How many hours do you spend writing and negotiating proposals each year?
After you’ve signed a contract, how often does a project move beyond the original scope?
Productizing your consulting business is an elegant way to solve these problems. By creating fixed-scope, flat-rate service packages and selling them via landing pages, you avoid writing proposals and negotiating contracts. You also safeguard against "scope creep," which is when projects move beyond the original scope.
Fixed-scope, flat-rate service packages are a great way to avoid writing proposals and negotiating contracts.
The best part is you don’t even need to build any software! I know, I know, a custom software company telling you not to build software seems...strange. But many of our best clients started by productizing their services before reaching out to us to build a full-fledged software solution. And they’ve gone on to serve customers like Yale and Dartmouth.
What's inside this post:
- What is productized consulting?
- Why productize your service?
- What consulting services can be productized?
- How to package your consulting services (3 approaches with examples)
- How productized consulting leads to better software products
- Getting started with your product
What is productized consulting?
Productized consulting is a way to package your expertise into a fixed-scope, publicly priced thing people can buy. In most cases, it’s selling a high-value service as a low-overhead deliverable so you earn more income and have fewer logistical headaches.
Productized consulting is packaging your expertise into a fixed-scope, publicly priced thing people can buy.
Why productize a service?
Productizing is a great way to more-or-less package your time into an off-the-shelf product. By streamlining your services, you improve the long-term stability of your business and generate recurring, fixed-margin revenue. You also develop a low-touch method for getting new clients.
What's this look like in real life? PSD2HTML is a web development agency that converts static Photoshop designs into the dynamic HTML/CSS code that makes up a website. Rather than scoping out each project and writing a proposal (what most agencies do), the company offers fixed-scope, flat-rate packages based on factors like the number of page designs they convert.
Customers come to the PSD2HTML website and place an order without a lengthy consultation—or any contact at all. At the same time, the company has a very good idea how long each project will take and the profit margin they will make on the job.
7 benefits to productizing a service
The biggest benefits of productizing a service or consulting business are:
- Improved client experience - There are clear expectations and the ordering process is quick and easy.
- Easier to scale revenue - There is a well-defined scope that makes it easy to know how much you can take on.
- Predictable profit margins - The well-defined scope helps you accurately predict how many hours a project will take and how many resources it will demand.
- Reduced marketing spending - Sales moves from outbound marketing to inbound marketing with a landing page.
- Easier to hire employees - The narrow scope of services means you can hire specialists more easily.
- Easier to sell the business - The streamlined nature of the business makes it much easier to value and sell.
- Better customer understanding - Frequent contact with target customers helps you identify painful problems and validate what solutions they’ll pay for.
What consulting services can be productized?
Most consulting services can be productized, or positioned and sold as a product. Including web development, design, content, copywriting, customer research, and growth consulting.
But keep in mind a productized service is easiest to sell if you have a repeatable process, proof of customer value, and testimonials of effectiveness. This is especially true if you’re assigning a high price to the productized service. I may take your word that your $15 ebook is worth my money, but you’ll need to show me some serious ROI before I hand over $1,500 for your example.
A good examples of this is Patrick McKenzie. He was able to sell a $500 email course like hotcakes and make customers several hundred thousand dollars in the process. It created more leads for consulting that he then priced at a higher rate.
But one of the reasons this product was successful is it’s a service McKenzie had refined and practiced for years, before packaging it into a product. What’s more, he had serious proof of return and examples from recognizable companies like WPEngine.
You don’t have to have been in the game for a decade before you productize, but you do want to make sure you know what you do, why it helps, and what return customers can expect. It’ll make sales a lot easier.
How to package your consulting services: 3 approaches
The best productized services are narrowly focused. If you only offer one or two productized services, you can focus on becoming an expert in those specific areas, eliminate work you don’t enjoy doing, amass testimonials and references, and raise prices as you acquire more customers.
Let’s take a look at the three most common types of productized services you can consider for your business.
What it is: Also known as a foot-in-the-door approach, this is where you take a small piece of your service and sell it as a product. Example: audits, discovery sessions, e-books, or e-courses. Consultants can use the marketing-focused approach to generate high-quality leads and produce some income to boot.
Why it works: You’ll part with $400 more easily than $40,000, right? So will most people. Selling a small piece of your service helps you build trust for larger transactions. Just like McKenzie did with his email course above.
How to do it: To do this, think about how to create a small version of your service and package it into a product. For example, many consultants have converted their “contact us” call-to-action into an e-book, e-course, or audit that visitors can purchase to DIY improve the business before hiring an expert.
Claire Sullentrop, a marketing consultant for SaaS companies, sells one hour strategy sessions for $345. These help tee up her more intensive (and more expensive) in-depth engagements. Other examples include Brennan Dunn’s Double Your Freelancing Rate e-course, Val Geisler’s Fix My Churn audits, and Samuel Hulick’s User Onboard Training.
What it is: A fixed scope, fixed price package that encapsulates one of more of your services. Example: a copywriter sells 10 onboarding emails for $3,000 or one landing page for $1,000.
