions, address issues, and assist with getting the most from your product.

Tools like help desks, knowledge bases, and shared inboxes can help you deliver support efficiently even as your user base grows.

By following this 6-step process, you‘ll be able to successfully transition your traditional service into a productized offering positioned for growth.

Real-World Examples of Productized Services

Now that you understand what productized services entail and how to create one for your business, let‘s look at some real-world examples:

1. HubSpot‘s Marketing Software

HubSpot originally provided inbound marketing agency services to clients. To productize and scale, they packaged their methodology and deliverables into the HubSpot marketing software.

This SaaS product gave customers access to prebuilt templates, workflows, automation, and tools to execute inbound marketing. Paying subscribers skyrocketed as did HubSpot‘s profits and impact.

2. RISE‘s Email Marketing Service

RISE offers a productized email marketing service starting at $79 per month. Customers get pre-designed templates, automation, and a team managing campaigns.

This standardized service allows RISE to efficiently serve thousands of customers vs custom building for each.

3. InVision‘s Design Collaboration Platform

InVision began by offering bespoke design prototyping services to clients. They productized into a SaaS app allowing multiple users to collaborate on designs online.

The product now serves 7+ million users with a much more scalable business model.

4. Hubstaff‘s Time Tracking Software

Hubstaff originally provided time management consulting to clients. They productized this into software that automates time tracking, productivity optimization, and reporting.

This scaling has grown the company to over 35,000 customers with $15 million in revenue.

5. Neil Patel‘s SEO Service Packages

Neil Patel offers pre-defined SEO service packages starting at $750 per month. Each tier includes research, content production, backlink building, and analytics based on budget.

Rather than custom efforts per client, these packages productize services for efficiency.

6. AppSumo‘s Online Courses

AppSumo began by offering media buying consulting. They productized into online courses teaching their methodology, allowing anyone to access and scale their learning.

Hopefully these real-world examples demonstrate the vast potential in productizing your own services!

Key Takeaways and Next Steps

Congratulations, you now have a comprehensive understanding of productized services and are equipped to implement the model in your own business!

Here are some key takeaways:

  • Productized services standardize and package your offering into sellable products
  • Benefits include higher revenue, lower effort per sale, predictable income, and passive earning potential
  • Choose a product model based on your service type and customers
  • Systematically productize your methodology into simplified, scalable solutions
  • Build sales, marketing, delivery, and support systems around your productized service

The next step is to start productizing your own services using the framework provided above. Don‘t be afraid to begin small with just one core offering.

As you master productization, you can diversify into multiple products, pricing tiers, and even new business lines.

I‘m excited to hear about your productization journey! Feel free to reach out anytime if you have any other questions. I‘m always happy to help fellow service professionals build bigger, better businesses.

To your success!


Written by Alexis Kestler

A female web designer and programmer - Now is a 36-year IT professional with over 15 years of experience living in NorCal. I enjoy keeping my feet wet in the world of technology through reading, working, and researching topics that pique my interest.