What Is Productization?


The process of creating a product does not have to be the creation of a physical product. It can be as simple as the acquisition of a capability or intellectual capital knowledge and making it into an item or service that you can sell to clients. The clients could be in the same field or a completely different one.

Services could be made into products or packaged and sold as physical goods. For instance, a marketer might create an “how-to” book for new entrepreneurs that teaches the business owner how to promote their business or a web designer might make a webinar series on the best ways to design websites. Productivity is one of the most important strategies for establishing and managing an enterprise that is based on services.

Productization of a Service

Products and services may also be packaged up and offered in subscription services. Individuals who are freelancers and entrepreneurs could earn a living through providing services like writing or business management. Their expertise could be turned into a class that teaches how to write a business strategy. In simple terms, productization is an offshoot of the expertise, equipment or the systems required for running the primary business.

It also entails packaging a solution to the customer and incorporating it into an everyday product in order to see profits improved. For example an expert who provides one-on-one consultations can turn the knowledge they use every day into a DIY-kit, and then market the product. The process of productization means that each client will receive the same service or product. This means that greater products could be offered using less time or investment in resources, thereby increasing profitability.

Productize: Tips for Starting a Service-Based Businesses

Many services are able to be packaged into an enterprise, which can be scaled, delegated and automated to produce a long-lasting, steady revenue stream. In establishing a productization plan the product has to solve the issue that customers have to deal with on a regular basis. The product must be something customers would purchase on a monthly basis.

Making the terms of business involves defining the conditions for the manner in which services are provided while keeping the workload at a level that is sustainable. For instance freelancers or consultants could provide services on a one-to-1 basis, and thus only have a small amount of time to make a living. Productization provides a consistent method of generating, distributing and dispersing the creative or intellectual capital that is available to clients currently. The aim is to use internal knowledge and put it into a package so that it generates an additional income without a lot of extra cost or time. This can be accomplished through sales increases.

Examples of Productization

A bank could have an internal payment system that allows it to transfer money between branches across the U.S. The bank decides to develop the capability as an online payment system and provide it to regional, smaller banks at a cost.

An automaker might provide engineering and design advisory services to companies that manufacture in different industries.

A company that owns its own logistics like trucks in its fleet or rail access could provide logistical services to other businesses to ship their goods for a cost.

A bookstore chain may lease their facilities to organize occasions for different industries using the space for retail when retail stores are not operational.

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