Can SMEs Productise Services to Help Increase Sales?

In this post we briefly cover the difference between a product and service, what constitutes a successful service, the challenges of scaling a services business while introducing the idea of productising services to scale/grow a service business.

So, can businesses productise services to help increase sales?

The simple answer is Yes but it does require change!

However, before we get into the who, what, how, why and when etc., it is probably best to first try and simply distinguish between a product and a service and provide some examples of each so that we have a basis to work from and so that we can develop an understanding of what is involved in productising a service.

Typically a product can be viewed as something that is tangible right from the word go i.e. you can normally see it, feel it, use it and in many cases experience the quality, benefits and value of using it very quickly which can help drive the sales process forward. Consumer electronic goods are typical examples that fall easily into the ‘product’ category e.g. mobile phones, MP3 players, Games consoles etc.

Services however, are usually intangible at the onset and normally require the user to experience the delivery of the service first in order to be able to quantify the quality, benefits and value of the service. This can make it more challenging for services providers to engage with prospective clients as the service value and benefits are not usually demonstrable upfront. Most successful services depend upon providing the right mix between People, Process and Communication. In many cases, while service oriented businesses are small, these three elements are presented and offered in an ad-hoc way which can lead to inconsistencies in terms of service delivery, quality and therefore perceived/actual benefits and value delivered.

However, this is not to say that many service businesses don’t perform well even though the service delivered may be a little ad-hoc and inconsistent at times, in fact the opposite may often be true. The problems generally arise or become more visible when a service oriented business looks to expand or grow rapidly i.e. double, treble, quadruple turnover.

The challenges often occur in scaling the three key elements (i.e. People, Process and Communications) that enables the business to grow in a professional and consistent way while maintaining quality of service and delivery.

Many small service oriented businesses find they are initially successful because of a small number of key people - usually the business founder(s) - who live and breath the business and who apply a set of skills, knowledge and experience that enables them to deliver a quality of service that they had envisioned when starting the business. The problems come once the founder(s) become capacity bound and have to expand by hiring more people. I am sure many an entrepreneur has at some point thought it would be much easier to handle growth if only they could clone themselves. Alas this is not possible!

It is always going to difficult to bring on board new staff who will then be able to deliver your services in a way that your clients are used to getting from you, or is it? The key to ensuring that your service business can grow while retaining your vision, ethos and deliverables is to productise your services which will include your skills, knowledge, experience and approach to service delivery. Training is also important but without a service blueprint providing direction for your business and taking the time and effort to productise your services then you will still end up experiencing the same problems.

In part 2 we will consider what service productisation means and how it can help scale/grow a service business.