Transcription
If you're even remotely interested in the web design freelancer and agency world, then you've probably seen hundreds, if not thousands, of screenshots that look like this. And alongside them, you'll probably have someone telling you about how great running a productized service is. And as someone who's run some form of productized service for over four years now, they are pretty great, but they're not perfect. And with everyone now preaching about running a productized service, this really raises three questions: First, why do they work? Second, why do the absolute largest agencies not offer them? And third, how do you make salt and pepper chicken from scratch? I mean, third, how do you actually build a sustainable productized service?
So let's start at the beginning. Why do they actually work in the first place? Well, a productized service is really valuable because it simplifies the service industry. So instead of this weird flirting period of time you have with a client where you're trying to suss out if the client wants to work with you, they're going to figure out what your rate is, they're going to try to understand what it is that you do. And while you're going through this whole process, you're also trying to do the same for them. You're trying to figure out how much money they can afford, you're trying to figure out if you actually want to work with them, and how much you're going to quote in your proposal.
Now, what a productized service does is it really lets you skip the foreplay and get straight into doing the work. And for the right client, this is great because they can just get straight to work. A lot of them don't want to have to spend a bunch of time scoping out a project. Sometimes they don't even know what the actual full scope of the project is. So in an environment like a startup, this type of culture is absolutely huge. It also helps the company that they know exactly how much they'll be paying you every single month. There's no unexpected invoices, there's no large scope projects. They know that they're going to pay you this amount every single month, and they expect you to do the work. It also means that they are not locked into long-term contracts, which is something that a lot of large agencies do. And the other reason it could be really appealing to certain companies is that they can hire top-rate talent, and it doesn't take them very long to hire them, and it's also cheaper than hiring someone in-house.
And for the person actually providing the service, it's great because you can build consistent monthly recurring income. You don't have to do custom quotes, you don't have to spend loads of time scoping out projects and negotiating on prices and going back and forth and changing those tiny little line items in your deliverables. But the other thing here is that it's actually easier to market this. Now, if you think about a productized service, you think about marketing one specific thing because you're packaging everything up and selling one product. Whereas if you're selling a typical service, the chances are that it's completely undefined. You could offer so many custom solutions that what you have to do is you have to market kind of a bit of everything. You have to kind of say, "Yeah, I do that. I can do this. I can do a bit of everything." But if you are just marketing a productized service, it becomes a lot easier because you're just pushing the same thing over and over again. And then when you actually work with the client, that's when you're kind of defining the work that you're doing with them.
Now, there are plenty of drawbacks on both sides, and I'll touch on these a little bit later when I tell you exactly how I run a productized service business. But first, let's explore why the absolute largest agencies do not provide productized services. Now, as much as the midwit want to cry about how services like Designjoy are scamming or they're faking numbers, they are in fact real and they're achievable. But there's a reason that large agencies don't follow this model, and that reason is that they can actually charge way more money by providing custom offers to their clients.
Now, if you think about it, if you're selling a productized service, you could sell that to a tiny startup or you could sell it to Amazon. You'd be charging them exactly the same price. Maybe you had a few different tiers, so maybe it would be incrementally a little bit more, but the chances are you wouldn't be charging a nerf. If you think about offering a service to someone like Amazon, why would you charge them the exact same amount you would charge to a tiny startup? And why would you try to sell them the same solution as everyone else? You could easily charge someone like Amazon five times what you could charge anyone else. And when you add in the unknown capacity of a productized service, when people say that you can add unlimited requests but they're going to work on one request at a time, it's like, how are you meant to know how many requests are going to actually be completed? How long things are going to take? Like, what the actual output is? Large companies do not want this. People making the decisions in these large companies, they want a tailored, custom solution, and they're happy to pay more money for that custom solution because they can then make the decision and know that making this decision to work with this custom offer agency is not going to get them fired.
