Scalability has been a key challenge for service-based organizations, especially those offering professional services. Right from determining how to price your service, build trust with customers, and ensure consistency in offering services to clients, you are left with no time to scale your existing service-based model. You are keen to grow your business by acquiring new clients without increasing operational costs or lowering operational efficiency. But how do you enable this growth?
The answer is by ‘Productizing Services’ through digital product development that enables you to overcome the challenge of scalability, leading to improved sales, streamlined processes, and faster payments.
Curious to know how productivity services can power your business towards sustained growth and complimenting profits? Here’s a primer on the various benefits of productizing services that ensure you have a longstanding smooth run.
What are Productized Services?
Productized services may be defined as standardized services sold just like products, with clearly defined pricing and parameters. As an organization, if you have turned your services into readymade solutions, you have productized them. These solutions are customized to meet target market needs. In the digital product development process, the delivery of various services is repeatable. You can therefore develop pre-configured methods to deliver these services, rather than starting from scratch every time. Besides, productization takes care of the who, what, and how of delivering a service. Turning your services into out-of-the-box products, your customers immediately know what they are exactly receiving, when, and at what price. Productization makes the service highly predictable and efficient in terms of execution and outcomes.
From the perspective of a service-based organization, a productized service runs systematically and constantly produces and grows with or without your direct involvement.
A productized service offers a specialized “customized” solution with an attractive value proposition, packaged at a set price with scope for upgrade(s) from a customer’s perspective.
Benefits of Productizing a Service
When you productize your professional services, you simplify the customer journey. Doing so makes it easy for your customers to transition through the different stages of their journey, ultimately resulting in better sales. Your customers no longer must go through the lengthy process of inquiring about the product or service they are interested in. Instead, they can visit your products or services page, figuring out instantly what they can buy at what price.
As B2B companies productize their service offerings, they build sales efficiency and competitive advantage. The transformation of services into digital products can benefit the customer interface and internal processes through increased repeatability and improved customer delivery. The saleability factor of the offering makes it more attractive for the buyer. They perceive it quickly and then make the purchase. Talking about sales, the productization of services mitigates the risk for the buyer as the offering becomes more transparent. Besides, by turning your services into products, you increase cost predictability. Demand estimation and forecasting become easier with increased measurability.
As digital product development agencies productize your services, your business becomes smoother than before. This results in relatively less client communication and no more business proposals that take a toll on your time. Remember, sales are just a process. You need to optimize sales and make it more efficient over time. You should automate most steps in your customer’s journey, drilling down the personal touchpoints to a 15-minute call and some email follow-ups. It is a good practice for companies offering professional services to carry out standardized operating processes and organize their services to reduce their workload.
Reduces Customer Acquisition Costs (CAC)
Besides, selling your productized services is a highly standardized and repetitive process. Doing so helps to radically reduce the overall cost, such as selling, general, and administrative expenses (SG&A), involved in the sales cycle, resulting in lower customer acquisition costs. After all, who doesn’t want to invest less in acquiring new customers while retaining existing ones?
Boosts Business Growth
Productization removes the most significant challenge that most software-as-a-service (SaaS) companies face – a high cancellation rate. After all, you never want your customers to shun the software, but the sad part is that it proves valuable to your customers only for a short time that lasts for 1-3 months. To increasingly engage your customers in the software and stay subscribed for a long time, you have no option but to productize your software through digital product development services. Compunnel Digital helps you grow faster and scale easier with custom SaaS products through digital product development.
As you productize your software, the productized service works for your customers, thus saving their time. Also, a productized service adopts a hands-on approach. Experts ensure your client gets the desired output from the productized software. The productized service also does not depend on the user interface (UI) to be effective. With low or no cancellations, revenue comes easier and faster, boosting your business growth. According to Gartner1, technology general managers must apply a closed-loop strategy for digital service productization to increase engagement wins and speed up time-to-market.
Productized offerings by digital product development agencies have better potential to scale by decreasing your dependency on resources. You can sell the exact solution to multiple customers while spending minimum time on customization. As you productize your services, you create something that carries value. While products are tangible units, service-based models are intangible and offer little room for growth. In the case of services, your sales limit the amount of work you do. But you are free to sell as many units as you want in the case of products. You may also scale up your team based on outsourcing surplus or sales orders.
Due to the scalability factor of productized services, you increase profitability without weighing down your resources. Rather than reinventing the wheel whenever you talk to a new prospect, you offer a vetted, repeatable solution that is easier and quicker to deliver each time.
Defines Project Scope
When you productize your service undergoing the digital product development process, you eliminate projects getting more complex with every client request. You are packaging and selling your service with a defined scope. There are no more customizations or scope issues. Your productized service offers your customers – a pre-defined price and scope of work and the option to choose what is suitable to their budget. Doing so implies that customers now have a cost-friendly option to traditional service agreements. Remember, there are plenty of service providers productizing their services every day, freeing customers to find a solution that meets their needs and fits their budget at the same time. Keeping these costs low allows your customers to invest more money in other business aspects, which is the primary reason they choose you over your competitors.
Are you Ready to Get Started?
With analytics and automation transforming the world of professional services, today’s professional service companies leverage embedded products’ power to release from the linear-growth trap. Besides, customers increasingly demand companies to offer their services as products. You develop a more intimate relationship with your customers on the product level, refining your value proposition faster than you would with services. On a higher level, building a productized service helps you learn to work on the business and not in the business. You focus on the processes and build a team creating value.