Managing Uncertainty in a Productified Business
When you shift your solution business from a build-to-quote model to quoting predefined products, one of the biggest fears is:
What happens if a project is bigger or more complex than expected?
For example, imagine you sell a hot tub installation for a fixed price. What if the job takes three hours instead of the two you estimated in your calculator?
This fear makes many business owners stick with the old time-and-materials model:
“We sell the hot tub for $1,000, and the labor is billed based on however many hours it takes to install.”
While this feels safer, it misses some key opportunities—and keeps you stuck in a model customers increasingly dislike.
Why Product-Based Pricing Still Works (Even with Uncertainty)
1. Margins Balance Out Over Time
Even if one job takes longer than expected, most won’t. By adding a buffer (e.g., 20%) across all quotes, your margins average out over many projects, covering the risk without scaring away buyers.
2. Use Clear Small Print for Outliers
You can protect yourself by stating in the terms:
“If the project scope is significantly larger or smaller than expected, the price will be adjusted.”
You can also exclude the most uncertain aspect (like a tricky add-on) and present it as a separate estimate. This keeps the bulk of your pricing fixed and transparent.
3. Customers Prefer Transparency Over Quotes
Today’s buyers often avoid businesses that say:
“Call us for a quote.”
A clear, product-based price encourages more inquiries and conversions. Customers understand what they’re getting upfront, making them more willing to buy.
4. Productized Businesses Build Stronger Brands
By presenting your service as a product, you elevate your business:
- You look more professional than competitors still quoting ad-hoc.
- You create a brandable offering, much like how Apple sells at set prices without haggling.
- You avoid endless negotiations and “Can I get a discount?” conversations.
My Experience Making the Switch
When I transitioned my own software business from time-and-materials to productized onboarding (charging a flat €3,000 fee), the change was dramatic:
- Clients stopped hesitating because the price was clear.
- Negotiations and confusion disappeared.