Productizing Agency Services: Is It the Right Time?
Let’s talk about one thing we all like: getting paid what our work is worth.
Retainers aren’t easy to win.
Pitching for free is hopefully a habit from the industry’s past.
Chasing payments is… not fun.
Most importantly, certain workflows get repeated time and time again. Then why not bundle and sell them as products?
Service productization is increasing. Agencies are packaging deliverables at fixed costs and set timelines to provide more value to clients and save time on determining project scope, resource needs, timing, and pricing.
As CEO of Huge, Mat Baxter stated for The Drum:
“The productization model is a radically different model. It’s a more stable model, it’s a more margin accretive model, it’s more generally stable for client relationship model than we’ve had in the past.”
A recent BenchPress report included pricing insights from over 600 agencies based in the UK. The most common pricing model turned out to be blended rates.
This unfortunately isn’t the best option out there for agencies because it can easily decrease profit margins when clients, for example, require more senior staff.
Standardized service packages help agencies improve capacity planning and streamline processes across their wide range of services.
A productized approach allows agencies to replicate successful offerings, serving multiple clients efficiently and effectively managing client requests.
Perhaps it time to spearhead a smarter pricing model to:
- Maximize sales
- Improve your agency’s scalability
- Improve client relationships
Do you agree that productized pricing could be a big part of the agency industry’s future? Do you think that your clients are ready to collaborate through such a model?
We’d love to hear your thoughts.
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