How to Productize Your Digital Agency

What is productization?

According to Investopedia:

"When something has been productized it means that it has been taken from a raw or minimally developed idea and has been turned into a standard, fully tested, packaged, supported and marketed product."

According to Cambridge:

"To make something into a product which can be sold.​"

And according to Oxford University​:

"Make or develop (a service, concept, etc.) into a product."

I personally like the one from Investopedia best. It gives a great description of what productization is as it pertains specifically to the digital agency industry. You package your services in a way that delivers value based upon the results you receive, not the amount of time you spend on the project.

Productization can be like Legos.

If you have the right legos, you can build just about anything, right? Individually, legos are all standardized, cookie-cutter, and overall not impressive. But, when you start to build with them, they can take on their own unique shapes that are customized to your own mind. Apply this same concept to your agency. Have individual products (your legos) that allow you to build custom solutions for each prospect. That way, you can standardize everything and your prospect gets a solution perfectly tailored to your needs.

Productization can also be like Automobiles.

If you've ever purchased a new car, you know that you start with a base model, then you can add on specific features, paint, interior, engines, and so on. By the time you're done with the all of the customizable options, you feel like the car you just "created" is unique to you. Now, there are probably hundreds of cars just like yours on the road, but because you hand-picked so many features of your car, it's special to you. The same exact psychology behind the sale of a customizable car should be applied to your agency's services.

Custom Requests

You will always have custom requests. In fact, the more mature your agency becomes, the more complex these requests can become. The goal of productization is not to replace custom requests. You just want to mitigate the amount of custom requests you receive, and most importantly, you want to standardize as much of the deliverables of your services as possible. If you can sculpt a core package that solves 50% of requests from your target market, your cost to deliver that service is at least 20-50% less. Most importantly, your client will receive a lot more value from what you deliver, and it took you significantly less time and energy for you to deliver it.

I highly suggest you get as much of your agency productized as possible, if you recreate your core offering to be more like "Legos" (or products), you will be 10 times more profitable and work less than you ever have.  

Productization will be the most dominant business model in the agency industry.

Every service you offer should be its own package (it can be sold, and it serves as its own standalone product). Those packages can then be attached to other packages that allow you to build custom "combo packages" for your prospects.

In an ideal world, you should strive for 100% of your sales to be just one “Lego” or product. If you can solve 80% of all custom sales requests with your Legos, you just made your agency substantially more profitable, and your work load was just cut by 30-50%.

The agencies who master this business model will dominate their niches within the next 3 – 5 years. ​

A Common Thread
Successful agencies understand the value of having a common thread from the time a prospect gets to know you from a lead magnet, all the way to becoming a paying client who sends referrals. A "common thread" means having a standardized message throughout all phases of the client lifecycle as it pertains to your specific products or your combination packages.

The lead magnet will set the tone for the first call, which will set the tone for the proposal. After that, your proposal will dictate the entire client relationship, including expectation levels, pricing, processes, eliminating competitors, up-sells, and all else going forward.

Once you close the sale, you'll then hand it over to the service department for execution. They create a project scope document (again in alignment with the common thread), change order documents, phase sign-off documents, up-sells.... everything should be dictated by the common thread.

It's impossible to establish a common thread when everything you do is custom. You won't be able to scale your agency that way. 

What's scalable is productization. When you get your services organized in a way that you can sell them as individual packages, there is less room for surprises. You (and your client) know exactly what's included in the service, you both know exactly how long it takes, and you both know exactly how much it costs.

That knowledge alone will help you maintain a manageable client load, go up on your prices, improve customer satisfaction, and help you stay in touch with your sanity. 🙂

Lee Goff

Hyper focused on serving digital agency owners grow, scale, and enjoy their digital marketing agencies. It is hard to grow a digital agency unless you have the right tools and guidance.
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