We often hear from customers starting on their productization journey:
“Can we productize without a significant investment in technology?”
The short answer is yes, absolutely. Do not make building a technology solution a blocker to starting your productization journey.
There are many benefits available with little or no investment in technology. In fact, most organizations start their productization journey with a goal to create more efficient, standardized processes. The efficiencies enable more consistent delivery that improves quality to customers and improved margins. Some businesses we’ve worked with even talk about having to turn away work because they just can’t hire fast enough to keep up with demand. Some of the other goals we hear are:
- Find ways to do more with fewer people
- Quickly train and enable new people to meet the same quality standards
- Build recurring customer relationships vs having to re-bid for every piece of work
- Reduce the amount of customization (including the sales proposals)
- Address customer concerns with a time & materials model that does not incentivize doing the work more efficiently
All of these benefits can be achieved by standardizing existing services. From our work across dozens of organizations, and research across many more, we have seen several patterns emerge around common approaches to succeed in productization that don’t require heavy tech investment. Here are the four most common paths to success:
1. Package and Standardize What You Already Do
One organization we worked with helps organizations with the implementation phase of rebranding efforts. What has traditionally been a highly complex and bespoke process, they’ve documented, put into standard workflows that can be driven by a proprietary questionnaire, and can package and sell a standard set of templates, tools, models, and project plans that enable marketing teams and branding agencies better plan for the full end-to-end implementation. For their existing customer segment, it allows their team to leverage decades of experience for more efficient and consistent delivery. But it also opened up a new market segment of smaller customers that can’t afford the full services to still get some level of help through standardized templates, models and plans to start with. As an MVP, this was all done in spreadsheets, survey platforms, and low-cost workflow software.
To successfully package and standardize existing services, start by documenting your existing process to find the commonalities or the “happy path” that represents the 80% that is typically common across customers. You can make that a standardized offering, packaged, branded, and sold off-the shelf. Typically, you see a faster sales cycle because there is less work to build a custom statement of work. You have confidence in being able to consistently deliver quality. And in many cases that can open up the service to a more price-sensitive segment. For customers who need something special, you can charge a premium for the customization and still leverage standardized workflows to speed up most of the work and improve margins.
2. Tech Enable Existing Service with a Low Code / No Code Solution
Several organizations we work with have built their services offerings around proprietary content. And in several cases they train on that content. This area is ripe for buying an off-the-shelf solution that will house content, enable the organization to build training modules, and make it more efficient for consultants, and a better experience for customers.
To tech-enable existing services with off-the-shelf software, start by mapping your process. Talk to customers. Find where tech could help you scale what you do, and where you could enable customers to scale & ease their interactions with you. There are many great off-the-shelf, configurable software solutions that can help standardize a services workflow to deliver content to customers. The big caution point is to avoid the temptation to sign a large license contract with one of these vendors to support your planned scale. Before you commit to using a vendor, pilot their solution against your workflow and content creation. Have them walk you through it in a demo, and when you purchase, start with the absolute minimum amount of licenses you’re allowed to buy, get it working for one case, then consider scaling up in your organization.
3. Create a Community or Be the Facilitator of a Marketplace
One organization we work with is a leader in supporting healthcare systems to improve the adoption of digital health solutions in their organizations. They identified that a big part of the value customers gain is about helping organizations make better decisions, empowering them to learn from each other, and facilitating connections with trusted vendors that can help them. They identified an opportunity to scale their consulting services by building a member network with a digital meeting place that could leverage their expert content and ability to facilitate meaningful connections.
To successfully build a community, start by identifying the problems that are common for your customers. Test out the value by facilitating forums with some of them, seeding them with your own content that will get those conversations going in more productive ways. Often, there is another group that is willing to pay for access to your customers, which may allow you to create a marketplace. But the customers will want your help in regulating the interactions and performing some level of pre-vetting of those marketplace vendors. The caution here is that there can be only one or maybe a couple of member communities that a set of users will want to belong to. And although there are inexpensive off-the-shelf solutions to host communities, don’t underestimate the investment in community management.
4. Deliver the Same Service, but Change the Business Model
One organization we work with offers ongoing maintenance and operations service to customers. In the past, the work was done as time & materials engagements, but they have started piloting a subscription-based managed service model where they agree to deliver certain service levels for a subscription fee. This gives their customers a better ability to budget and gives the organization the ability to better plan their own staffing levels. The incentives are aligned in that if they deliver higher quality more efficiently, both they and their customers benefit.
To productize by offering a new business model, start by analyzing how customers are currently utilizing the offering and the value it delivers. Define service levels of value customers care most about. Then build a pricing and packaging model that aligns the value received with how you charge them, typically on a recurring revenue basis. Customers will like it because it aligns your incentives with theirs.
These four models to productize with minimal tech investment are not meant to be an exhaustive list but show common approaches that have proven successful. It is possible to productize without investing in technology at all, or for very little, often less than six figures to get started. Based on our most recent benchmarking survey, the organizations that are the most successful at productizing can earn revenue from their productization efforts in under a year. This is exactly why so many start by standardizing existing capabilities, content, and processes to be delivered as a productized service. From those early wins, organizations create financial and reputational successes that can be leveraged for expanded productization efforts in the future. Even in the Age of AI - you don’t have to go out and hire your own highly expensive AI developers and experts.
To learn more about how to productize quickly, we’d love to talk to you.