Anyone here have successfully turned a service into a product? What did you learn while doing so?
Context:
We’ve been supplying Event Agencies with a service that they needed to complement their events. This requires us to customize the look and process they want and be on the actual event day to support the activation.
I wanted to scale up our business by productizing it so that eventually we won’t need to be there physically or there won’t be any developer time involved on the project.
The way I thought about this is that we will develop a new product that is self service and user friendly (for non technical people). We can offer this product in 3 ways, one is that we will use it to still provide service to our existing customers. Second is that we allow them to use the product directly with lower cost. Third is that we onboard other service providers to use our product to sell to their customers.
I’m having doubts tho whether we can convert our existing customers to self service (They basically pay us to do the stuff for them) or do we need to find new types of customer that are more tech savvy.
Try running as a tech-enabled service where you use the product yourself to provide a better version of what you currently do. It helps to build experience into the product and it’ll probably be more palatable for your current customers. For new customers you have the option to start with a product-first relationship.
That said don’t assume you can’t convert current customers to true product customers. Use them to understand what’s most important about what you offer so they can help you replicate in a product.
We’ve already been a Tech Enabled service from the very start. We’ve already built a platform for Events but we’re the one using it for the clients while also providing customized frontend and flow. But this requires developer time for every project we handle and the margins are small due to us being on optional part time of the event/program.
We would like to flip this out the other way and let them use it. But there’s a lot we need to build for that.
Yes. Wasn’t expecting to see such a niche question but this is exactly the position we’re in.
For 8+ years I operated an agency where we tried to do everything. We were spread thin in like 9 different directions. (E-mail marketing, conversion rate optimization, media buying etc.)
After selling due to low profit margins & too much stress, I decided to focus on 20% of the services that generated 80% of our happy clients & outcomes.
So I relaunched with just those services.
But we also “productivized” it so pricing isn’t really fluid anymore and we outline the quantity of everything a client gets. So there are clear expectations & deliverables.
As far as how it went… honestly way better than expected. More demand than I anticipated. May start a waitlist soon. We also just started hiring like crazy lately due to all of this.
A bonus tip if you can figure out a way to apply it to your industry… we find it’s much better to sell a productivized “front-end” product that’s simple, without overwhelming our clients. Then you can offer more complex things on the backend.
So for us, the frontend offer is done-for-you ad creatives. We basically plan, write, film, edit, & design high converting ads for paid social. Once we prove ourselves and clients are like, “Woah, your ads are $0.78 CPLC while our best existing stuff was $3.22” now we have a strong foundation and can sell the actual month to month ad management / media buying services.
(Tbh I also do this because most other agencies/sources for ad creative are quite awful so I wouldn’t want to do media buying for a company and NOT be the one supplying the ad creative. Would basically be doing a disservice to clients. So it’s much easier to have the frontend product basically be a prerequisite to working with us.)
Hope this answers your question. Good luck!
Thank you for your very informative message. Our current situation right now as a software dev company is that we have few large projects (4 to 8 weeks) that are hard to close but gives a large margin while our event services (which takes around 12 projects to compare) are recurring and only takes us 3 to 4 days to do and execute.
I would like to focus on event services as it would be easier for us to market and find sales and we already have alot of projects as proof.
I think that’s the magic of productized services. Much simplified customer experience in exchange for recurring revenue/higher AOV.
By bundling multiple services, ideally you’d lower the final price, which could be a great incentive for existing customers to switch over.
I’m on a similar journey as you and have been researching productized services for over a year. Happy to exchange knowledge with you and see how it turns out!
As a software company we’ve been thinking of a product that we can sell while also doing services for event agencies. I think we’ve been looking the wrong way due to financial pressures so now I’m looking on how we can doit to our existing services and customers.
We found a niche, we already have repeat customers, we just need to find a way to reduce developer time and increase to more sales.
Yeah just bear in mind if you have product market fit and you figure out a way to deliver the product even more quickly, the price doesn’t necessarily need to go down.
Given you are investing money in tooling, try to model the ROI, then compare that to other options including status quo.
Thank you for your advice. I might try not changing prices when we release this platform. I thought that when you allow customer to do it themselves (self service) they should pay less.