#106 The 4 Stages To Productize A Service

I used to work at a custom software agency leading projects as the product strategist. I often came in during the sales process to meet the clients, finalize scope, and put together the final project pitch.

I thought it was normal to create a totally custom scope for every single client that came through our doors... and to be fair, it was custom software development so a lot of it was unique.

But there were processes we repeated in each project that we would copy/paste estimates over for.

When I left that job to go to bossbabe I swore I'd never start an agency because of the unpredictable nature of project timelines, over-run scope, staffing the team, and bad margins.

Then I read the book ​Built To Sell​ and everything changed. It's a short fictional story (I listened to it in half a day) about a creative design agency that started doing everything, and ended up only creating logos.

I realized I was wrong.

If you treat your services like products, you can have predictable timelines, clear scope, consistent work, and healthy margins.

So I decided to launch Affinity with two clear productized services: (1) membership/program audits & (2) product strategy sprints.

For the last couple of months I've been adding a third service, and I'm officially at the "productize stage" so I'm sharing my process.

Let’s get into it –

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At Affinity we started ​building community experiences on Circle​ as a service (this is an affiliate link because our agency is now an official Circle partner – yay!). Here's why:

Two things were happening in the business –

1. Our management clients are all based on Circle platform so we've really learned the platform inside and out, and we know how nuanced setting it up for optimal performance is.

2. We were sometimes recommending Circle to clients from their product strategies or audits, and then didn't have a partner or contractor we LOVED referring to for build outs.

Before you add a new service it's really important to recognize that there is demand for it, and that it's a service that aligns really well in your customer journey (!!!!)

When we looked at our customer journey at Affinity it was...

Strategy & Design >> Build It Yourself? >> Audit >> Manage

Not great to have that giant (very important) gap in the middle.

Once I made the decision that we were going to test this as a service, I came up with a scope of work, and opened up a beta via my newsletter.

Now I'm in the midst of productizing so let's break down each phase.

There are 4 stages to productize a service:

1. Scope – What's included & how much does it cost

2. Beta – Test it with real clients

3. Productize – Build a repeatable process

4. Launch & Improve – Full launch & continuous improvement

Stage 1: Defining Your Scope & Price

Create your not-so-sexy scope of work calculation:

1. Bust out a google sheet and write a line for every single step of your process and scope that you want to include in your offer.

2. Estimate how many hours each step will take you (or your team), add the hourly rate, and then add a 20% buffer

This is your fixed fee price. Productized services should always be fixed fee – it's the same every time and therefore we're trading a clear scope of services for one price tag.

Now figure out how much you can discount it and still be profitable. That's your beta price.

Make a pretty google doc (or you can go full psycho and make a beautiful pitch deck in Canva like I do) with a high level breakdown of everything that is included.

Show your full pricing & discounted beta pricing.

Limit your beta price to a certain number of customers and/or close by a certain date.

For our new Circle build offer we ran beta pricing at about 50% our now full price. I closed beta pricing in March so we ended up getting 4 customers to test with.

Stage 2: Test With Real Clients

When you sign a beta client it's important to make a few requests.

1. They will provide you feedback along the way

2. They will give you grace as you work out the kinks and figure things out with them (like timeline slips)

3. They will give you a testimonial assuming they're happy

4. They will allow you to use their project as a case study in marketing materials

I love having an open channel of communication with clients during this process. I use a Slack channel for this so you can go back and forth with clients easily to work out kinks.

We use Slack channels with our clients for all of our productized services at Affinity.

One of our clients gave us feedback that they wished they had a list of everything that would be needed from them throughout the 4-week process. Last minute requests caused them some stress – so this is something we've added moving forward!

Another client had WAY more content to migrate than others and that helped us determine how we needed to have two tiers of pricing for large migration projects vs a more basic setup.

This kind of feedback is so valuable.

During your test phase you can also analyze what similarities your clients have that you weren't necessarily expecting. This can be really helpful to inform your marketing.

For example, all of our clients were migrating full offer-suites over to Circle. That helped us realize that can be a specialty for us! We're building clear product ascension right within their Circle interface so that their customers can upgrade easily.

Stage 3: Build A Repeatable Process

After you go through your new service process with a few clients, it's time to create all the resources you can use over and over again.

This can look like...

• Project Roadmap / Timeline

• Project Template

• Deliverable Template

• Client Onboarding Process

• Client Offboarding Process

• Internal SOPs

Yesterday I created a project roadmap for our Circle builds that articulates each step over the 4 week process and what the client deadlines are to keep to the timeline. That's going to be super helpful.

Here's week 1 of that roadmap:

I tested a few different onboarding processes with our clients and found the one that works best, and so now we have an onboarding flow that works really well and is repeatable for future clients.

For each step that I had to do the work, I recorded myself (using loom) doing it so that my team can repeat it easily. This is helping me build out SOPs.

My point is – use your beta customer projects to help you build a badass arsenal of templates and SOPs to productize your service.

Stage 4: Launch & Improve

Once you've put all the process flows, templates, and SOPs in place it's time to focus on your marketing processes.

Personally, that looks like:

• Sending out a loom video to all our referral partners about our new service and pricing.

• Updating our website to feature our new offers.

• Building a sales flow / funnel – I love a pitch deck & loom for a productized service. It works so well.

Once you productize that's not the end of the journey, I'd recommend running a retrospective for the next (5) clients so that you can learn and improve all the processes you've created.

At some point, running a productized service is like a well oiled machine and you continue to increase margin and client satisfaction.

And isn't that the best?

What services are you going to productize in your business (or have already)? I'd love to hear about it!

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