How to Productise a Service Business: 8 Steps

Service businesses share a ceiling: there are only so many billable hours in the day, and much of the value often walks out the door with the owner each night. Turning a service into a product is how you break through that ceiling. It makes the business more scalable, less dependent on you, and, because buyers pay a premium for recurring and scalable revenue, more valuable.

Productising means packaging what you do into a standardised, repeatable product that customers can buy off the shelf, rather than a bespoke engagement quoted by the hour. Video marketing companies have turned filming services into do-it-yourself studio kits; restaurants have turned dining into retail meal ranges. Here are eight steps to do the same with your service.

Step 1: Solidify your niche

The first step is to narrow your focus and identify exactly who your customer is. It can feel counter-intuitive to cut down your audience, but a product needs to hit home for a specific group, where a service can be adapted to almost anyone. Once you have your niche, tap into that community to understand what they actually want, considering demographics, firmographics, life stage and company stage as you research.

Step 2: Assess ideas with the TVR test

At Exit Advisory Group we use a simple framework to choose what to productise: TVR, standing for Teachable to your employees, Valuable to your customers, and something they need Recurringly. To apply it:

1. List every service you could offer your niche.
2. Score each one from 1 to 10 on how easily staff could be trained in it, how valuable it is to your niche, and how often customers would need it.
3. Take the highest scorer forward. If you want multiple products, repeat the process.

Step 3: Understand what your product fixes

To market well, you need to know exactly what problem your product solves. A do-it-yourself studio kit makes producing professional video at home easy; an affordable meal range makes a restaurant's food accessible at home. Be clear on what yours does, for whom.

Step 4: Brand your product

Unlike a service, where customers hire a person, a product is a thing, and things need brands rather than names. A good brand is trustworthy, memorable and flexible enough to evolve. Invest in getting it right, because it carries the trust that a face-to-face relationship used to.

Step 5: Be transparent about what's in it

Service marketing leans on bespoke proposals; product marketing rewards transparency. Customers want to know exactly what they are getting, in a clear, itemised way. Think of it as the difference between a lawn-care service and a bag of lawn fertiliser the customer spreads themselves: with the product, they see precisely what is in it.

Step 6: Test internally and pre-empt objections

With a service you get constant, direct feedback; with a product you lose that face-to-face channel, so you have to anticipate objections before you go to market. Consider everything a customer might question, and address it up front:

• Will you offer a money-back guarantee?
• If the product is for a home or vehicle, is damage cover included?
• How much training or certification do staff need to deliver it?
• What is its environmental impact, and can you back up any claims?

Step 7: Price it

You are used to quoting by the hour, day or project, but a product needs an upfront price. Factor in your production costs and staff wages, and analyse competitor pricing before you decide. The right price covers your costs, reflects the value to the customer, and holds up against comparable products.

Step 8: Create urgency

A service sells itself partly on scarcity: there are limited hours, so customers know they have to book you. A product has no such natural limit, so you have to give people a reason to act now rather than later. Limited-time offers, limited availability or short-run releases all create the urgency that turns interest into a sale.

Where a good adviser fits

Productising a service is one of the most effective ways to build a more scalable, valuable and saleable business, precisely because it creates the recurring, transferable revenue that buyers reward. It pairs naturally with the other value drivers covered in the recurring revenue models and 10 steps to increase your business value.

Exit Advisory Group helps owners of businesses in the $3M to $100M range build value and prepare for a strong exit. To understand how a change like this feeds into what your business is worth, explore our business valuations service.