Everyone is talking about productized services. If you want to build a scalable service business, this (in my opinion) is the way to do it.
My confidence in this model has come from several years of experience building and scaling productized services here and here to the point of acquisition. For many, the idea of successfully building and scaling a service business is a daunting task.
Typical service businesses don’t scale well and are a trap.
With the right approach, growing a service business or agency to being more than just a one-man-band is achievable. I have seen dozens of hungry entrepreneurs go from zero to hero under this model of productizing their service offering. It’s a relatively simple approach that can make a huge difference in how they run their businesses.
This isn’t anything revolutionary.
It’s really just a different way of approaching the traditional service business model and typical “b-spoke” agency model. There have always been some flaws in this model and the productized approach aims to fix them. The typical constraints and frustrations that are all too often associated with running a service business can go flying out the window as you begin to productize.
In this article, we are going to be exploring ways to specifically productize your SEO agency.
Whether you currently run an agency or are thinking about starting one, this is the perfect article to read. An SEO agency can become productized at any moment. All it requires is a little bit of restructuring to make a massive difference. The payoff can be tremendous. Case and point look at The HOTH.
We will be answering the following questions in this article about how to productize your SEO agency.
- What is a productized service?
- Why should you productize a service?
- Are SEO agencies scalable?
- What challenges do SEO agencies face?
- Can an SEO agency actually be productized?
- How can you start a productized service?
After reading this article, if you have any further questions about the topic, please do not hesitate to contact me. I am always more than happy to answer any questions business owners have about productized services. I am incredibly passionate about the benefits of this business model, and am ready to help make it work for you. Let’s dive in!
There is nothing worse than seeing lost potential.
I look at many service businesses in despair and see how they are run. If they just positioned their services a little differently, through a new model, a few tweaks, they could be ten times bigger than they currently are. It’s a real shame. The hard reality is many business owners are not open to change, even when things go wrong.
Change is also difficult as you grow.
The productized service model isn’t just for ambitious entrepreneurs with dreams of scaling their operations to unbelievable extents. This model can work equally well for those who have no desire to be empire builders. If you are self-employed and have no real desire to grow your service business into a bigger operation, the productized model could still boost efficiency.
No matter how small or large your ambitions are, the productized service model has the potential to provide you with a significant amount of benefits. This model could help you to build the business you never believed you could have.
The traditional service business model is highly inefficient. Once these inefficiencies disappear, things start to get exciting.
Let’s dive into some of the core questions surrounding productized services.
What is a productized service?
A productized service is a refreshing spin on the traditional service business model. This is where you offer a pre-packaged, hyper-focused service at a set price. By repositioning your offering, you end up selling the service like a product. It’s really that simple. Many benefits come with being a productized service and we will be diving into those shortly.
The productized service model is not limited to particular industries. You can apply the fundamental principles of this model to any service online or even offline. It doesn’t matter what services you are providing, there is a way to simplify your offering through the productized service model. Here is a breakdown of the main characteristics of a productized service:
- Packaging your services with set prices.
- Recurring services with even monthly or quarterly pricing.
- Specific done-for-you solutions.
- Focused on serving a niche or targeted market.
- Systematization for growth with or without the founder.
- The ability to buy with a click just like purchasing a product off Amazon like this example.
These are just a few characteristics of a productized service. Your business doesn’t need to have all of these to be a productized service. Ultimately, you need to do what works for you. If you pick and mix the characteristics of several different business models, you will find what works for you. This is why many agency entrepreneurs eventually end up navigating towards a productized service model.
Systematization for growth with or without the founder is a big one. If the founder was removed from the day-to-day running of a business, what would happen? In most cases, the business would just completely fall apart. The productized service approach is designed to prevent this from happening. It gives you the freedom to take a step back from the daily operation and focus on customer acquisition and growth strategies.
Think of the classic working “In” vs. “On” your business conversation.
Why should you productize a service?
You can think of a productized service as being like a hybrid model, blending characteristics of a service-based and product-based business to create something altogether more efficient and effective. The truth is, all business models have flaws and the traditional agency business model has plenty. The biggest problem service businesses face comes as a direct result of how they position themselves in the market.
The “Gap” between a typical service business, and what is a productized service is really made up of “Processes”, “Positioning” and “Expectations”.
Most SEO agencies actually are creating their own problems and scope creep simply by not positioning what they do correctly.
Many service businesses offer all-encompassing solutions. For instance, digital marketing agencies usually deliver a wide variety of marketing solutions to businesses. The problem is, there comes a point where everyone is on a custom package with a bespoke solution. While this might sound great (cash flow wise), you end up with a workload that’s impossible to scale. Saying yes to everything does have a downside. The problem is this second order consequence is harder to see until it is too late.
Things are much easier when everyone is on tiered packages under the same pricing. The margins are the same across the board, giving you the freedom to outsource the workload. A service business with clients on bespoke packages at seemingly random prices isn’t scalable. If someone else came into the business or you handed the workload over to someone else, the operation would be immensely confusing and break.