Now, of course, a productized service can actually scale really nicely into a few million P, but it's very hard to reach past this point. So you can see why the absolute largest agencies don't follow this model. Now, for most of us, the reality is that we're not working with clients like Amazon. We might be working with smaller companies, with startups, with growing companies. So what's great about productized service is that it can still scale to millions per year, and a lot of us are not looking to go past this point because running a large agency isn't something that appeals to us. But when you look in the larger landscape of agencies, you can see why they don't follow the productized service model because why would they build the same to absolutely everyone? Now, a lot of them will have subscriptions set up, so they will have a Stripe subscription that looks like a productized service, but they're not marketing it to everyone.
But if you're not looking to build an absolutely huge agency and you just want to know how to build a sustainable productized service, then I'm just going to walk you through exactly what I've learned in the last four and a bit, five years and cover everything that we do to charge high-ticket retainers to clients, and those clients are happy to pay for it. So first of all, let's jump into some context. Most productized services fall into the trap of productized services because what happens when you run a productized service in the traditional model is that you end up constantly context switching. You spend half your time figuring out exactly what it is that you should be doing because if you think that you have a load of different clients and all these different clients want you to do a specific task at that time, what ends up happening is you spend half your time just figuring out what the most important thing to do that day is and then what it is you should be focused on. And if you know anything about productivity, you know that this is a really bad way to operate. And what this typical model does is it rewards getting the low-impact, high-urgency tasks done. So there is no planning ahead, and everything is just, "I need to do this thing ASAP," and it's a really small update that we don't think about in the larger scheme of designing and building a website.
But one of the worst things about running a company like this is it's almost impossible for you to plan your workload because if you think on a Monday, you have no idea what you're going to be doing on a Thursday. So it's very difficult to plan your week out in advance. It's also really, really difficult to actually take any form of holiday unless you have other people doing the work for you. And honestly, one of the worst parts of this, and this is something that I offered for quite a while, is that clients just don't know what to expect. They don't know when the work is actually going to come in. They don't have any sort of consistency in terms of when it is that you'll communicate with them. There is just nothing that they can expect from your workload.
So instead, we've taken a different approach to the productized service and essentially turned it into a retainer productized service. And with this, what we do is we work with startups and marketing teams. So most of the time, these companies are growing. Most of the time, they will have a large marketing team, let's say at least five people. And with them, what we do is we consistently make updates, run campaigns, do testing, optimize for conversion rate. And most of the time, these types of companies really value brand. So they value good design, they value actually doing things properly.
Now, the reason that these teams will outsource to us versus doing it in-house is that they have this internal struggle where they typically have a product design team, they'll have a product development team, and then they'll have a marketing team. Now, the biggest problem that the marketing team have is that every time they want to make an update to the website, they'll have to ask the product team. But the product team is so busy building the product that there is no one to actually make these changes for them. And often, the marketing team's not big enough to warrant someone to work on this full-time. So instead, they're kind of in this limbo where they're either waiting for someone else to do the change, or they have to go in and try and make these changes themselves.
So what we essentially become is an extension on their marketing team. And this solves a lot of problems for them because as soon as a marketing team want to run a new campaign, as soon as they want to do something, they know they have the capacity to do that. So essentially, what it is that we run is a productized retainer. And a productized retainer is a really good model to build your business from because what you're doing is you're figuring out what the workload actually is with that client, whether that's one day a week, two days a week, whatever that amount of work that they need is. You're then delivering that amount of work to them, and you're working with them consistently over a long period of time.
Now, let's just jump into exactly how our internal system works. So in terms of onboarding, what we'll do is we'll typically have a sales call. Then, when the company signs up, they'll get an email confirmation, which is something we just recently set up. Then, internally, we need to set things up. We need to figure out what day of the week it is that we're going to be working with that client, or if it's multiple days a week. Then we have our internal team assigned to this. So the way that we work is we have a designer, a developer, and then a role called a project lead. A project lead is someone who can do both design and development, they can do the quality assurance, and they can also communicate and kind of manage the project with the client. Essentially, what we have is a team of three people working on any one client's account. Then, what's going to happen is we'll get everything set up, and the project lead is going to intro the client, explain the system that we use, and invite everyone to all the different accounts. So what we have is ClickUp for task management, then we have a shared Google Drive, then we have a shared Slack. Inside of that Slack, everything is pinned, so people know exactly where these different resources are whenever they need them. And then, once we've got everything onboarded and everyone knows exactly what it is that they're doing, it's time to get to work.
