A Strategic Choice for Growth, Profit, and Freedom
Every service business operates under one of two fundamentally different models (or through a hybrid of the two). These models are not just operational choices—they are strategic decisions that shape the trajectory of your business. One leads to complexity, inefficiency, and stagnation. The other unlocks clarity, scalability, and exponential growth.
The first model is the customized service business, where you find yourself solving many different types of problems for many different types of clients in many different ways. It’s the default approach for most professional service firms. On the surface, it feels like the right thing to do—after all, isn’t flexibility and tailoring to client needs what sets you apart? But in reality, this approach is a trap. It creates a business that is hard to scale, difficult to manage, and often unprofitable in the long run.
The second model is the standardized service business. Here, you focus on solving specific types of problems for specific types of clients through specific offerings, delivered in specific ways. This is not just a more efficient way to operate—it’s a strategic advantage that allows you to build a scalable, profitable business while delivering consistent value to your clients.
The Customization Trap: Why Most Service Businesses Struggle
Let’s start with the customized model. Imagine this scenario: A client comes to you with a unique problem, and you design a bespoke solution just for them. Then another client comes along with a completely different issue, and you create an entirely new solution for them as well. This cycle repeats over and over again.
On paper, it looks like you’re being responsive and client-focused. But behind the scenes, your business is drowning in complexity. Every new project requires reinventing the wheel—new processes, new deliverables, new pricing structures—all tailored to each individual client. Although it’s not visible to the eye, your business does have an assembly line, and you’re switching it up everything you do something in a new or different way, causing the machinery to slow down.
The result? Your time and resources are stretched thin across too many directions. Your team is constantly firefighting instead of executing repeatable processes. And because every project is unique, scaling becomes nearly impossible without proportional increases in effort and cost.
Most importantly, this model erodes your profitability. Customization drives up costs while limiting your ability to charge premium prices because your offering lacks clear differentiation in the market. You’re stuck in a cycle of working harder but not seeing proportional returns on your effort.
The Standardization Advantage: Clarity, Focus, and Scale
Now contrast this with the standardized model: solving specific types of problems for specific types of clients through specific offerings, delivered in specific ways. This approach forces you to focus—not just on what you do best but also on who you serve best.
By narrowing your scope, you unlock several powerful advantages:
1. Deep Expertise: When you solve the same type of problem repeatedly for similar clients, you develop unmatched expertise in that area. You become the go-to authority in your niche—a position that allows you to command premium pricing and attract high-value clients effortlessly.
2. Repeatable Processes: Standardization enables you to create repeatable systems and workflows that drive efficiency. Instead of reinventing the wheel for every project, your team can execute with precision and speed.
3. Scalability Without Proportional Cost Increases: Because your offerings are consistent and repeatable, scaling becomes much easier—and far more profitable. You can serve more clients without dramatically increasing costs or effort.
4. Clear Differentiation: A standardized offering makes it easier for potential clients to understand exactly what you do and why they should choose you over competitors. Your message becomes clearer, your marketing becomes more effective, and your sales process becomes smoother.
5. Stronger Client Relationships: When you specialize in solving a specific problem for a specific type of client, you’re better positioned to deliver exceptional results consistently—building trust and loyalty over time.
The Strategic Choice You Must Make
At its core, this is about strategy—choosing where to play and how to win. The customized model tries to play everywhere at once but ends up winning nowhere consistently. The standardized model focuses on a defined playing field where you can dominate with precision and expertise.
This doesn’t mean abandoning flexibility altogether or ignoring client needs—it means being intentional about where you focus your energy and resources for maximum impact.
It’s worth noting that making this shift requires courage because it involves saying “no” more often than “yes.” You’ll need to turn away clients who don’t fit your focus area or resist the temptation to chase every opportunity that comes your way.
But here’s the paradox: By narrowing your focus through standardization, you actually expand your opportunities for growth because you’re building a business that scales profitably while delivering exceptional value.
A Made Up Real-World Example (Based On Two Real Companies)
Consider two consulting firms: The 360 Agency and The Focused Firm. Both started around the same time and have grown to about 20 employees each.
The 360 Agency operates under the customized model. They pride themselves on their ability to tackle any business challenge that comes their way. One week they’re developing a market entry strategy for a tech startup, the next they’re redesigning supply chain processes for a manufacturing company. Their team of 20 is constantly juggling diverse projects, each requiring unique research, methodologies, and deliverables. While The 360 Agency’s revenue has grown over the years, their profit margins remain thin. The constant context-switching and need to develop new expertise for each project leads to long hours, high stress, and occasional quality issues. Scaling further seems daunting, as each new client requires significant ramp-up time and resources.
The Focused Firm, on the other hand, embraces the standardized model. They specialize in helping mid-sized B2B software companies optimize their customer success operations. They’ve developed a proprietary 90-day program that includes a standardized assessment, implementation roadmap, and set of tools and training modules. Their team of 20 is highly specialized, with each member playing a specific role in their well-defined process. Because they solve the same type of problem repeatedly, they’ve developed deep expertise and a track record of impressive results. The Focused Firm serves three times as many clients as The 360 Agency, with higher profit margins and more predictable cash flow. Their standardized approach allows them to onboard new team members quickly and scale their operations smoothly.
The contrast in outcomes is stark:
1. Profitability: The Focused Firm consistently achieves profit margins of 30-45%, while The 360 Agency struggles to maintain 10-20%.
2. Employee Satisfaction: The Focused Firm’s employees report higher job satisfaction due to clear roles, expertise development, and manageable workloads.The 360 Agency’s team, while enjoying the creative challenges of always “re-inventing the wheel” often feels stretched thin and stressed by the constant need to adapt to new industries and challenges.
3. Client Results: While The 360 Agency delivers solid work, The Focused Firm has become known as the go-to experts in their niche, consistently delivering exceptional results that drive significant ROI for their clients.
4. Scalability: The Focused Firm is poised for rapid growth, with plans to double in size over the next year without fear of quality degradation. The 360 Agency, however, finds that each new hire and client adds complexity to their already stretched operations.
5. Market Position: The Focused Firm has become a recognized thought leader in customer success for B2B software, attracting high-value clients through their reputation alone. The 360 Agency, while respected, struggles to differentiate itself in a sea of generalist consulting firms.
This example illustrates how the strategic choice between customization and standardization can lead to dramatically different outcomes, even for businesses of similar size and in the same industry. The standardized approach of The Focused Firm has allowed them to build a more profitable, scalable, and impactful business, positioning them for long-term success in a competitive market.
Choose The Standardized Service Businesses If You Want To Scale And Make More Profits
In today’s competitive landscape, customization feels like a badge of honor—but it’s actually an anchor holding back most service businesses from realizing their full potential.
If you are looking for a profitable, scalable business, embrace standardization—not as a limitation but as a strategic advantage that creates clarity for their team, value for their clients, and profitability for their business.
There is nothing wrong with selling customized services. There is a market for it, and many clients love it. And, you get to re-invent the wheel, over and over again. But having done it for many years myself, it led me to near burn-out.
After I built a combination of standardized products with a consulting layer (customized) at the back-end, I reached 45% in net profit margins. Most of my stress and my problems went away. That’s why I am such a strong advocate of productization, standardization, and systematization.
So ask yourself: Are you solving many different problems for many different clients in many different ways? Or are you solving specific problems for specific clients through specific offerings delivered in specific ways?
The choice is yours—but only one path leads to sustainable growth and success.
If you’re curious about learning more, or to get started with productizing and standardizing your business, check out these options and book a call with me.
All the best,
Tobias
