Productizing over time

Productizing over time

Today, more than ever, customers want the same quality services at a lower price. Customers no longer accept time-based billing with products and services that are exclusively priced by the hour or minute. They demand value. They demand value in time, money and outcome. That’s why more businesses are moving to productized services as opposed to time-based billing practices. Read on to know more about productized services, why they’re better than time-based billing and how you can adopt them in your business.

What is a Productized Service?

A productized service is a combination of various products and services that is priced as a single unit. In other words, if you offer a productized service, you charge a single price for an offering that packages together different types of services. The aim behind productizing your services is to offer customers one price for all the associated services up front. This makes it easier for customers to make the decision to purchase your services because they know exactly how much they will spend. With time-based billing, on the other hand, you charge customers by the hour or minute depending on how long it takes to complete the work. While this was a standard practice in the past, it’s not as common today as products offer customers better value.

Why are productized services better than time-based billing?

Customers Know What They Are Paying For

When a business charges hourly rates for a service, the customer doesn’t have a clear picture of how much they will end up paying. When there is no fixed price, customers are often faced with a bill that is higher than expected due to unforeseen circumstances.

Customers are more Likely to Purchase

Because customers know exactly how much they will have to pay for a service, they are more likely to purchase that service as opposed to an hourly one.

It is Easier to Estimate Costs

Providing services on a productized basis is easier to estimate than on an hourly basis. This is because you know ahead of time how many hours it will take to complete the project, which makes it easier to predict how much it will cost.

How to Move from Time-Based Billing to Productized Services?

If you’re thinking of transitioning from time-based billing to productized services, here are a few things to keep in mind:

Identify services that are tied together

Look for services that are tied together and can be packaged as a single unit. For example, if you run a law firm and you specialize in family law, you can package your services as a single unit. This means that you will charge the same price for every family law service you offer to clients consistently.

Identify services that are frequently purchased together

Look for services that are frequently purchased together and can be packaged as a single unit. For example, law firms that specialize in family law can package services as a single unit, as can law firms that specialize in bankruptcy, but it likely doesn't make sense to offer both services to the same clients. Specializing, don't generalize.

Look for services that have a high value to your customers

When you’re productizing your services, look for services that have a high value to your customers. This way, you can charge a higher price for your packaged service. You can also increase your profit margins by increasing the price of the packaged service while keeping the individual services at the same price.

Put together your new service offerings

After you’ve identified the services that can be packaged together, put together your new service offerings. You may decide to call these services “packages” or “combos.”

3 Things to Consider When Transitioning to Productized Services

Consider your business goals

Are you trying to increase your profit margins? Do you want to make it easier for customers to make purchasing decisions? Do you want to reduce the time it takes to close deals? When you’re considering productizing your services, you should keep your business goals in mind. This will help you determine which services you should package together and which ones you should leave as individual offerings.

Know your customers

Customers are different, and they want different things. Some customers want the best deal, while others want the best quality. Some customers want the perfect combination of both. It’s your job to understand what your customers want so you can provide them with the best possible experience. Once you know your customers, you can offer them the best possible package.

Know your competitors

If you’re not already, start keeping tabs on your competitors. Look for businesses that offer a broad range of services and that can package their services together. Start keeping tabs on the services they offer, and make a note of which ones you think you can compete with.


Productized services are better than time-based billing for a number of reasons. With productized services, customers know exactly what they are paying for, they are more likely to buy, and it’s easier to estimate costs. Additionally, productized services make it easier to transition from hourly billing.


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