Is Productization Worth it?
Productized consulting is a relatively new approach within the consulting industry. Its efficacy in small knowledge-intensive business service companies was researched by Katriina Valminen and Marja Toivonen in a study titled Improving Competitiveness and Performance Through Service Productization. The company studied by researchers successfully productized one of their services, indicating a promising future for the use of productization in this business sector.
Productized Consulting Background
Consulting has a unique business model which has historically not utilized productization. In most cases, consultants provide services that are specific to the individual client and their unique needs.
Acquiring a new client involves hours spent writing and negotiating proposals, then renegotiating them (or suffering a profit loss) when the project moves beyond the original scope.
Enter productized consulting. Productization is the process of “packaging” your products or services into flat-rate options that customers can choose from. It creates the unique advantage of economies of scale and eliminates timely proposal writing and customization expenses from your business model.
Productizing your services can be a stand-alone change in your business approach, or a vital component of a larger plan to Grow Your Consulting Business .
Can Consultants Productize Their Services?
Absolutely. Productized consulting can take different forms:
This involves a service package involving specific one-time services.
Example: Perform an analysis of the organization/business to determine the best assessment tool for that company, administer the assessment, and summarize the results.
Clients purchase an ongoing package based on a time period (monthly, quarterly, etc).
Example: After performing service #1, you could present the client with an improvement plan and conduct monthly meetings to evaluate progress and recommend improvements/refinements.
Marketing Product Package
Develop a library of products your client can purchase.
Example: Offer e-courses or e-books that address deficiencies and areas for growth that are commonly indicated in the assessment you administer. Create purchase price points based on the number of employees that will use the course or book.
Benefits of Productized Consulting
How can productization benefit your company?
- Clear client expectations: Your client knows exactly what they will be paying and what they will be receiving.
- Benefits of scale: By offering packages that are repeatable you are not spending valuable time creating custom proposals but are instead refining your service in defined areas. This enables you to offer superior services in less time.
- Reduces Profit Loss From “Scope Overflow:” Custom packages are frequently a victim of “scope overflow,” in which projects more beyond the scope of the original proposal with no compensation adjustment.
- Develops Your Reputation of Expertise: By offering specific packages you become known as the expert for these products and services. Clients will appreciate that your superior expertise leads to exceptional results.
- Eliminates Time-Consuming Work Processes: Productized packages eliminate the hours spent devising customer-specific processes, writing proposals, and negotiating prices.
How to Formulate Your Consultant Productization Packages
Before creating your productization packages, you need to sit down and answer the following questions:
- Make a list of your clients’ most common needs
- Looking at past projects,
- Which ones have provided the most value to your clients?
- Which are the most profitable?
- Which are the most repeatable? (for different clients)
- In what products or services does your expertise lie?
- What parts of your job do you enjoy the most? The least?
Use these answers to compile a list of productized packages you could provide. For each package, ask yourself:
- Is there a way to apply this package to multiple clients with minimal customization?
- Are there any elements of this package that could be simplified or are unnecessary?
- Would I enjoy providing this service on a repeated basis?
- Does this package satisfy the most common needs/requests that my clients inquire about?
- Does the description of the package use industry specific language that clearly identifies the client’s needs that it will address and how it effectively solves a problem for them?
Finally, remember these important pieces of advice:
- If you don’t enjoy it, don’t offer it. Generate your business profit doing something you love.
- If your customers don’t want it, it doesn’t matter how good you are at it or how competitive your prices are.
Answering these questions before designing your productized consulting package results in packages that maximize profit, create customer satisfaction and success, and establish you as an expert in your defined packages.
Need Help Developing Your Productized Consulting Services List?
Are you looking for an experienced professional to ensure that your productized consulting packages maximize customer satisfaction and profit? Robin Kramer is an Online Business Manager that has been working with small businesses for 23 years. She can help you analyze your client base to determine the most profitable and effective productization packages.
To learn more about Robin’s skills and how she could help your business, contact her for a free consultation today.