Productization and Servitization for B2B Tech – ep 50

We’ve all heard of the word productization floating around in the B2B SaaS world, but have you heard of servitization? Well, probably not, since it’s not half as popular as productization. The concept of “productization” allures business owners, because the common assumption is that scaling the business requires stepping out of the servicing, consultancy role. And this, right here, is where most of them miss a massive opportunity. What do they mean, and why should you pay attention?

Working with both, high ACV service and software/SaaS companies has given us a ton of insight into what works and what doesn’t when it comes to selling. Today, we’re sharing some of these wisdom nuggets with you.

The first step is to not market the product/service as-is, but instead add a spin to the offer. Service companies have already figured out that in order to solve the challenge of selling a $500k project, they need to get their foot-in-the-door first through a smaller project, and then expand. What tends to work in these scenarios, is to productize the offer as much as possible, without overdoing it. A straightforward offer with a reasonable price and a plan laid out is the way to go.

Where companies go wrong is by pushing themselves in a box that can’t fit them, for example, a service company trying to advertise themselves as a “solution” will lose out on clients looking for a customized service, AND clients that want a plug and play platform. Your offer should always appeal to your ideal buyer, but it shouldn’t be positioned in a way that can disappoint them down the line.

On the other hand, theoretically scaling a SaaS business seems pretty uncomplicated. And for obvious reasons, SaaS founders do not want to engage in 1:1, frequent conversations with customers because the common belief is that this ultimately affects growth. But for SaaS platforms with high ACVs, selling the product with a service might just be a better idea.

The key here is to not just onboard them or help them launch, but to go above & beyond and provide more value. This may scare off SaaS founders, as switching from a product to a product + service offering can be daunting, but sometimes, bundling your offering the right way can help you sell much faster.

We’re experimenting on this with our clients too, and we’re seen some interesting results. Maybe it’s time you tested this on a small market segment yourself too?

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