How to productize your consulting business

Written by Justin on July 23, 2018

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 the need to write proposals and negotiate contracts while ensuring that projects never 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 that 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.

Why Productize a Service

Productizing is a great way to package your time into what is essentially an off-the-shelf product. By streamlining your services, you can improve the long-term stability of a business and generate recurring, fixed-margin revenue as well as develop a low-touch method for getting new clients.

For example, 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, the company offers a fixed-scope, flat-rate packages based on the number of page designs that need to be converted and other factors.

Productizing Consulting Business

Example of PSD2HTML’s Productized Service Ordering Form

The company’s customers come to its website and can place an order without the need for a lengthy consultation — or any contact at all. At the same time, the company has a very good idea of how long each project will take and the profit margin that they will make on the job.

There are also several other benefits of productization:

  • 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 project how many hours a project will take.
  • Reduced Marketing Spend - Sales moves from outbound marketing to inbound marketing with a landing page.
  • Easier to Hire Employees - The narrow scope of the services means that 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.

How to Productize a Service

The best productized services are small and narrowly focused. If you only offer one or two productized services, you can focus on becoming an expert in those specific areas, eliminate work that you don’t enjoy doing, amass testimonials and references in those areas, and raise prices as you acquire more customers.

The biggest risk of productizing a service is that you’re charging on a project basis. Faster delivery translates to a higher effective hourly rate, which provides you with greater leverage over your time. By anchoring the price against the value, you win more clients when it takes you less time.

Let’s take a look at the three most common types of productized services to consider for your business.

Marketing-Focused Approach

Consultants with high priced services should use productized services to generate high-quality leads and produce some income to boot.

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 the visitor can purchase to improve the business on their own before hiring an expert.

Example

Productizing Consulting Business

Companies like SEOptimer.com Offer White-Label Reports for Web Development Agencies

A web developer may offer an SEO audit that is straightforward to produce, and the purchaser will be primed to buy some of the web developer’s other custom services.

Product-focused Approach

Consultants that build audits, reports, or other self-contained services should streamline the sales and marketing of those services to maximize their internal efficiency.

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. 

Example

Productizing Consulting Business

LegalZoom Offers Off-the-Shelf Agreements for $29.00 and Up

A lawyer may offer some of their most common types of contracts as products that can be purchased off-the-shelf, similar to LegalZoom, rather than negotiating each project.

Service-focused Approach

Consultants that provide ongoing services should package those services into well-defined products that act more like a traditional “subscription” than a consulting service.

Think about the recurring services that 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.

Example

Productizing Consulting Business

Bizango is a Web Development Agency Offering Marketing Management Subscriptions

A marketing consultant may offer managed Google AdWords as a service, where they charge a monthly fee to manage an AdWords campaign and provide monthly reporting to the client.

Removing Yourself from the Equation

Congratulations! You have productized your consulting business and streamlined your operations. You have built up a solid customer base by delivering a streamlined service package and no longer worry about writing proposals or expanding scope.

But, you’re probably still limited by your time. You can only help so many clients at the same time before you need to go hire more employees — thereby incurring more overhead.

Many consulting businesses at this stage should start looking into developing software to remove themselves from the equation and improve the scalability of their business.

For example, let’s look at some software options using our prior examples:

  • The web developer may convert their SEO Website Audit spreadsheet into an automated software-as-a-service product that generates a report without any manpower required.
  • The lawyer may create a website where clients can input their information and automatically generate a contract for a set fee with no manpower required.
  • The marketing consultant may develop a pay-per-click marketing platform that enables clients to manage their own marketing spend without any manpower required.

By eliminating the need to manually accomplish these tasks, you can scale the business to a much larger number of clients than you would be able to otherwise. And since you have already established the value of the service, you avoid many of the pitfalls of starting a software business from scratch.

Getting Started

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 that a market exists, we can help you avoid spending time on technical problems and instead focus on growing your business.

If you’re interested in learning more, contact us today for a free consultation.

Justin is a tech blogger and independent software developer. He writes about a wide range of topics, from the latest developer frameworks to startup advice.