Part 2 - Understanding Productization: The Basics of Converting Services into Products

The big question is, what exactly does it mean to productize a service?

In simple terms, its about turning your unique, your own style / imprint services / customer approach into a standardized product, which can be copy pasted, is scalable and can be delivered by anyone who is trained to do so. This scale is, what can change the way you operate your business and plan to scale to a different level.

For e.g, I was talking to a wonderful teacher (UPSC Coaching) yesterday, who has an impressive 40%-50% Success rate in prelims. But at any given point of time, he is not able to scale beyond 50-60 students. He sought my help in opening ‘franchise’ centers to scale up no of students. ?The very first step in this journey is productizing his teaching / testing methodology which can then be transferred to other teachers enabling them to deliver similar results for the students.

Till such time, the gentleman is not able to productize his offering he will not be able to scale.

What is Productization?

So simply defined, it is the process of converting your person dependent service delivery into a process driven standardized product with uniform delivery. It starts with taking a core service that one provides and convert it into a repeatable, scalable offering that can be sold to multiple customers.

Lets understand the process of productization:

1. Identify Core Services: Pinpoint which of your services is in high demand or has maximum customer interest in. In short what is the one delivery which the customer is paying for. Another aspect, what is the possibility of standardization of this service. Normally these are services that solve common problems and have broad market appeal. In the example quoted above, the core is the teaching pedagogy, and the evaluation / insight mechanism developed by the teacher.
2. Define the Product: Customer will always want to know what they are paying for. As services are intangible, the structure shall clearly define the product and delivery (not the outcome) Include features, benefits, and any deliverables that will come with it.
3. Develop a Process: A process needs to be defined which is repeatable, can be enhanced and can be followed every time to deliver results. This process again needs to be documented to ensure consistency in delivery. It is more like a train the trainer document which you will use every time to train a new person to ensure right delivery.
4. Package and Brand: The Package or the product cannot focus only on the core delivery, the experience is as important, hence it should contain all elements of the service, which deliver a good experience. People buy brands but experience the products. How do you communicate the value and benefits which the product delivers and convert it into a ‘brand’ to be associated with, is the key to success and commanding a premium.
5. Set Pricing: Pricing is where most of the product owners struggle. On one hand you need to compete in the market and on the other hand you cannot devalue your offering. It is a tight rope walk and needs some quicks testing and understanding of market dynamics to get it right. There are different pricing model based on the service being offered, one time sale, subscription model, membership fees, tiered pricing, freemium model to gain customer appeal etc. Pricing can make or break this product. In bespoke pricing, you have the ability to negotiate and find right pricing or change pricing as you move along. In standardized pricing you may not get the luxury of making changes to the pricing often.

Why It Matters:

Productization is a crucial element in your quest to scale up and succeed, efficiently. It has the ability to transform a people dependent service into a product that can be replicated and sold to a larger audience in a larger geography, enhancing your ability to grow and be successful.

Endgame:

By productizing your services, you’re setting your startup up for success. Here’s what to expect out of this change

• Consistency: Ensure every customer receives the same high-quality experience.
• Scalability: Easily replicate and expand your offerings.
• Efficiency: Reduce operational costs and complexities.
• Revenue Growth: Achieve clearer value propositions and better pricing.

@ Unconsult , I and Dr. Seema Singh work closely with organizations helping them in their journey of scaling up the business by getting the right PMF and creating a winning product out of the services.

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