The dangerous game of over servicing clients......

We want to wow our clients.

Clients want to be wowed by us!

And we all know that service and client experiences is the competitive marketplace nowadays.

Clients want you to “add value” and give them more than they expected and you understand the benefit in that but when you're at the point where you know you must gain more clients to hit your targets yet you're up to your eyeballs in client work, something needs to change.

Over-servicing is great for the client but it can be a dangerous slippery slope for you as the provider and it's one that eats away at profit margins. Massively.

Over-servicing is a constant problem because clients will push for more work that takes more time, effort and resource but yet the costs the client pay aren’t reflective of that additional effort. It sets an expectation that’s unrealistic and it can lead to you and your team being stressed with ever growing things to do lists.

I see agency owners, software developers and other service providers work hard to win work from existing and new clients because they think that will increase their profits but often they’re not tackling the root cause that is over-servicing.?

Winning more work often adds to the problem rather than actually resolving it.

So here’s the reality slap…..

You are not running a charity.

You’re running a business that needs to make profit!

I know you know that. It’s obvious.

The balance though is being able to delight your clients, provide added value whilst still make a decent profit.

That’s a bit trickier to manage.

Here’s my 5 top tips to doing that.

Understand your capacity

Understand where you and your team are spending your time. What projects are taking too long and what the reasons are for that is key. When you compare your overall output with what the client is paying you then you can highlight key accounts or projects that are zapping all your profit. The importance of accurately completing timesheets has to be communicated so that you have a true understanding of what’s going on.

Get a grip on your numbers

Understand what your costs are and what your profitability margin should be. Understanding how productive your team are by understanding how much of their working time is billable will help you understand what your capacity is to generate more revenue and ultimately more profit from the work you do.

Make sure your team understand the problem

Over-servicing isn’t just a problem for agency leaders.?It’s a problem for everyone in the agency so it’s important that you explain and communicate the challenges that over-servicing presents, how this impacts agency profits and importantly what it is that your clients can expect. The more clearly that your employees understand the problem the more likely they are to protect your profits and the less likely they are to keep doing those “can you just” requests from clients.

Reset client expectations and push back

This is super important. When you’re trying to re-set a culture of over-servicing that won’t happen overnight. It’s ingrained in us that “client is king” and that “the client is always right” so when you start asking your team to push back with clients they might need additional support and it’ll feel like a really awkward thing to do. Re-setting expectations with existing clients is much more challenging. Have a candid and frank conversation with your clients to make sure their expectations don’t spiral and model and demonstrate to your team how to do this without making your client feel unloved.

Get better at managing scope of work and change requests

Managing expectations and pushing back to clients is only possible when you have clarity on what’s required. That comes down to you making sure you clearly understand what’s required and the time it’ll take to do that. You have to train your team to create a scope of work and mentor them to ask the right questions to make sure they understand the job in hand and that you’ve considered everything that’s needed. Inevitably things change, the unexpected can happen so you need to have a process to manage those changes and make sure the team are aware on how changes can impact the commercials and how they should handle those requests.

Over servicing is dangerous, really dangerous. It can impact your profits massively and reducing that over servicing will likely need a few awkward conversations with clients along the way.

Hopefully this article has given you some food for thought as well as ideas on how you can identify and prevent that slippery slope of over servicing!

Yes, the market is competitive and clients will always want more for less but you can still provide a brilliant client experience and still maintain your profit margins!

Del x