Why it works: If you’re selling a service you’re super familiar with, you have a good idea how much value it delivers vs. what it costs you. On the flip side, customers like to know exactly how much they’re paying and exactly what they’ll get in return. Win-win.
How to do it: Think about your most common projects and determine the typical scope, how long they take to complete, how the deliverable usually looks, and how much you charge. You can then develop a standardized offering or offerings for those services that are amenable to your ideal business model.
wptheory took website building—a service most agencies and developers create proposals for—and packaged it into a done-for-you product offering. They charge a flat fee for a fixed scope project that customers can easily purchase and schedule from the website.
What it is: A subscription-like model where clients purchase ongoing service packages for 3+ months or indefinite time periods. Example: social media management, ongoing SEO optimization, routine website upgrades, or monthly blog posts.
Why it works: Some parts of running a business suck, and business owners will pay a great deal to routinely eliminate necessary pains.
How to do it: Think about the recurring services you provide, how long they take to accomplish, how deliverables are produced, and how much you typically charge. You should also look at how much competitors are charging for similar services. You can then develop subscription-based services based on these factors.
Running your own content marketing efforts takes a lot of sweat and time. Grow and Convert knows this, and they offer complete management of company’s blog for an ongoing $10,000 a month.
Do you have to choose only one approach?
No. While you may want to start with one approach (we’re all for lean around here), some successful consultants build up to offering all three.
Asia Matos is the go-to-market powerhouse consultant behind DemandMaven and someone we highly respect around here. She helps founders of early-stage SaaS companies achieve rocketship status, and she does it through all three productized consulting approaches: a strategy call (marketing-focused), a go-to-market plan (product-focused), and a monthly marketing retainer (service-focused).
How productized consulting leads to better software products
One of the most successful breweries in Chattanooga, TN, didn’t start out as a brewery. They started out as a taproom. They sourced beers from around the country and chatted with customers across the bar.
They also meticulously tracked sales data.
And after analyzing purchase habits for three years, they realized that while Chattanoogans like the idea of trendy beers, they whip out their wallet for four familiar brewing styles, e.g. light American lagers.
When they launched their brewery in 2017, they started with those four familiar styles. Two years later, 85% of their brewing capacity is still devoted to those beers. While others breweries launched with beers they thought were cool or seemed trendy in social apps, this brewery leaned into exactly what their niche wanted—and has been opening up more locations to serve them ever since.
The cool thing about productized consulting is, much like that brewery starting with a taproom, you learn what customers pull out their wallets to purchase without building any software. Considering the #1 reason startups fail is no market need, that’s one hell of an advantage!
...you learn what customers pull out their wallets to purchase, without building any software.
How this helps you create software products
Maybe, like Pini Yakuel, CEO of Optimove, you know you want to build a software product. In this case, consulting buys you time, experience, finances, and customer understanding. You also get to develop invaluable business skills you’ll take with you into product-building.
In a Mixergy interview with Andrew Warner, Yakuel says, “I got to hone in all my business skills and become very strong at selling, building a business, identifying talent, doing products, all of the things which are not coding.” He also mentioned the first software customer was a consulting customer: “So, the first client was one of the customers from the consultancy...it’s a very smooth transition when you already have existing relationships with people that trust you."
Or maybe you didn’t start out with a vision of building software, but you quickly notice your time is the bottleneck—even after streamlining your service packages. After all, you only have 24 hours in a day like the rest of us.
At this point, consultants start looking into software that will remove themselves from the equation and improve scalability for the business. In fact, that's exactly what Steve Shulman, a client and founder at B3i analytics, was doing when we met him.
Shulman consulted with research universities for 8 years before he hit an inflection point. When we met him, he was using a mega-spreadsheet (140 worksheets) in his consulting practice, but it took 50-60 hours to onboard new customers. To scale his business, Shulman knew he needed to turn his spreadsheet prototype into software.
We helped him do that, and now Shulman can now onboard clients in 2-3 hours (a 20-25x improvement!) and continue growing his client base. He was at max capacity with the spreadsheet. Now, with software, he can onboard several new clients a month. Even better, this scalability gives Shulman the reach and bandwidth he needs to accomplish his mission: changing the culture at research universities.
👉 Read more about how a non-technical founder landed Yale as a customer
By eliminating manual tasks with software, you too can scale your service business to a larger number of clients. Plus, since you’ve already established the value of the service, you avoid many of the pitfalls of starting a software business from scratch. You even have a primed client list for your product. What a set of advantages!
Getting started with your software product
We specialize in teaming up with non-technical founders at business-to-business startups to turn bold ideas into incredible tech products. If you’ve already productized your service and proven a market exists, we can help you stop spending time on technical problems and focus on growing your business instead.
If you’re interested in learning more, contact us today for a free consultation.
Update note: This post was originally published July 2018. We updated it in 2019 to include more resources and examples, plus some extra guidance. Think it’s still missing something? Let us know on Twitter.