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Dec 27, 2019

What Is A Productized Service?

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A way to scale your freelance or consulting business

Since I have been a freelancer since 2005, my productized business wasn’t born out of anywhere. With more than ten years of experience, I was confident I knew my industry well enough to pull it off.

If you’ve been a freelancer, service-based practitioner, or consultant for some time and find yourself burned out and spread too thin by working dollar-to-dollar, this is for you.

In a service-based business, there is only so much time we have to deal with client’s customized requirements. Hence, most of us have to limit the number of clients we work with and reject tons of great projects along the way.

Outsourcing wasn’t something I explored as I used to prefer keeping my graphic design freelance business small to avoid having to manage people. It was fun working on client work on my own and I couldn’t imagine passing off what I had been doing to someone else who can do things as quickly and as well as I did.

After my first kid was born, things changed. There was no way I could care for my baby while helping my clients at the same time. I had to be “there” to speak with each client to customize their design work and help them too.

I was tired of trying to be at all places at one time.

Then I came across people packaging their services and hiring the right people to deliver these services. The term used was “productized services”, “service products” or “done-for-you” services: a way to provide a predefined list of services that are offered like products to your clients rather than customized solutions.

That got me excited to do the same for my business and finally hired my first designer, and another and another.

The start to scaling your service-based business

Some people call it a service product business while some use the term “done-for-you”. In a conventional and customised service business, you offer solutions based on your customer’s needs. Each time, you may not know what they need and most of your processes are different for every customer.

In a productized or service product business, instead of coming up with services to suit your customers, you predefine what you have to offer, your pricing and time taken to deliver it. It’s a great way to scale your service business because more of your service could be sold with less work time.

For example, in a productized graphic design business, one may provide only infographics design services, not logo, web and character designs. You may be an expert in many areas of design but limit your scope when providing your services to your clients.

In my case, I used to do everything from brand strategy, illustrations to designing magazine pages. When it comes to technical execution, it’s easy to do it all because once I have learned the skills of using design software, the rest is just up to me to be creative. As a designer, I can create many things for clients.

Problem was a lot of processes I used to create an illustration for Client A can’t be exactly replicated and used to create a magazine layout for Client B. Now instead of offering one-off services, I offer a set of simple graphic design service. It does not include brand strategy, animation and complex illustrations.

To make things clearer, here are the steps I took as a freelancer versus packaging my services:

My steps as a freelancer from start to delivery

Step 1 — Call with client

Client explains what they need, example, a website designed based on their brand guide. She claims she only needs a simple one without anything else, just an information site.

Step 2 — Quote and proposal

I take at most three days to develop the timelines, proposed ideas and a rough quote based on her call. I’m not paid for these and the few days work are done out of my own use of time.

Step 3 — Present

Once I’m satisfied with my proposal, I send an email to the client for her to consider. At times, this takes another few days for the client to respond. There are many times when they get busy and don’t respond. That’s when I will follow up until they tell me they’ve got someone else to help them or they are not going ahead with it.

Step 4 — Negotiation

Here’s when a client is keen to work with me, but the price is not so right. She gets back to me to ask for a better price or more services at the same price. This step may go on for days, sometimes months or even a year. If I was cash-strapped, I usually relent and work with clients at the price they want. That also means, lower than expected income, affecting my desired revenue to pay bills and fund my lifestyle.

Step 5 — Start work

If the client is keen to go ahead, she puts down a deposit based on my proposal, usually 50% of the quote. I start work and update the client every other day with the progress.

Step 6 — Where things get complicated

Even with the proposal agreed upon, the client starts asking for additional services or scope out of what was discussed at the beginning.

Here’s when I get into a tug-of-war. I want to work with her, earn more income so I agreed to find a way to provide what she asks for. At the same time, I don’t wish to do that because it will mean taking more time than expected, which also means I will not know when I will be paid the other 50% of the quote.

In theory, it’s wiser to let her know we will complete the website as agreed, have her pay in full before we proceed. But she may not agree with this.

As a service provider, I get into another dilemma: “should I risk losing her as a long term client by persuading her to complete her website first?”.

The above steps are repeated with as many clients I can work with. The only way to sustain my lifestyle and maintain the quality of my work is to increase my fees. This also leads to “chasing” some clients away.

Here’s my productized service process

Step 1 — Pre-defined services and fixed pricing

No more wait and see, ala-carte approach or living from project to project, not knowing what expertise is required and what I will be getting. Instead, I’m offering my clients a “lunch set menu” where they will be getting, for example, a bowl of soup, a plate of cheese macaroni and a creme brulee.

They know what they will be getting and the exact price for it, nothing more, nothing less. As a service provider, I know exactly the ingredients required to cook and serve lunch.

Step 2 — Hire the right experts

Now that I know what I want to include in the set menu, I know what kind of expertise to look for in a chef to cook lunch. It’s good enough if this chef can cook what’s on the menu because these are the only thing we offer now.

Understand that there’s so much time in a day and so many customers one chef can handle. Say you set your work hours to nine hours a day. If one chef needs one hour to cook one set lunch, that means one chef can cook for at least eight people a day.

In that case, if you have eight customers, you hire one chef. If you have sixteen customers, you hire two chefs and so on. It can scale!

Step 3 — Sell and repeat

With a packaged and standard set of food to prepare every day, I’m able to tag my offer with a standard price. Customers will know what they are getting and what they have to pay.

I’m able to solve a recurring problem for customers and in exchange, they pay me on a recurring or subscription basis. In this way, I can sell as many times as I want without burning myself out and help increase income at the same time.

I’m sure you can tell that a productized service is simpler than one-off work. Best of all, it can work for anyone. You don’t have to own a company to do this. Let’s say you are a solo freelancer and don’t wish to hire and manage people. You can package some of the expertise you use daily into a do-it-yourself kit to sell to clients.

In my case, I want to help as many people as possible, hence I’m growing a team of designers who churn out regular design work for our customers. If you wish to be an entrepreneur and build a company, it’s easier to hire people to work on productized offerings than customised ones.

Once you take off with one productized service, you can use the same model to apply to other types of services.

The sky is the limit!