Conscious over-servicing: Why you should have an agency policy to consciously manage over-servicing

Conscious over-servicing: Why you should have an agency policy to consciously manage over-servicing

We consider ourselves professional experts.  We know we deliver what our clients need.

Because we do this for a living, we should know how to price, and manage the deliverables – right?

So why do we spend more time on over-servicing and over-delivering than we proposed in our quote? 

Do we think our client will pay us more?  Did we get our pricing wrong?  Or are we inefficient?

As a best practice agency, it is our responsibility to manage our time professionally and efficiently, like it matters – because it does. This primarily (rightly or wrongly) is how most agencies still earn their income.

Here are some of my observations:

Some over-servicing can be an investment in the future, however there are opportunity costs, and  risks, when we spend more time than we get paid for, including:

  • The client becomes accustomed to receiving a higher level of deliverable associated with the (potentially lower) fee, which ultimately sets incorrect expectations, and sets a bad precedent for the whole industry.
  • We are too busy working on non-billable work, to spend time working on new business opportunities.
  • Rather than working on delivering jobs for not enough money, it would be better to invest this time in managing qualitative and quantitative post mortems of job results, to learn how to improve.
  • We are too busy to engage in important and necessary social/communication connections and networking and building relationships with our clients, and prospects.

In short, we do ourselves, our clients, and our industry a huge disservice on many levels. Particularly when ‘over-servicing’ becomes routine.

Agencies with around 10 staff regularly record approximately $20K-$50K per month of time which is not billed. How much unbilled time, or money, do you leave on the table each month?

Multiply that figure by 12 months – is this enough of an incentive to spend time looking carefully at how you can manage your team’s time more effectively?  

We all have the same amount of time in a day, how you choose to ‘spend’ it, and how you choose to manage it – is where YOU make the difference.

Here are my tips to manage over-servicing:

  1. Don’t give away your profits. Ask clients for more, more often.  When there is ‘scope creep’: project costs need to be renegotiated.
  2. Invest 10% of over-servicing time toward client management/retention activities, rather than over-servicing a job per se. Instead of over-servicing on jobs which fade into the past, the best way to grow your business is through client retention.  So remember to say “thank you”, acknowledge magic moments, and show your clients that they are valued and important.
  3. Invest another 10% into reviewing current job progress, qualitative and financial metrics, and important end-of-job Return On Investment (ROI) and ‘success’ metrics for both parties.
  4. Perhaps if the opportunity has potential for “showcasing” our work – invest time to enter industry awards and also client industry recognised events.
  5. Invest 10% in business development activities, a core part of your business growth strategy.
  6. Invest 10% in your people – industry training, networking, and developing social connections and networking.
  7. Invest in your business tools and automation – job management solutions, benchmarks and a dashboard, which will allow you to track and monitor results. Remember you can’t manage what you can’t measure!  You ultimately need live up-to-the-minute data to manage time and stop over-servicing in its tracks.

So, my advice is: don’t default to blaming the client. Be crystal clear (and honest) about how much you over-service each month and be conscious of how you allocate and manage your most precious resource.

By taking on board even just one or two of the tips above, you can reduce over-servicing to a tolerable level, and establish a conscious and continual practice of achieving operational excellence.

Remember, something is always better than nothing. Set your financial goals and seriously monitor them. And if you would like to treat yourself to some complimentary business advice – send me a message via Intercom, or pick up the phone and call me – I’d love the opportunity to help, and a quick call might be just what you need to enhance your agency’s practices.

By | 2017-05-19T12:03:36+10:00 December 2nd, 2016|Financial tips|0 Comments

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