Productized Services: Software with a Service, Unlimited Services, Drop Services

Uncategorized 5 Minutes

“Each (hu)man is capable of doing one thing well. If he attempts several, he will fail to achieve distinction in any.“

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❓ What You’ll Learn

  • What is Software With a Service?
  • How do SaaS companies use productized services to attract customers?
  • How can productized services sell unlimited service packages?
  • How to maximize customer lifetime value?
  • What is drop servicing?
  • How to avoid scope creep?


💎 Why It Matters

You can stop trading hours for dollars.


🔍 Problem

Buying services is complex. Customers don’t want to negotiate cost and scope.


💡 Solution

Productized services offer a fixed price with a clear scope and timeline.

Agencies are like personal chefs who cook everything for everyone. 

Productized services are like restaurants with a menu.

 


🏁 Players

Design

Content

  • Podreacher • Repurpose marketing content for different mediums
  • AudienceOps • Done-for-you content and case studies.
  • Scribly • Content marketing with strategy and production.
  • Draft • White-label content writing service
  • 100 Pound Social • Social media and blog content.

Usability Testing


🔮 Predictions

  • Businesses will use productized services as a trojan horse to sell higher-end products later on.
    • PartnerHero starts at $10/hour for customer support. As your business grows they offer dedicated teams and operational support starting at $1,800/month.
    • Avenue builds reasonably priced websites for real estate agents. They triple the price to then advertise the website.
    • HubSnacks offers simple HubSpot services for $690/month but charges 4x the price for support with growth.
  • SaaS companies will court productized services to build on their platforms. The platform attracts new customers by supporting businesses that use it.


☁️ Opportunities

  • Sell ‘unlimited’ service packages. You can limit concurrent requests and set turnaround times to maintain profitability. 
  • Use pricing tiers to maximize the value of high-end customers while welcoming entry-level players.
  • Sell services to clients on one platform then hire freelancers on cheaper platforms. This is referred to as drop servicing.


🏔️ Risks

  • Scope Creep • Set guidelines and limits to avoid clients who expect too much. You may find this more difficult to adhere to in the early stages.
  • Race to the Bottom • Stiff competition will cut into your margins. Avoid this by choosing a defensible niche.


🔑 Key Lessons

  • Productized services tend to scale faster and easier than traditional agency businesses. 
  • Think about distribution first. Pre-validate by preselling services. Or building an existing customer base as a freelancer.
  • Automate tasks when possible. Find ways to cut costs by automating processes without sacrificing quality.


🔥 Hot Takes

  • Scope creep can be useful. Track scope creep to understand what other services customers can benefit from (and pay for).
  • Successful productized services will abandon platforms. The most successful businesses on platforms like Fiverr and Upwork will try to move repeat customers off-platform.


😠 Haters

“Productized services are more like fast food than upscale restaurants. There’s no room for creativity.”
This is a misconception. Productized services can build processes without sacrificing the quality customers have come to expect. 

“My clients only trust me. They would not feel comfortable letting anyone else do this work for them.”
Your clients want a certain outcome and think that you are the best person to help achieve it. If they trust you to solve the problem, they should trust you to build a process that solves it. Offload responsibilities gradually to show that your process is just as capable as you are.

“The standard package from a productized service is too generic to suit my situation.”
If the promised outcome isn’t what you’re looking for then you’re probably right. Unique outcomes are possible with productized services but they are not for everyone.


🔗 Links

  1. Who’s building a productized service? • The tweet behind this report. 
  2. Productize and Scale • Productized services guides, resources and community created by Brian Casel.
  3. Productization of Services: A How-To • Pricing strategies for productized services.


📁 Related Reports


🙏 Thanks

Thanks to Maciej Cupial, Brenton, Fausto, Tem, Tarek Zalt, Uwe Dreissigacker, and Rick Jarrell. We had a great time jamming on this report.

✏️ Harry researched and wrote this report. Dru researched and edited this report.


📈 What else?

Trends PRO #0103 — Productized Services has more insights.

What you’ll get:

  • 46 Productized Service Examples (142% More)
  • 10 Predictions (233% More)
  • 13 Opportunities (175% More)
  • 4 Risks (100% More)
  • 7 Key Lessons (133% More)
  • 4 Hot Takes (100% More)
  • 12 Links (300% More)

With Trends Pro you’ll learn:

  • (📈 Pro) How can influencers benefit from productized services?
  • (📈 Pro) How can consultants build productized services?
  • (📈 Pro) How will productized services move upmarket?
  • (📈 Pro) How are productized services building communities?
  • (📈 Pro) How will AI change productized services?
  • (📈 Pro) How to find your niche in productized services?
  • (📈 Pro) How to sell service subscriptions?
  • (📈 Pro) How do build and use social proof?
  • (📈 Pro) How to crowdsource solutions to customer problems?
  • And much more…

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