Products or Services? Who really has more fun?

Just like people with straight hair desire curls and vice versa, I often find myself thinking during conversations with fellow business owners, ‘Man, all you have to do is sell soccer balls. You don’t know what it’s like to be in the service industry.’ The disdainful inner monologue continues, ‘If I was sitting in your seat and just had to find buyers for my warehouse stock, I’d be a billionaire.’ Meanwhile, the person on the other side of the conversation counters with their own internal monologue, ‘Man, if I just had to keep clients happy all day, I’d be a billionaire, you service guys have it so easy.’ And there we were, inner monologing at each other and not listening to a word the other said #businessowners.

If we ever ended up listening to one another we might have found out that product businesses and service businesses are more similar than you might think. At the core they’re different, products you focus on the thing, and services you focus on the client interaction and the client outcome. But, today, we’re seeing product businesses focus more and more on the client interaction (thanks to review platforms), and their marketing has, for a while, been all about the outcome for the end user. You’re not selling soccer balls, you’re selling what soccer balls let you do. The interesting thing is that, especially in the creative industry, service businesses are becoming more and more like product businesses. Hence the buzzword — productization.

Productization is just taking a service business and injecting it with the best parts of a product business - easy scaling, predictable costs, and lower levels of customer effort required. In our industry, this is seen in tech-led subscription models that are busy taking huge amounts of work off the legacy agencies that are all about craft and will continue to be about craft. These productized businesses are great, but they are missing a key trick. The absolute best thing about a product business is that your stock generally retains its value (we’re talking non-perishable products here). Sure, your soccer balls might be worth less next year, but they’ll still be worth something. In service businessess your stock is the hours you pay your employees to work, and when your employee isn’t working those hours are gone forever. It’s like having a warehouse of products that are steadily being eaten by termites.?

So productized creative agencies have half solved the problem, but they still have massive payrolls that they need to meet each month. So like any good business, they try make good on it and you end up with a Photoshop expert working as an animator on your account. This phenomenon is the dark side of productization. Businesses that accept their service identity are able to scale appropriately and won’t run into this problem. At Stratia , we class ourselves among the productized service businesses, but we’re getting that one trick right. We source our talent from our talent pool, a group of 350 trusted resources we use as and when needed and bring on for longer jobs as and when needed. So instead of trying to pedal our overstocked warehouse of talent onto our clients, we take full advantage of the thriving creative gig economy to offer our clients the best service they can get — with the friendly benefits of productization.

So who has more fun? It’s the productized service business using a talent pool of course!