Transcription
Hey guys, I'm Robin and in this video I'm going to give you a quick overview on how to start a productized service.
So before we start, um this is uh my previous business and my first uh productized service which is called Many Pixels which I started around 2017. It grew to a multi-million dollar AR business with around 40 designers and uh yeah, as you can see in this tweet from my co-founder. Um it generated a lot of money and it was really worth it for both of us to start this and we had a lot of learnings along the way which I'm going to share in this video.
So why productize services? So first of all um I think there are three reasons. It makes money from day one. So unlike for example a SAS business or for example an e-commerce where um you really have to invest a lot of money in either purchasing inventory or building a product and hiring expensive developer. Usually with a productized service you can basically uh just find a client deliver the service and get paid and hopefully get paid up front as well. Secondly there are scalable. So um by basically having like fixed packages which we'll see later and as well as repeatable processes you can basically scale your business. And finally which is a little bit less more obvious but they're also great launchpad businesses. So before I started my productized service um yeah I didn't have any cash flow but then with the cash flow I was able to yeah just start other businesses.
So here's the agenda of what we're going to talk about today. We're going to look at um definition of productized service and then how to productize your service. So picking a niche, finding your first customer, scaling, uh building a team, process and tools to use and then finally u the mistakes to avoid and conclusion.
So fundamentals, a productized service is a service that is bold and sold just like a product. It usually comprises of three things. A standardized offer, a fixed price, and a repeatable process.
So let's get to um some examples first of productize service. So one of them uh that I really like is design guru. They're actually one of our customers at many request which I'll talk to to you guys about later. Um they are basically a subscription uh based graphic design service and then for a flat monthly fee you basically get access to a team of designers and then you can send various requests. They also focus I believe on the UK market which uh we'll see is super important to basically pick a niche um to start your product based service.
Second one is seller candy. So basically they focus on Amazon. They're kind of like virtual assistants for Amazon sellers. So you can ask various tasks such as um yeah putting back your listing online, managing your inventory, managing the catalog, inactive listings and so on.
Another one which is also kind of a platform based productized service is Hub Snacks. So for a flat monthly fee, you can send all of the basically HubSpot task that you have instead of doing it yourself. You have access to a team of experts to help you with HubSpot.
Another one is DraftDev from a friend of mine called Carl. Uh so basically it's a content writing agency, but they focus on technical uh content writing. So basically content for developers and I think the packages starts at if I'm not mistaken $10,000 a month which also shows that you can charge quite a lot for productized service and then uh another one that I really like uh which I think they have a whole niche of those kind of productized service is avenue HQ or avenue um and basically they do websites for real estate agents but they also then upsell with like SEO services, paid ads and so on. So they're kind of a digital marketing team on demand for real estate agents. And I think this is another great model of productized service. You basically pick a niche and then you get them foot in the door with a website and you can upsell them with various uh marketing services.
So how to productize your service? So there are basically three steps uh that we'll look at uh look at. The first one is picking a niche. Second is packaging your services and then uh pricing.
So to pick a niche basically um an example of a niche is web flow for SAS companies or design for UK SMMES like we saw with design guru um you basically look at a couple of things uh I think that the most important one is picking a large market finding a willing list to pay so for example if you sell to very small companies or like solarreneurs or startup funders usually they don't have a lot of money so they will probably churn quite fast the third one is seeing if there is existing competition If you don't see any competitors, you might think, okay, great. I have the whole market for myself or it could also mean that there is no market at all. And then finally, you might work for this on this for a while. So, I think uh finding something you're excited about is very important as well.
There are other ways to niche down. So for example, if you find a big niche like let's say design, um you can focus on design for the UK market or like one type of design like ads or web flow or like any other kind of design. Um focusing on a specific platform like I've showed you uh with Hopn Snacks. So they focus on HubSpot but you can also focus on Shopify, Salesforce and other ones. And then finally you may also have a unique business model. So for example a lot of uh a big advantage of productized service is that you can basically have a subscription and scale up and down but you could also think about like credit based services or hardly based services and so on.
So a framework to find those kind of uh pain points once you've identified a niche is the jobs to be done framework which I think is super helpful so that you can truly understand the pain points of your customers and then basically create an offer which we'll see in the next few slides. So for example, if you say that you're going to start a design service for SAS companies, you could um think of your target customers and the person who's going to buy the service as a head of marketing as a SAS company and they might have like a couple of task or jobs in the day-to-day uh work. And that's where you're going to come in and say, "Okay, look, we can help you improve the website conversion rates by providing you web flow design for a flat monthly fee." And so that way it really speaks to them and speaks to their pain points. And you can also use uh those pain points in your copy on your uh marketing websites. I think to find pain points I would also look at Reddit, Captera and Gro G2. So they are basically um review websites and usually you can see uh in your competitors uh how basically their clients describe their service what they like, disliked and then that way you can basically understand them a bit better.