Now, the way that the work actually happens is we just have a super simple system inside of ClickUp. Inside of here, we have a backlog, this week, current request, awaiting feedback, and complete. Now, the client adds tasks to the backlog. Now, they can do this either through the form or they can do it manually inside of ClickUp themselves. Then the project lead will go back and forth with the client inside of Slack and just determine what it is that they want to get done this week, what the highest priority things are. Inside of the task management system, we also have priority and we have size of task inside of there as custom statuses. That way, we can see the overall workload, and the backlog is really a place for us to start planning what it is that we're going to execute on over the next few weeks and next few months.
So once the client has added the task into the backlog, maybe they've assigned a priority, a due date if it is needed, and maybe they've estimated the size of the task, but they don't always have to do this. The project lead will then pick up the task. They will move it into this week based on what it is that we're going to be working on for this week. They'll go back and forth with the client just to make sure they have the priorities straight and they know exactly what it is that we want to be doing. Then, what we're going to do on the active work day is we're going to go and work through each of those tasks one by one.
So with a typical productized service, the biggest thing that they do, and probably the worst thing they do for a client but the best thing they do for themselves, is that they only work on one task at a time, and then they will move that task across to like, for review from the client, and then they won't work on anything else. So what happens is you have this really slow process where maybe they'll do a little bit of work, send it for review, and then the person will have to come back, and then they'll do that again. And that's how people run these productized service businesses. And sure, it does work, and a lot of clients do still find that valuable. But ultimately, what happens is you just don't complete that much work because all they're doing is a little bit of work and then sending it over.
So instead, what we do is we try to have a kind of full day of work. And what we'll do is we'll work through every single one in terms of priority. Once we worked on a specific task, let's say it's a designer designing something, they'll then send it over to the project lead. The project lead will do any form of QA, so quality assurance. If there's any revisions, we'll just go back and forth with the designer on those revisions. The project lead is then going to go and update that task inside of ClickUp. They're then going to message the client inside of Slack and just say, "Hey, like, here is the update." Now, often what we'll do is we'll work through all the different updates for that day and then send one condensed Slack message with all the different things that they need to do. After that, if any revisions are needed, we'll then just make sure we're doing that inside of markup if it's for the website, and Figma if it's a design change. And then that cycle just repeats again for the next week. The project lead is just going to assign which tasks is going to be done that week, and then we're going to communicate with the client on the priority, and we're going to go through this whole process again and again.
Now, that is literally everything we do in terms of our internal productized service retainer. As I mentioned, I've been running some variation of this for over four years now, from freelancer to running a studio. And for me, this is by far the best iteration of this whole productized service model. Sure, it doesn't seem quite as appealing as the idea of giving them unlimited requests and working on one at a time and working for them at all times, but then also not working for them at all times. But ultimately, this just means that the client is happy, and we're happy, and we know exactly the amount of work that we're going to be doing each week. As I mentioned, the ability to actually batch your work is way more valuable than just a scattered approach where you just do these tiny little tasks here and there and never spend a huge amount of time on one specific thing.
If you have experienced running a productized service, I'd love to know exactly how you operate your service because this kind of thing is absolutely fascinating to me. And there are so many different variations as to how you can do this. But these smallest little tweaks make all the difference in terms of if you're happy internally working on that thing and you can do that for a long period of time, and also what the client's expecting and what the client is getting, and ultimately if they're actually happy with your service. As always, thank you very much for watching, and I'll catch you in the next one.