Productized Services: Why It Works & How to Build Them

Running a service business is like two jobs rolled into one.

If you are just starting, I assume a lot of work goes into delivering services to your clients, such as marketing, accounting, design, etc. Then, your other job is the all-time-consuming and often mundane admin work involved in finding and onboarding clients, outlining the scope of your deliverables, and making sure your invoices get paid.

Additionally, scaling a business model like that is near impossible because each new client you add requires additional resources, like your precious time.

What’s more, scaling a business model like that is near impossible because each new client you add requires additional resources, like your precious time.

Thankfully, there is a workable solution for service businesses that want to simplify and scale their operations — productized services! 

What is a productized service?

Before I share how to productize a service, let’s define the concept.

A productized service is turning a service into a product with a fixed price and specific features. 

Instead of offering custom services, businesses create standard packages with specific features, prices, and timelines. This makes it easier for both the business and the customer to understand and use the service. 

Now, let me clarify how productized services differ from typical service business models.

Traditional service business models require meeting with clients, delivering the services, and charging them based on hours worked or deliverables. In a lot of situations, this model works out pretty well. However, if you’re a freelancer or service business owner, you’ll know just how much the exceptions can throw you off course.

For example, let’s say you are a graphic designer. You typically charge around $500 for your designs. A client reaches out to you and explains they need a shiny new logo for their business. You discuss requirements and deliver the logo. But then they change their mind because sometimes clients don’t really know what they want until you’ve completed the work already.

Now, you’ve got to make radical changes to the design. In essence, you’ve got to do the work all over again. Now, you’re basically taking home $250 for each logo and possibly turning down work from other clients. Sadly, this is a very common scenario.

However, it gets worse. You submit another design, but it’s still not what they were looking for. In the most trying situations, this back and forth can drag on, eating into the time you need to deliver work for other clients. On the same token, a job that you originally priced at $500 has turned into something far bigger.

While the example above is about graphic design, all service businesses deal with the phenomena of scope creep in one way or another. Productizing your service is one way to eliminate this process. 

Let’s say that instead, you offer three different logo design tiers. Your tiers can look something like what we’ve laid out below.

• Bronze: Requirement meeting, a prototype, and three revisions.
• Silver: Requirement meeting, two prototypes, and three revisions.
• Gold: Requirement meeting, several prototypes, and unlimited revisions.

Each tier has different prices that accurately reflect the work you have to do to deliver for your client.

Here’s what Hunter Hammonds, CEO of TalentLanded, shares about building a productized agency:

Mat Baxter, the global CEO of Huge, declares that the era of discounted rates, free pitches, and undervaluing agencies has come to an end. Now, they are switching their creative growth agency to a productized business model: 

“The productization model is a radically different model. It's a more stable model, it's a more margin accretive model, it's more generally stable for client relationship model than we've had in the past. And so, we've fully embraced it and taken it on board.”

As you can see, a productized service business model helps you offer levels of services to suit different clients. It also protects your profit margins from scope creep because your clients know what they should expect when they sign up for your service.

Of course, while my examples above refer to graphic design, this model can work for various services.

I’ve shared 16 productized service examples in one of my previous blog posts. So, check it out if you wonder how various businesses turn their products into services. 

Benefits of productized services for business and clients

Let me briefly outline the benefits of productized services for your business and your clients.

One of the most significant advantages of this service model is the potential for recurring revenue. If you package your services as subscriptions or tiered packages, you can create a steady income stream, making your business more predictable and financially stable. This is especially beneficial for service businesses that often face fluctuating workloads and revenue streams.

When you have standardized services, you can onboard new clients with minimal effort, allowing you to focus on delivering value rather than administrative tasks. 

At the same time, your clients will benefit from transparency and streamlined working processes. They can easily select the service that best suits their needs without the hassle of lengthy negotiations.

If you want to take your service business to the next level, try the Copilot service business platform. 

You can use Copilot to make different services available for your clients, depending on their tiers. 

I recently came across this awesome feature in Copilot, which allows me to personalize client dashboards and ensure they receive exactly what they've paid for.

For instance, Copilot enables direct communication with your clients right on the platform, which is a fast and convenient way to stay connected. But if direct access is part of your premium package, you can easily adjust the feature visibility and control which clients have access to it.

Copilot lets you customize the availability of various features, such as contract signing, file sharing, and more!

Try Copilot with a 14-day free trial and start offering productized services today!

How to offer a productized service

So, now that you understand the benefits of framing your services into packages, it’s time to learn how you can create productized services and which software can help you speed up the process. 

1. Identify your core strengths

Think about your services and what you do best. Then, ask yourself what parts of your service you consistently excel at.

Additionally, do some market research to ensure there is some level of demand for your service. If you’re just starting out, it can be difficult to offer something with very broad appeal, so consider offering a niche service where possible.