So let's create your offer um which is basically three things. what you do and don't do, who is it for. So usually you'll have packages and think in mind like have somebody like basically an ideal customer in mind and finally your pricing model.
Here's again an example from design guru. So they have three plans and you can see here they have their services and what is included and basically they also have like um yeah plans which are likely for different types of customers. So for example, these customers might want video editing and these customers uh might white label the service. So it might be more for agencies or bigger companies.
These are another pricing model from upders. So they basically charge a little bit differently where they have holy based service with plans of 20 40 60 and 80 hours which is another great productized service model that I highly recommend agencies to follow because it's super transparent for companies and they can also basically purchase hours up front which gives you gives you a lot of cash flow.
So another one uh is pricing which is super difficult and there could be a whole video on this but basically it's important that you don't price too low but also look at your costs and add your profit margins. You can also look at the competition and see where you fall. Um I also think that at the beginning when you start your product service don't create too many packages. Uh just keep it simple maybe one or two services. So for example draft dev that we saw earlier in the video they only have one package. So that way it doesn't confuse the customers uh but it's also way easier for you operationally.
So most important how to find your first customer if you get started. I think call outreach and content marketing are two great ways um yeah to start. So let's start with call outreach which is what I've done uh for my previous productiz service and which I still think works today if you do it well. So I believe personalization in color is not really important. it is in a in some sense but the most important is uh basically relevance. So in this call email that I've written I think why you reach out is the most important. Basically people who receive a cold email don't really know why uh you email them. So it's important to explain what you do. Um and then your value proposition so it's super clear here. And finally a call to action. So it could be either either a demo or sending a loom video or asking for for feedback but just make it clear because there are so many cold emails that are a bit vague and the person doesn't know what to do next.
So a few other things for cold email. I think AB testing your email is very important. So maybe send like two or three types of emails and like uh subjects and email content. Focus on inmarket leads first. So that basically means uh people that are actively possibly looking for your product. So what I've done uh for my previous productized service is that basically I was looking for customers that were already hiring a designer. And so I told them, hey, I saw you were hiring a designer or I saw you just hired a head of marketing. Here's what we do. Would this service be helpful for you? And so a lot of them replied and then we close a few deals. Keep emails short as well. So once you receive an email, usually you really don't have time to read it all and probably you won't get a lot of response. So, it's super important to keep it short. Maybe like test it again, maybe a few lines at most. Uh follow up. And finally, creative. Be creative. So, for example, you can record a video. Uh when somebody uh replies to your email, uh you can just show them, for example, some examples of work you've done just for them. Uh there is a lot of ways to uh to be creative in that sense.
So, uh next one is content marketing. So, if you run a creative service, I really highly recommend you to show your work. So for example, uh redesigns that you've done, uh your work in your work process or work in progress, uh case studies, free resources, and finally SEO, which we'll look at in a moment.
So this is an example of a post that I've made. So when I started my previous company, Manipixels, I joined all of the Facebook groups possible of like entrepreneurs, SAS companies, and so on. And I just showed examples of our work, and a lot of people replied, and uh this got us some customers. I don't know if Facebook today really works, but definitely Twitter, LinkedIn, I think it's still super popular. So, you can show your work there. So, for example, here's an example of Yuri who just posted like uh logos that he's done and that that did he didn't really use uh for his company. And so, um yeah, so I think that's uh quite a nice way to still use your work in some in some ways.
Another one is basically giving free resources. So, Maximillian is running a service called Mag Maj Mear uh which is basically a design service for German companies mostly and they give a lot of free stuff and free templates and this gives them a ton of visibility on LinkedIn and possibly clients as well.
Another free resource that we've done at my previous product service, we did a free illustration gallery. And so we got a ton of backlinks which helped us also to rank our blog content. And finally uh you can also give uh just some behind the scenes and building in public works quite well as well and also gives you just some more yeah brand awareness.
for SEO basically you have we could do a a video just on this but design examples as well as comparison articles work really well. So for example like your competitor and then alternatives works well or like yeah this one B2B sales tech design I believe that a lot of your a lot of your target customers would probably look for these kind of content.
Now let's talk about scaling. So we'll uh look at building a team, processes and tools to use.