At the end of the day for me, it all boils down to simplicity. Dozens of customers on different packages is a disaster waiting to happen long term. Sure, you might be able to manage it now, but what happens when your customer base doubles? Tripples? What breaks? There’s an art to scaling and it’s incredibly underrated. Designing tiered packages with set prices is your secret weapon for success.
It can take a considerable amount of discipline to stick to tiered packages. You will have to say NO to many people.
There are going to be prospective customers that will push for custom solutions. Whether or not you go forward with their demands is up to you. In the short term, it might make sense, but what about the long term? If you started offering custom solutions to five customers, how would this affect your operation? These are all things worth considering.
I know how tough it can be to turn down a prospective customer, especially when you’re just starting. On paper, it might make very little sense. However, you need to think about how a customer that doesn’t fit into your set packages could affect your workflow. As well, peace of mind. If meeting their demands is going to slow the pipeline down for everyone else, is it really worth it? This is where some good thinking time comes in handy.
Are SEO agencies scalable?
Start thinking about customers, not clients. It’s really important to be able to distinguish between having customers and clients. Typically, clients receive custom solutions to meet their unique requirements. Whereas customers are provided with packaged products. It requires an entirely different mindset. Clients are unique, customers are close to identical.
It’s these close-to-identical customers that make it easier to deliver services at-scale. When you have a handful of clients with bespoke solutions, things can get a little tricky. This can quickly amount to chaos as you start to grow the business and start working with more people. Ultimately, it all comes down to sustainability, setting your business up to succeed regardless of how vast and expansive it gets.
It is entirely possible to grow an SEO agency. However, very few SEO agency owners have the systems or structures in place to do this without destroying their business along the way. This sounds dramatic, but it’s true. If an SEO agency is delivering bespoke solutions to five clients, by the time they reach ten clients, the agency will land itself in the classic “scale trap.”
What’s the solution to getting out of this trap? Well, you should avoid walking into it in the first place. However, if you are already there, you need to think about repositioning your service offering and delivering your services in set packages. With set packages, you will not have to worry about the complexities of delivering bespoke solutions to multiple clients. As you grow you will be able to add-on products and offerings to your core productized offer. This was very similar to how The HOTH grew and added products to their offerings.
At this point, you can start to think of your clients as being customers, all subscribed to the same or similar packages. This is how you scale an SEO agency. It’s not going to be easy. Having the guts to turn down potential customers if your set packages don’t meet their needs is admirable. You need to build for the long term, not the short term.
Systematization is also an essential component of scaling your SEO agency. How can you cut yourself out of the day-to-day operations? This isn’t going to happen instantly. The transition from being heavily involved in the operation to running the agency from a distance should be gradual. No matter how precious you are about the workload, you will not be able to scale an SEO agency and remain at the very core of the operation.
Of course, you could if you wanted to be. Although, this might start to create bottlenecks. Every day, ask yourself, what is the best use of my time? Is it working flat out to meet the needs of my existing customers or focusing on outreach to build and expand the customer base? There’s no right answer to this question. Focus on playing to your strengths.
What challenges do SEO agencies face?
SEO agencies are often trying to deliver too many services out of the gate. It’s rare to find an SEO agency that solely focuses on delivering a very particular service, such as link building. Most agencies will offer all-encompassing services to meet every potential need and requirement of businesses across the globe. This is where the problems begin.
A general lack of focus on specific services can complicate your operation. It can be tough to turn down work, but why not pour your agency’s efforts into mastering one particular aspect of SEO, such as B2B link building? Or high-quality content creation? Would you rather be an average SEO agency or the go-to B2B link building agency in the world? It’s all about picking your battles as you build.
The problem is, many customers want all-encompassing SEO solutions. You can try to manage their expectations by creating set packages that include a variety of solutions while keeping the packages positioned as single products. This is a balancing act and will require some thought. You may want to conduct customer interviews to find out more about whether they would like this. White-labeling productized SEO services can also be a shortcut here.
Can an SEO agency be productized?
An SEO agency can most definitely be productized. You just need to find a way to narrow down your offering, create set packages with tiered pricing, and systematize the behind-the-scenes operation to remove the emphasis on you, the founder. These core pillars of the productized service model might radically transform your SEO agency.
You could go from being an unscalable mess to an agency perfectly positioned for rapid growth. This isn’t going to happen overnight. It could take several months for you to get all the building blocks in place to position your business as a productized service. My goal is to try and get you thinking about this type of model sooner than later.
How can you start a productized service?
Are you ready to transform your SEO agency into a productized service?
Look at joining communities around productizing and finding examples of others doing the same. I’m also open to helping and sharing more There has never been a more exciting and challenging time to grow your business. If you want to grow, you are going to need the rallying support of those around you.
If I can help reach out to me anytime at Scaling Services here.