2. Offer solutions to users’ problems

Products are built to solve problems or pain points for their users. So, think about your ideal client and the issues they have within your niche. The aim here is to align what you do with what your clients need from a service.

Again, research is key here. Reach out to current customers or prospects to find out what they want from a service and use that to inspire the next steps. 

3. Package your services 

Packaging your service is a key step. You need to draw upon the research you’ve done in previous steps and think about what your clients want.

Then, outline your primary service, including deliverables, expectations, and deadlines. Now, you can build out your first tier. 

For example, if you’re an SEO agency, your client’s most obvious pain point is directing relevant traffic to their website. You can help them accomplish this goal in a number of different ways. For example, here are a few productized services you could offer: 

• A website audit that covers on-page and technical SEO.
• Keyword research for their niche.
• The production of SEO-friendly content like landing pages or blog posts. 
• A service that rolls all of the above into one product that your client can pay for monthly.

Of course, it’s important to note that you don’t have to offer tiers. You can offer just one productized service, too. Choose whatever works best for your business.

4. Set a price 

Consider where you want to position your service in relation to your competitors. Most clients want value, first and foremost. You don’t need to undercut your rivals to gain market share. Instead, you can compete on service and the value that you provide.

Price your service in a way that lets your clients feel they’re getting a good deal while still allowing you to keep the lights on and take a tidy profit. 

For example, Copilot offers three pricing tiers, each with clearly outlined features and benefits. Most client requests fit within these tiers, but if a potential client has a unique request, the Copilot team develops a custom solution to meet their needs.

If you're just starting, you can use Copilot's pricing model as a guide and take advantage of its "Custom Visibility to Apps" feature to offer different services to clients based on their tier.

5. Productize services with Copilot 

I’ve briefly touched on how Copilot provides a simple and convenient way to productize your services.

Now, let me walk you through how you can personalize your clients’ experience with Copilot.

After signing up, you’ll find various features, known as "Client Apps," in the left sidebar. These apps are accessible in both your and your clients' dashboards. Depending on the app, you can communicate with clients, exchange files, sign contracts, share invoices, schedule meetings via Calendly, and much more! 

However, not all clients need access to every app.

You may want to let only certain clients communicate with you directly or schedule meetings.

Copilot’s "Custom Visibility for Apps" feature lets you control which clients can access specific apps in your client portal. This level of control is crucial for offering tiered services, where clients have access to different features based on their subscription level.

You can easily manage app visibility for any or all clients by adjusting the settings.

It's that simple!

If I disable the "Book a meeting" feature in my Copilot dashboard for all existing clients, it will be removed from their dashboards entirely, meaning no client will have access to it.

Additionally, you can exclude some clients and retain this feature only for those on more advanced pricing plans.

Copilot allows you to fully customize your clients' dashboards. Here’s a step-by-step guide on how to do it:

Define tiers: Create different service tiers based on criteria such as pricing, features, or support.

Create custom fields: Set up custom fields to categorize clients by their tier. For example, you might add a field called "Tier" with options like "Basic," "Premium," and "Enterprise."

Configure App Visibility: Set visibility rules for each app you want to control access to. You can choose from the following options:

• Visible to Everyone: Make the app visible to all clients.
• Visible to No Clients: Hide the app from all clients.   
• Custom Visibility: Set specific criteria for who can access the app. For example, you could restrict access to a particular app to clients with a "Premium" tier.

And that’s it!

Creating productized services with Copilot is easy. Start with Copilot’s 14-day free trial to see it in action.

 3 tips for running a productized service business model

In my experience, starting small is often the best approach. 

Learning about your product’s pros and cons from real-world experience is more beneficial than waiting for a perfect launch opportunity. 

Think of it like this: instead of striving for a perfect product from the start, aim for a minimum loveable product (MLP) that lets you start learning and improving as you go. This way, you get the ball rolling and can make iterative enhancements based on what you learn. 

Don’t be afraid to experiment with your pricing! Try different tiers or productized service subscription models to see how they impact your revenue, user engagement, and profit margins. 

Another crucial aspect is focusing on retention. It’s not just about attracting new users but also about keeping them engaged. 

If your product or service doesn’t help users solve their problems, you’ll likely see high churn rates. So, keep an eye on retention metrics and dig into why clients are leaving. You could also conduct exit interviews or surveys to gather this valuable feedback and use it to refine and improve your service.

Ready to turn your services into a product?

Productized services can help you streamline your operations, boost customer satisfaction, and generate consistent recurring revenue.

With Copilot’s comprehensive client portal, you can simplify every aspect of your business operations—from managing clients to signing contracts and generating invoices.

Ready to see Copilot in action? Start your free 14-day trial today!