Over the last decade I’ve gone from cautioning against the trend toward the productization of services, to neutral on it, to my current position that most of you better hurry up and get there quickly.

The need for productization today is driven by the reduction in time and labor allowed by AI. “Thinking” should never be sold by the hour, and “doing” is increasingly accomplished by robots, thereby destroying labor-based pricing models.

Two Productization Caveats

My earlier concern with productization was driven by two things. First, productization (what I called “standardized delivery” in The Four Conversations) tends to go hand-in-hand with standardized pricing, which means pricing the product instead of pricing the client. This removes the ability to leverage “willingness to pay” which differs from client to client primarily based on the value being created.

The most lucrative business models for professional firms appear to be a combination of standardized delivery (productized services) and customized pricing (price the client).

So as you move to discreetly packaged services it’s generally wise to reserve the right to charge different prices based on the value being created. There are different ways to do this (that I won’t cover here).

My second concern with productized services is what it does to the salesperson: it makes them lazy. I see this everywhere, including in myself. With only so many products to sell, the salesperson listens only long enough to match the client’s need to their product. Then it becomes all about them and their product.

The solution to this laziness is Value Conversation mastery. The Value Conversation keeps everyone’s focus where it should be: on the client, what they want, the value that might be created for them. When you productize you will be tempted to skip or truncate the Value Conversation. 

Do so at your peril.

With these two caveats in mind, it’s probably time to productize.

-Blair