Insights on How to Productize Services and Solution Offerings

We have many organizations come to us who are excited to start on their productization journey and see it as an avenue for growth and strength. When starting to work with these customers, I often hear them state the following goal:

“I’d like to create a playbook so we can have a repeatable innovation process at my company.”

When developing a pricing and packaging strategy for new productized offerings, it’s crucial to move beyond traditional cost-plus models and embrace a value-based approach. Many organizations are realizing that launching innovative products requires not only technological changes but also a fundamental shift in how they monetize their offerings. Instead of solely focusing on internal costs and margins, they must consider how customers perceive value, aligning pricing strategies with the unique benefits their products deliver.

In this post, I’ll explore how to choose target markets and who you sell to in those markets. To learn more, check out my new book, Commercialize: How to Monetize, Sell, and Market Productized Offerings in Professional Services, written with Eisha Armstrong and Sean Gillispie. 

Commercialize is Out Today! Learn How to Monetize, Market, and Sell Productized Offerings.

“We thought we could just build the product, and the sales would come rolling in. But without a clear strategy for pricing, packaging, and selling it, our launch flopped.” – Chief Revenue Officer, B2B Services Firm

As professional services firms evolve and productize, a significant shift from relying solely on traditional service revenue to seeing substantial product revenue happens. This shift is more than a strategic pivot; it necessitates a fundamental change in financial operations and metrics.

Because productization can require significant investment, market sizing is often an important first step in testing the viability of an opportunity because business leaders need confidence that the investments have a good chance of paying off. Too often, B2B organizations rely on top-down market sizing to drive investment decisions. There seems to be an all-too-common practice of showing an opportunity is viable by arguing that you just need to capture a small percentage market share of a huge market segment in order to have a booming business. But this common top-down approach ends up misleading organizations into poor decisions because the models are designed mainly for direct-to-consumer businesses to make assumptions about vast markets. And these types of results provide no answer about near-term potential revenue.