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We often talk about the importance of customer service to today’s discerning customers. And while it’s true that we can't overstate the value of excellent customer service, it’s also true that there’s too much of a good thing when servicing customers. It’s called “overservicing,” and it can lead to diminishing returns for bottom-line-minded companies.
In today's article, we'll break down overservicing, how it happens, why it’s harmful to agencies and the agency-client relationship, and how to prevent it from happening to you.
What is overservicing, and how does it happen?
In the competitive business landscape, attracting new business takes effort. When you can't guarantee that a client will sign on with you, it often comes down to what you can offer that your competitors can't. These incentives may include additional services at little to no cost, discounts, free support, faster response times, and other perks.
While these incentives may win you some new clients, they come at a cost.
Enter overservicing: a phenomenon where going above and beyond becomes established practice. It begins innocently enough. The client may ask if they can get a fifth draft when they only contracted you for four. You agree — since they've been such a great client so far, and you don't want to damage the relationship. But before you know it, you set unrealistic client expectations and threaten your agency's profitability.
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In addition to an overzealous approach to attracting clients, you can also fall into overservicing patterns with other bad habits, including people-pleasing, poor project management, and thin client books.
Why is overservicing harmful to agencies?
Overservicing is very common in agency work, and while the best intentions may lead to it, it’s ultimately detrimental to agencies in several ways:
Leads to a decrease in revenue
Businesses have one overarching goal: to make money. When customer service cuts into profits and depletes revenue, you’ve likely begun to overservice clients.
Increases your client churn rate
Giving people the moon and the stars works… until you stop giving it to them. Clients who are used to getting a lot for nothing aren’t going to be happy when the well runs dry. Giving them less — even if it’s exactly what they’re paying for — may send them looking elsewhere. They may even end up at a competitor agency stuck in the same vicious overservicing cycle.
Often translates to “free work”
You’re running a business, not a non-profit. But when you give clients freebies and other incentives, the result is that you’re not getting paid for your time, effort, and expertise. While you may be able to sustain this for an initial incentive period, its cumulative effect can be crippling.
Burns through your team’s resources
Your team has limited resources. Making the most of your team’s limited resources means strategically using their knowledge, talent, and skills. Overservicing often results in giving these things away indiscriminately.
Contributes to scope creep, project by project
“Project scope” refers to all the tasks, activities, and deliverables necessary to complete a project. A common cause of overservicing is underscoping, which leads to scope creep.
Scope creep happens when you change a project without acknowledging the impact on related factors like costs, budget, schedule, and resource allocation.
A common byproduct of overservicing, scope creep is a project management nightmare that’s exponentially amplified across all projects.
Beyond causing overservicing, scope creep can have many other damaging effects, including missed deadlines, loss of purpose, escalating costs, and low employee morale and well-being.
6 techniques to solve overservicing before it happens
The good news? There are some ways to stop overservicing before it bleeds your agency dry — starting with these six anti-overservicing strategies.
1) Delegate tasks and projects accordingly
One of the easiest ways to prevent overservicing is by thoroughly documenting the project requirements. What are the specific tasks and deliverables for a project, and by whom (and when) will these be completed?
While it can be time-consuming to hash out these details upfront, this is the key to defining the scope of a project which, in turn, is the key to preventing scope creep.
2) Understand your team's limits
Once you document project requirements, it’s also essential to ensure all team members understand the requirements and their roles in fulfilling them. This is as much about people knowing what to do as it is about knowing what not to do.
For example, people pleasers on your team may think they’re being helpful by agreeing to an informal change or by adjusting a deadline. However, this demonstrates a lack of understanding of the change control process and can result in scope creep, overservicing, squandered resources, and sinking profits.
3) Adjust resource schedule gaps
Proper resource management and scheduling ensures you assign project resources most effectively and efficiently. However, overservicing can follow when resource gaps occur (often due to overworked or idle resources). This is especially common in the case of idle resources when managers attempt to use them by creating extra work within existing projects. However, this is neither effective nor efficient.
Managers should proactively assess resource schedules and the project pipeline to avoid this situation. They can use this information to plan future workloads, minimize resource schedule gaps, and streamline workflow.
Tools like Teamwork’s resource management software make it easy for managers to schedule resources and adjust capacity as needed — learn more here.
4) Build a culture of communication and feedback
Communication with all stakeholders is critical for preventing overservicing. From making sure employees know their roles (and that additional work should be planned and approved) to taking a polite but firm approach with clients regarding project scope and scope creep, open lines of communication can help manage expectations, prevent misunderstandings, and cultivate satisfaction.
5) Plan projects effectively
In the first place, project management is a core component for keeping teams and projects on task and on track. It’s also an invaluable weapon in the fight against overservicing. When all tasks are clearly delineated and communicated with a single source of truth available to all stakeholders, scope creep is much less likely to occur.
Good project management can also prevent another common cause of overservicing: Missed deadlines that can lead to the faulty conclusion that throwing in something extra will mitigate the delay.
See how Teamwork can help agencies like yours plan even your more complex projects with ease.
6) Use flexible pricing models to increase agency profitability
Pricing models can also influence the likelihood of overservicing, with retainer models as the primary offender.
While retainer models do account for a defined scope of work, including not-to-exceed limits, there’s often a significant amount of variability involved from month to month and project to project. For example, during a project launch month, print, media, and social media costs can skyrocket, resulting in clients getting much more for the same price.
On the other hand, pricing models allow for variability in work to avoid giving away free billable hours and cutting into your profit margin.
Better manage your project resources and avoid overservicing with Teamwork
While customer satisfaction is always something to strive for, there are better ways to do it than overservicing clients. So, where should your focus be instead?
Easy: delivering high-quality work on time and on budget.
This is where Teamwork comes in. Our workload and resource management software support your agency by using real-time analytics, time tracking, and other features to assess the scope of work. It helps you prioritize (and re-prioritize) work, avoid bottlenecks, and make more informed decisions toward day-to-day and long-term capacity planning and forecasting.
Sign up today to put the power of Teamwork to work for your agency to prevent overservicing, protect your resources, and maximize your profits for a healthier bottom line!
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