Productized services refers to selling custom services like design, SEO, or website edits at a fixed monthly price. It’s a very attractive business model because it solves many of the problems a typical agency faces while offering a much more scalable way to grow a company.
Productized Services Advantages
Offering a monthly subscription to a productized serviced keeps revenue consistent. There will be some churn, but most customers are signing up for long-term service.
Rather than selling custom services to individual clients, a much simpler value proposition can be offered that is easy for buyers to understand.
Focusing on standardized services allow companies to offer clear deliverables that can be easily and cheaply outsourced. It’s the difference between developing a custom website or offering unlimited minor WordPress edits.
With standardized offerings that can be outsourced, costs can be drastically reduced.
A business that doesn’t rely on highly specialized consultants can be grown much easier.
Productized Services Opportunities
Almost any service sold in an agency can be productized to be sold as a monthly subscription. Rather than charging a one-off fee, think of how you can turn your service into a monthly subscription.
SEO, design, website edits, social media management, illustration, content marketing, lead generation, etc. can all be sold as a monthly service.
In-person services like heating and cooling, landscaping, car ownership, tool libraries, furniture leases, and more, are also being turned into monthly subscriptions.
Examples of Companies
In yesterday’s newsletter, I wrote about how I like the productized service business model of Scribe, the book writing and marketing company. A productized service is basically a limited scope of services offered for a fixed price. This is in contrast to doing custom services in a typical service business where you have to quote and sell each project. The TropicalMBA has a more nuanced discussion with Maryl Johnston, founder of the online bookkeeping firm Bean Ninjas, around that business model. They are some drawbacks, such as the long time until profitability compared to just consulting. Also, a general productized service business can be a race to the bottom as new competitors enter and lower prices.