When it comes to building a team, um I think there are three big lessons that I've learned uh from my previous company. The first one is hire full-time. So one of the mistake that I've done is I was at the beginning hiring freelancers, but then I had two issues with them. First of all, they had really uh crazy salary expectations because maybe they would do one logo and get $500 and then I was telling them, hey, you would be paid like $500 a month or something like this. And they were like, uh, no way. I cannot do that. Uh, but then I started to focus on people that were really valuing like a full-time job and stability and maybe growth in the team later. Um, and so that worked really well. Then, uh, setting clear expectations uh is also very important. So what the work is about, what are the working hours, how we will communicate and so on. And I think that's something that you can clarify in a job description, but also when you on board your team members. And then finally, uh focus on uh team members that have really great communication skills. So you don't need to do a tons of process because that's going to overwhelm them and they probably know the job better than you. For example, if you hire a designer and if you're another creative, that's also a mistake that I've done. So I just started to focus on hiring great designers but also designer that had great communication skills.
So who to hire? Um this is more for design service but I think this is this also applies to other productized service. So we hire project managers in different time zones as well as uh designers also in different time zones for different clients.
So uh processes now which are very important basically for uh processes and SOPs one of the thing that you can do is as soon as you do something more than once document it can be in a notion notion file you can add screenshots on how to do the work or record a a small loom video but basically screenshots bullet points and then uh you can create categories for different things. So I think you can create processes for hiring and on boarding. So for example for hiring team members we have a four-step process which is first we post a job on LinkedIn second um employees or like candidates fill a Google form third they get um I think an interview and fourth was a test task or something like this. Um so yeah we created process basically for everything in the company so that uh I could hire someone and then yeah free up time and then focus on scaling the business. Uh client on boarding and communication is also some processes that you can set up. Service delivery uh one of the thing that we've done there was creating an internal wiki. So basically for uh delivering a task from A to Z, we just explained to our team members how it was uh supposed to uh take place and what was the communication uh that was required there and so on. And I think also finally um setting a process for marketing SOPs is super important. So could be stuff as simple as how do we do uh content marketing on LinkedIn or how do we create a newsletter and so on. So you can delegate that as well.
Uh so yeah let's go to tools to use. So of course many requests is my company. It's basically a client portal software for productized services. So you can have everything that you need uh to manage your service in one place. So projects client management messaging uh bidding and invoicing time tracking uh zapia integrations and a bunch of other things. So this is a quick overview. I will add a link in the description below if you want to check it out. There is a free trial and uh we can also help you uh get on board if you have an agency. If you are just starting many maybe many requests won't be a fit for you yet, but um nevertheless you can still try if you want but uh it's usually for agencies that have at least five team members uh five to 10 team members. But still it's good that you know it and uh I still recommend you um to check it out.
Uh three other tools that are in my opinion must have is Canali, notion and stripe. So Kennley is just uh basically to create a call booking page so your prospective customers can book a call with you. Notion is for documentation. So that's super helpful as well to write your SOPs and processes and so on. And Stripe is for credit card payments and basically billing uh which is uh awesome as well.
Okay. So uh final part mistakes to avoid. So there's I think 10 mistakes. I wrote a blog post that I will also add in the description below. But basically I'll show you the three biggest one. The first one is pricing too low which has uh two issues. The first issue is that you're going to attract the wrong type of customer which is the second mistake. Um but uh these customers are basically not going to value your service. They will churn. they will complain and you will sometimes think, "Oh, my service is bad. What should we improve?" And then it will never end. So, price your service accordingly. Uh it doesn't need to be crazy high. Uh just price it. Um look at the competition and look at how they price their service and usually it means um that it's the right uh fit for them. The second problem with pricing too low is that your margins will be super tight and you won't be able to uh invest in marketing or sales or build a team. Uh you won't be able to hire great talent and the work will also suffer as a result.
Uh the second mistake is the wrong types of clients. So I think niching down and making sure that you have a really great idea of who your ideal clients are is super important uh to fix this one because simply with the right type of customers they will be more happy and they will stay longer in your agency.
And then finally the third mistake is not delegating which is super important if you want to scale your business. Make sure u that you basically take time to write uh down the processes and delegates the work to your team.
All right that's it. Uh that was a quick overview of productiz service. It's not a comprehensive guide like I said uh at the beginning. If you have any questions, leave a comment below and maybe you can also comment productize for the algo if you enjoyed this video. And uh finally check out the book that I wrote on productize service. It's around 150 pages. It has like all of the SOPs that I've used, all of the mistakes that I've made and that I'd like you to avoid and like also way more marketing channels that I've added in this book. So yeah, thanks for watching.