Are You Ready to Turn Your Services into Products?
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
Is ‘Software-As-A-Service’ a software or a service? Truth is, it doesn’t really matter. Across industries, the evolution from ‘sale value’ to ‘Customer Lifetime Value’ has brought with it a focus on ‘Value Creation’. Product-driven companies battle commoditization by providing value-added services, while service-driven companies shorten time-to-value by packaging their services into repeatable offerings.
If you’re a service provider intent on remaining relevant in the face of a growing global competitive landscape, you need to start offering service packages with clear, tangible deliverables. Even if you’re successfully dealing with competition and leading your space, you still need to consider productization. As a service provider, time is quite literally money. Your scale and profits depend on your ability to keep taking on more clients. Packaging your services as products can allow you to serve more clients at the same time, and help you scale your business. You can also consider creating products to provide part or whole of the value you create for a client and bundling it into your service offering.
How would you know if you have what it takes to start productizing your services? Ask yourself these 3 questions.
1. Can you repeat results?
The primary criteria for evaluating a service provider is always whether they can demonstrate outcomes. The ability to promise and consistently deliver tangible results not only makes you attractive to customers but also signals that you’re ready for productization.
Repeatable, predictable results arise from standardized operating procedures, effective collaboration, and efficient communication. Once you have achieved this, it is only a short step towards packaging.
For us, the process of identifying capabilities that could be productized was similar. We started by identifying problems that we had been solving with a high degree of efficiency and predictability of outcomes. Sifting through data from more than 120 major projects delivered to customers in 20 countries was no mean effort, but we felt the impact on our growth trajectory.
2. Do you see patterns in your customers’ needs?
Do you find yourself giving the same advice or proposing the same solution over and over? Do you find that various customer issues arise from a core problem that you are capable of solving? Or, have you identified a pattern or progression in how your customers’ needs arise? Either way, if you see a pattern where others don’t, and you’re capable of capitalizing on it, your situation is ripe for productization.
The ability to productize is all about creating standardized, repeatable processes, modularised offerings, and quantifiable results. But, at its heart, it is an innovation in your service delivery capability. As with all innovation, it arises from an intimate understanding of the need. Developing a deep understanding of your customers is, therefore, a precursor to innovation through productization.
In our case, our intimate understanding of the needs felt by manufacturing and construction companies allowed us to focus our innovative efforts and build multiple productized solutions. For example, we knew that manufacturers with large catalogues of products struggled to grow their B2B revenues. We created service packages to help them provide customers with a better buying experience through 3D product viewers on their websites, and help sales teams sell more effectively with beautiful, interactive 3D PDF brochures.
3. How large is your addressable market?
Productisation essentially adds efficiency and capability to your company. One of the questions you need to ask is whether you really need it. That might seem like a strange question to ask. Shouldn’t you always strive to be more efficient?
Yes and no. If you are able to hit a large percentage of your market with your current scale, you might only need to add some incremental efficiency. You could achieve this by growing your team or streamlining a few processes to add some scale. However, if you have only addressed a small percentage of the total market and you’re already at maximum capacity, then you need the exponential growth inefficiency that only productization can bring.
When we saw the type of growth that Architecture, Engineering, Construction, and Manufacturing industries were experiencing worldwide, we knew we needed to innovate rapidly and build the capability to deliver exponential customer value. Aside from productizing our services, we built partnerships in AI and professional services that could bolster our value proposition and help us cater to new markets. Not only were we able to grow our customer base, but we were also able to substantially improve the quality of our outcomes and the overall customer experience.
Whether you call your offering a product or a service, the need of the hour is to be able to deliver value that is sustainable, scalable, and measurable. Keep an eye out for situations that allow you to build such a proposition, and keep building your capability to hit when you find that the iron is hot.