Online service providers should consider the productized service business model.
It’s a relatively new concept, although it has already picked up the SAAP acronym from the few providers that have managed to launch and successfully provide a productized service. Based off the SaaS acronym for software as a service, SAAP stands for service as a product.
Productizing a service means selling a service just like you would a product, on a website and with specific deliverables.
It’s a delivery model many businesses arrive at after years of freelancing, and here are some of its perks:
- Fully managed. The client has a “done for you” perspective on the service. They don’t see it as something they have to babysit or manage. Everything they need is included.
- Fewer complaints & cancellations. Productizing helps you organize and build workflows. The service gets done better which means happier clients.
- More revenue. You’re not spending as much time on each client because your process keeps everything running smoothly. You can scale a productized service further than freelancing.
- Less support. You’re still selling a service, so support is a must. However, because the client knows what they’re getting and what to expect, there’s a lot less support. You no longer act as a consultant.
- It’s validated. If you can sell your service as a product, that’s all the validation you need. The fact you have paying customers means you’re onto something.
Her’es a real life case study of a partner’s story, covering why he productized:
In my early days, I sold my services on marketing forums like DigitalPoint. Then I progressed to using Upwork (formerly Odesk).
Freelance boards like this have been really important to my journey as an entrepreneur. When I needed it, I could always use these platforms to find work.
And I know what you’re thinking, that freelancers are $15/hour bottom feeders. But you’d be surprised. Many freelancers make over $100k/year and it’s really just about how you position yourself and how hard you work at it.
The problem was, the businesses that use these boards are on them to find employees, not other businesses. They don’t want you to sell them something. They want your labor.
Whether you’re paid hourly or per-project, you’re an extension of their business and most will expect you to mold and adapt to their needs. It also means you’re going to have to do a lot of consulting. Sometimes that means being on call and available for them everyday. For each client, you’ll need to constantly evaluate if the price you’re being paid justifies the time and effort you’re spending.
If you’re not careful, clients can steer things into a direction you didn’t mean to go, so you have to develop strict procedures and know when to call it quits. If someone isn’t a good fit, you’re better off telling them immediately, rather than trying to make it work. It’s just like any other relationship.
Start juggling multiple clients at a time and things get real messy, but it’s the only way to really scale your income as a freelancer.
This is why I have a hard time recommending anyone to go the freelance route in the early stages of being a web entrepreneur. While it can be a stable income, you might get stuck there. Suddenly your dreams of having the freedom to take a vacation anytime you want are gone and you’re in as much of a 9-5 as you were before.
Needless to say, I no longer spend any time sending out proposals on Upwork. Rather, I’m focused on productizing my services and selling them on a website, just as I would any other product.
How my services came to be
When you build a lot of websites, there are trends and repetitive tasks that you’re either going to have to do yourself or outsource to someone reliable.
Most of the time, which route you choose is based on:
- How much time it takes to teach someone to do the task (or if it can even be taught).
- Whether there are better things that you need to be working on.
Think of web entrepreneurship as a business and you’re the owner.
Now, a lot of business owners tend to overwork themselves and they try to do too much. If you find yourself wearing a lot of different hats, you’ll quickly realize why this is a problem.
When you’re the lead designer, developer, content strategist and marketer, it can get difficult to manage. You get bogged down with not enough time in the day to complete everything. You start feeling the information overload on an emotional level. You have simply too much to juggle at once and it affects your ability to make progress.
This is why web entrepreneurs outsource. We find individuals and freelancers that specialize in one particular task and we offload some of the work in their direction. They can be local or remote, what’s most important is the quality of their work. It can be expensive though and good talent is hard to find. You have to already be making enough money to justify hiring help.
When you’re building websites and businesses, some of the tasks you might outsource include:
- Graphic design (logos, banners, images for articles, etc.)
- Content creation (blog content, webpage copy, email copy, etc.)
- SEO (keyword research, content optimization, link building, guest posting, etc.)
- Outreach (blog comments, forum involvement, social media, Q&A sites, etc.)
- PPC (ad copy, bid management, etc.)
There’s a lot of time and energy that goes into building a profitable website. You can’t just start a site you’re not ready to commit to. You have to take the project all the way through the pipeline. Then back through it, again, and again.
Much of this is a never ending process. Consistency is really important.
Every niche is different and some methods work better than others. However, most of these tasks are pretty common and will need to be repeated at least once every time you build a new site. There may be a site that you’re not running PPC ads for, or not setting up social media profiles, so cases like that would be the exception.
By building lots of websites, I’ve not only created procedures and learned how and where to hire help for getting these tasks accomplished, but I’ve collected data and done a lot of research. I now know which strategies are most effective, what works, and what doesn’t.
When I acquire a new website or a go to build one from scratch, I revert back to what I know and I implement similar steps as before.
What has happened over the years is I’ve grown my network and I have a team of experts surrounding me. From content writers to graphic designers, I know who I can turn to, and I trust in their ability because I was there to bring them up.
They’ve helped me provide my services for years as a freelancer and they are an integral part of selling those same services but in a productized format.
As you can see, productizing a service is a powerful and it makes a lot of sense for service providers that want to stick to what their best at and provide a great experience for that product.