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Productized Services

A podcast episode got me thinking about Productized Services — basically, taking a consulting service, standardizing the way you provide it, and selling it as a product.

Services are more flexible, but less scalable. If you’re a web designer who builds WordPress sites for clients, there are only so many projects you can take in a year, but those projects can be as custom as your clients need. You can charge more, because it’s your time and your expertise that are being sold, and those aren’t fungible.

Products are more scalable but less flexible. Instead of building custom WordPress sites, maybe you offer website setup and maintenance, with a starting fee to establish a website and perform minor tweaks on a WordPress theme, and a monthly maintenance cost. You charge less because there isn’t as much room for customization — you’re charging for the website itself, not your time and expertise creating it. However, you can sell more, because your process is systemized and can be performed more quickly, and you can train others to follow your procedures and help you.

As a service, the onus for setting the scope falls on the demand side. (“What do my clients/customers need?”)

As a product, the onus for setting the scope falls on the supply side. (“What do I offer my clients/customers?”)

It isn’t usually this cut-and-dried, and I sure hope you aren’t building WordPress sites for clients in 2019 unless your services are reallllly niche or special (we have SquareSpace now). But I think this is a good example for how productized services differ from regular services.