How Agencies Are Using Productized Service Offerings to Scale

Jul 05, 2024

In today's business landscape, it’s becoming more challenging than ever for marketing agencies to grow and remain competitive. With the rise of AI, shrinking client budgets (but rising expectations), difficulty in filling a sales pipeline, and more, the old blueprint for scaling an agency isn’t working like it used to. 

In our work with marketing, PR and digital firms, productized service offerings are one of our most effective strategies for creating a path to grow.

We’ve seen firsthand that when developed, launched, and executed strategically, these types of offerings enable agencies to leverage technology and streamline processes to maximize efficiency and profitability while providing opportunities for positioning and differentiation within the market. 

In this blog post, we will explore the concept of productized service offerings, why they are becoming crucial for modern agencies, and how to implement them effectively.

What Are Productized Service Offerings?

The Simple Definition
At its core, a productized offering is a service that utilizes technology, processes, positioning, and other strategies to create leverage and scalability for an agency. It’s a way to move beyond the traditional "time for dollars" model, offering predictable inputs and outputs, and clear, hard costs associated with delivering a service.

The agencies who get them right are able to:

  • Increase conversion rates on sales calls because their service offerings solve tangible problems and provide value that can be easily and clearly communicated 
  • Spend less on team resources for execution due to having a defined path to success
  • Experience next-level market differentiation with custom solutions for their target client-base

Key Elements of Productized Service Offerings

1. Standardization

First and foremost, productized services are highly standardized. This means they’re clearly defined (and most importantly, repeatable!) in terms of scope, deliverables, timelines, processes, key success factors, and costs. 

This level of standardization allows agencies to create consistency in their delivery of services, which in turn, ensures predictable outcomes for clients. Additionally, it allows firms to effectively train team members on execution–oftentimes leveraging more junior team members vs. expensive senior consultants because the path to success is so clearly defined.

2. Predictable Inputs and Outputs

Another key element for productized services is highly predictable inputs (resources, time, technology) that drive expected outputs (deliverables, results). 

These not only create a consistent client experience but greatly reduce any variability in service quality and outcomes, too.

3. Efficiency and Scalability

Standardized processes and frameworks are also paramount to the success of any productized service offering. Tasks are streamlined, and workflows are optimized, which reduces the time and resources needed to deliver. This efficiency translates into scalability, allowing agencies to handle more clients without a proportional increase in costs or effort.

Further, a defined framework that fuels execution and/or strategy for a productized offering makes training a team far easier to get the same results again and again. 

4. Leverage Technology

Productized services frequently leverage technology to streamline workflows even further. Tech stacks can include project management tools, CRM systems for turnkey onboarding, marketing automation, AI-driven solutions, and more. 

There are a whole slew of tools coming onto the scene that automate the manual and time-intensive tasks that have gone hand-in-hand with professional services in the past. Tools like this not only enhance efficiency but also enable the delivery of high-quality services at scale.

5. Clear Value Proposition

Beyond the processes and technology required for execution, a productized service has a clear and compelling value proposition

It addresses a specific problem or need for a defined target audience. This clarity in what the service offers and who it benefits makes it easier to market, sell, and create differentiation among prospects. We’ve seen marked success from agencies using a productized service offering as the first step in a client engagement, proving a high level of value, and then expanding the value of the contract over time with additional services.

6. Defined Hard Costs

Since the processes and outcomes are standardized, the costs associated with delivering a productized service are well-defined, too. This clarity in costs helps in pricing the service appropriately and ensures profitability.

Advantages Over Traditional Services

We’re not suggesting that firms completely abandon their current services and replace them all with productized offerings. However, understanding the advantages and where they fit into the overarching customer journey for target clients and the full stack of services is where modern agencies are finding the most success on their path to scale.

Beyond Trading Time for Dollars

In traditional service models, agencies often charge clients based on team time spent on projects. This "time for dollars" model limits an agency's growth potential, as revenue is directly tied to the number of billable hours. Productized services, however, allow agencies to decouple time from revenue, meaning agencies can deliver value more efficiently, allowing them to serve more clients and generate more revenue without a corresponding increase in hours worked.

Consistency and Quality Control

With productized services, agencies can maintain higher consistency and quality control. Standardized processes mean that every client receives the same level of service, reducing the risk of errors and variations. This consistency builds trust and satisfaction among clients, leading to higher retention rates and positive word-of-mouth referrals.

Easier Sales and Marketing

To put it simply, they’re easier to market and sell. The clear definition of the service and its benefits makes it simpler to communicate the value proposition to potential clients. We’ve regularly seen this level of clarity shorten the sales cycle and increase conversion rates. Additionally, the standardized nature of the service means that marketing materials, case studies, and testimonials can be reused and repurposed, further streamlining marketing efforts.

Enhanced Profitability

By optimizing processes and leveraging technology, productized services can be delivered more cost-effectively. This efficiency enhances profitability, as agencies can deliver high-quality services at lower costs. Furthermore, the clear definition of hard costs ensures that pricing can be set at a level that maximizes margins while remaining competitive.

Why Do Productized Service Offerings Matter Now?

The current business environment presents several challenges and opportunities for agencies:

  1. Margin Pressure: Agencies face a squeeze on profit margins due to increased competition and rising costs.
  2. Technological Advancements: The rise of AI and smarter technology necessitates a more efficient use of team resources.
  3. Client Expectations: Clients demand more value for less money.
  4. Scalability Needs: Agencies aiming for growth require scalable business models to handle increased demand without proportional increases in cost.

Productized service offerings address these challenges by providing a structured approach that enhances efficiency, reduces costs, and delivers high-quality results consistently.

Who Can Benefit from Productized Service Offerings?

Nearly all agencies can benefit from productized service offerings. A few specific examples include:

  • Digital Marketing: Digital marketing agencies can benefit from streamlining SEO, PPC, and social media management services that provide clear-cut outcomes for specific audiences.
  • Creative: Creative agencies see significant success in creating processes for standardizing branding, design, and content creation.
  • PR: There are a myriad of tools making tech-enabled services far more efficient to execute; paired with the decreasing client appetite for long-term retainers, these are often good “starter packages” to build trust with clients for longer-term engagement 
  • Consulting & Strategy: Consulting firms can package strategy deliverables that require fewer hands-on hours to deliver high-quality outputs 
  • Web and app development: We’ve seen significant success for firms that dial-in processes to offer services in a condensed time frame (for example, a website in a day or a week), which clients will pay a premium for. 

How Agencies Are Using Productized Service Offerings to Scale

Agencies are integrating productized services into their broader service mix to drive initial engagements that can lead to larger projects. This approach reduces labor costs and utilizes technology and automation to enhance efficiency. By documenting processes and training junior team members, agencies can deliver high-quality services with less oversight, minimizing the need for customizations that hinder scalability.

Further, offering productized services alongside bespoke offerings can enhance the perceived value of custom solutions. Clients view bespoke services as more exclusive, which can be a powerful tool in the sales process.

In Conclusion

Productized service offerings are a powerful tool for agencies looking to scale and differentiate themselves in a competitive market. By solving specific problems with well-defined processes and leveraging technology, agencies can deliver consistent, high-quality results efficiently. With the right approach, your agency can scale effectively and thrive in the ever-evolving digital landscape.

After working with countless agencies to leverage these scalable revenue models and implementing a few of them in our own company, we’ve defined a roadmap for success. Now, we’re excited to share it with you! Introducing LEVERAGE– a masterclass for agency leaders who want to simplify their operations and supercharge their revenue with productized service offerings. Get the details and sign up here!