There comes a time in the life of many-a-freelancer, where you look for smarter ways to up your game.
You grow tired of customers who don’t pay up, boom or bust cycles or just plain uncertainty when you’re faced with one of those forms at the bank where they ask for your annual income. You start thinking, surely there are more efficient ways to make a crust than trading time for money?
What if you could carve out a niche for yourself that brought you regular, predictable monthly income? What if you could narrow down your services to a type of package, something that clearly defines what you’ll do for clients?
If you’re asking these questions, then it may be worth your while looking into productized services.
What is a Productized Service?
A productized service means taking a skill (or set of skills) you are already proficient with and packaging them into a “done for you” service. The idea is that you can charge a monthly fee for a set package of tasks that you have clearly defined for your customers.
An analogy could be the different levels of car service packages many mechanic’s workshops offer. You know you’re getting a set range of services for the price you’re paying – any more and it’ll cost you extra.
Productized services have gained attention in the last few years as businesses look for ways to scale beyond the one-man-band. Here are some examples:
WP Curve – They charge a monthly fee to take care of their customer’s small WordPress issues.
Design Pickle – Offer unlimited monthly graphic design (within the tasks they have outlined).
Podcast Motor – Offers set monthly packages for podcast editing and production.
In each case, the founders had skills that they were able to put a system around and scale up their service. This is a key point as we go into the next section – productized services need to have a system around them; this is what makes them scalable as it means founders can easily build and teach teams to grow their service.
What Makes a Productized Service Work?
Vic Dorfman argues in a post for WP Curve that if you have a service, it can indubitably be productized, even if there are parts of your service that are actually bad candidates for scaling.
His thesis is that it is better to have an imperfect productized service that acts as a catalyst for you finding a better way, rather than to have none at all and continue with a pure freelancing model of business.
Trading time for money really is the issue; you only have one of you and so many hours in the day. You also tend to receive extra requests as a freelancer, making you less efficient, particularly if you’re not doing them all the time. A productized service has a set scope and price, like that “diamond” service you might buy for your car.
So, what would make a service “perfect” for productization?
- You can easily put written systems and processes around it.
- Those processes make it easy to scale up by hiring and teaching others.
- Your services can be clearly defined. You want to be able to say as precisely as possible, “we do this, but we don’t do that.” This stops those “extras” creeping in like with freelance gigs.
- As Casjam’s Brian Casal says: “the key is focus on serving one ideal client with one solution to one problem.” Therefore, a service is perfect if you can gear it to a certain ideal client.
Which service could you package?
Benefits of Productized Services
To the financially-stretched or simply very tired freelancer, there are a number of benefits to creating a productized service. A productized service allows you to bring in predictable monthly revenue and to manage your time more efficiently. You can stick to tasks you know and do well, and scale your service so that you’re able to hire others to do the client work.
As Brian Casel points out, one of the big considerations many freelancers and independent contractors face is whether or not to build a software product or SaaS as a way to propel themselves out of the daily grind. What you don’t hear about so often is the number of those businesses that go belly-up within the first couple of years, with founders that have sunk large chunks of change into them.
A productized service is different because it doesn’t take a lot of money to develop. You can launch it with a simple website and if you get paying customers, your idea is validated. (You can also just as easily pivot if you find the idea is just not working). Another point here is that you’re not eating into savings or maxing out your credit cards to develop it. The risk is much lower for your own financial situation than that of building a software product.
Here are some other benefits to consider:
- No “gray area.” Your customers and you or your team know exactly what to expect.
- Low cancellation rate as compared to SaaS. Customers enjoy the convenience of the “done for you” model.
- Low barrier to entry – create a website and advertise.
- It’s a great way to learn to scale a business in a lower-risk environment.
- You can probably find the first clients for your productized service among clients you already have or have served in the past.
- You can transition quickly to working full time on your productized service, rather than the long periods of time that many SaaS founders spend juggling more than one job as they develop their software.
Cons of Productized Services
There’s always a flipside, so let’s look at some of the potential cons you might encounter with a productized service:
- Your systems and processes must be meticulous, especially when you’re at the point of hiring a team. You’re not there to make the on-the-spot decision, so you need to consider any kind of scenario your team may encounter.
- You may have clients who don’t like the idea, especially if they’ve been used to making those “extras” requests. (Hey, this could be a positive for you if you’ve been trying to find a way to put a stop to those anyway).
- It takes time and effort to craft the right packages and messaging so that you convey value to your clients.
- You’ll probably spend a lot of time talking to clients personally, at least initially. People are likely to want to ask questions and make sure that they can see the value in what you are offering.
- You’ll need to hire a team to help you as you grow. While this can be seen as a positive, for many transitioning from the “business of one” model, being responsible for hiring and managing others is a steep learning curve. You need to be able to find and identify those who will work well under the conditions and processes you require.
- You still need to put considerable work into marketing your business, just as you would for your freelance services.
Being the boss can be a huge learning curve. Photo via Visualhunt.com
Is This For You?
Only you can decide whether you have a service that’s really suitable for productizing, but the chances are you will find something in there if you look at the various individual tasks you perform, particularly those that are regularly requested.
Productized services give you the opportunity to set up a scaleable business that reaps returns fairly quickly, especially as compared to other types of businesses that require more development work. You’ll still need to put time into creating your systems, processes and packages, but for many people, productized services are providing quick wins.