Productization is the process of taking a skill or service that has been used internally and developing it into a standard, fully-tested, packaged, and marketed product. It results in a cohesive, repeatable offering or set of offerings that solve a business problem for your customers. The offerings can be created to accommodate a degree of customization to make them even more valuable to your clients.
Both product and service offerings can be productized. An example of how services might be productized is a consultant creating a product or service offering based on their knowledge and expertise. Sometimes products and services are bundled together in this process. Your pricing may also change, and this is not atypical for many of the organizations we work with.
If you have not productized your offerings yet, there are compelling reasons to consider it. Even if you have already revamped your offerings in this way, it may be worth reviewing to see if there are additional changes that may make your offerings more attractive to the market. There are many benefits to the productization of your company and offerings. Here are just ten of them:
- Growth that does not require additional resources.
Typically a company that wants to grow needs to add resources. By standardizing and packaging your offerings, productivity can increase and capacity expands.
- Faster scalability.
While growth increases your top line revenue, scaling increases the bottom line by improving revenue while reducing costs. Productization enables more efficient scaling.
- Increased profitability.
With increased growth and scaling in addition to minimized costs, profitability will rise.
- Clarifies your offerings and the value they provide.
Clearly defined offerings are the hallmark of a productization effort. And in clarifying the offerings, you will be adding clarity to the value they provide to your customers.
- Differentiates your solution(s).
“One-size-fits-all” solutions make it more difficult to show individualized value and benefits. Productization results in clearly defined and differentiated offerings.
- Focuses on solving the client’s pain point(s), not on the transaction.
If you spend less time explaining your products or services, you can focus more attention on how they solve the customer’s business issue(s).
- Expands access.
A common objection is the affordability of your products or services. Productization can eliminate this issue and remove other barriers that limit accessibility to your offerings.
- Generates more sales.
With expanded access comes the opportunity for your sales team to sell more, faster. Productization can also create opportunities to upgrade, resulting in better customer retention.
- Establishes the client relationship earlier and gets you in front of the buying decision.
If your solution enables earlier resolution of the client’s issue, you can increase sales. And once your client is working with you, upgrade needs will be easier to spot.
- Enables upgrades as client needs grow or change.
Customers prefer to stay with the same vendors and suppliers until they outgrow them. Productization enables you to tier your offerings so they fit the customer needs longer, which also enhances your responsiveness.
At a time when many companies are experiencing longer sales cycles and fewer sales, profitability and revenue are more important than ever. Productization may be the boost to your bottom line that you need to close the second half of 2023 stronger than the first.
If you’ve already improved your offerings in this way but are still experiencing lower than expected revenue, you may want to look at your pricing strategy. Here is a recent blog describing three pricing strategies.
For more information on pricing strategies or productization, schedule a complimentary consultation.