In today's episode, Rob dives deep into the over-servicing epidemic that plagues many agencies. We all want to please our clients, but at what cost?
Rob discusses the hidden costs of over-servicing, shares strategies for establishing better boundaries, and offers ideas on how to refocus on high-value work to accelerate agency growth.
Over-servicing can drain resources, lower margins, and create disconnects between busyness and profitability.
Join Rob as he explores how to push back without losing clients and maintain your margin goals.
So grab your headphones and get ready to learn valuable tips on managing over-servicing in this value-packed episode of The Agency Accelerator!
Topics Covered In This Episode:
[00:00] introduction: Exploring the hidden costs of over servicing clients.
[02:40] A definition of over-servicing
[03:50] The fear of saying NO
[05:03] what is an acceptable level of over-servicing?
[06:11] A different way of looking at over-servicing
[06:50] The hidden costs of over-servicing
[08:30] Tips on how to stop over-servicing
[10:26] Five ways to say ‘yes’ or ‘no’ to a client request
[11:30] Tips in changing your over-service levels
“None of us want to be busy fools: working super hard to keep clients happy no matter what it takes.” — Rob Da Costa
"Make sure you find the right clients in the first place... that fit your ideal target customer avatar... understands and values the work that you do, understands their part in the whole process and is willing to pay a fair fee.” — Rob Da Costa
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Rob Da Costa [00:00:00]:
None of us want to be busy, fools working super hard to keep clients happy no matter what it takes. So in today's podcast, I want to explore the hidden costs of over-servicing clients, and how to share some strategies to establishing better boundaries. And most importantly, gives you some ideas on how to shift your focus back to high-value work that will accelerate the growth of your agency, give you a smoother journey, and remove of the stress that so many of us face because we are over-servicing. Now I want to record this podcast because I've seen so many agencies get stuck in that reactionary spending too much time on non-contracted extras that drain resources quickly. And it becomes really difficult to get off this over-servicing hamster wheel of doom. Now I recently carried out a poll with my audience asking them how much they over-service clients, and perhaps you're not gonna be surprised to know that the majority of people were in the 20 to 40 percent of over-servicing. And of course, when we're heading towards 40% of our time given away for free, then we are in danger of being very unprofitable being very unhappy, stressed, and working long hours to earn a meagre amount of money. So none of us wants to be in space, I wanna help you pull that back to a more manageable level of over-servicing, which I'll go into in the episode.
Rob Da Costa [00:01:26]:
So another super value-packed episode, and let's get going. I'm Rob Acosta, and this is the agency accelerator podcast. As someone who has stood in your shoes, having started grown and sold my own agency, and I just how it feels in the ups and downs of agency life. So this podcast aims to ease your journey just a little by sharing mine and my guests' experiences and advice as you navigate your way to growing it profitable, sustainable, and enjoyable business. This week, I have my latest agency accelerator live workshop, which is a 45-minute value-packed work shop that we run every second Wednesday of the month. And this week, our focus was on over-servicing, and it was one of the most attended workshops I have had with lots of really interesting discussions. So I thought I would record a podcast on the same topic. If you're interested in seeing future workshops and future topics for agency-to-live workshops, then head over to dacostacoching.co.ukforward/agencyacceleratorlive, and you'll see all the details and themes for our next workshops, and I'd love to see you there.
Rob Da Costa [00:02:35]:
So let's kick this off by giving a bit of a definition to what is over-servicing. So basically, it's when agencies provide services beyond the core contractual work without asking for any additional compensation. So some common examples of this could be doing some of the work that the client should be doing. It could be turning things around much quicker than you kind of agreed, or it could be the fact that you just seem to give them unlimited revisions. And of course, it can also be when they say, can you just do this? And in their mind, that additional task, which is outside of the scope of work, will take you 20 minutes but in reality, it takes 2 hours. And of course, can you just quickly add up? And before you know it, you are over-servicing by 2030 or 40% Now this happens for a few key reasons. Obviously, we wanna be helpful for our clients. Of course, we want to say yes.
Rob Da Costa [00:03:31]:
Of course, we want to impress them and go the extra mile. And I think, especially in a challenging economy, we believe this is the best way of keeping a client, but in reality, it creates unrealistic presidents that become really difficult to maintain because, of course, you have other clients as well. And of course, the second thing is that we fear saying no, especially more junior people in an agency. We fear that if we say no, the client will be unhappy, and it will damage that relationship but of course, often politeness and pushing back in and polite way can overcome this. And third, and perhaps the main reason why this happens is because we haven't spent enough time at the beginning of a relationship defining the scope of work and getting really clear boundaries in place So that means obviously saying what's included and what's not included, but it also means outlining the service levels that you have with a client. So if you're listening to this podcast now and suddenly you see an email pinging up in the corner of your screen and it's from a client so you think, oh, answer that now, then you're sort of setting a precedent that you will always answer their emails immediately. And, of course, in future, when you can't answer their email immediately because you're with another client, then they are disappointed. So this all basically sets up expectation levels.
Rob Da Costa [00:05:00]:
So what is acceptable in terms of over-servicing? Well, I think sort of 10 to 15% is acceptable because in 1 month, you might over-service by 10 to 15%, and you can probably claw that back in another month. And at the end of the day, we don't have to be jobsworths. So we want to be able to help be helpful to our clients, but you can see from those poll stats that I shared initially that most agencies seem to be in the 20 to 40% over-servicing. So that's quite a lot more than 10 to 15%. So we need to tackle that. And, of course, another big issue of over-servicing is that it drains your resources really quickly. You're spending time on no-value or low-value projects, which are gonna lower your margin, and it's gonna create a disconnect between how busy you are and how much profit your agency is focused on. And of course, if you're spending time on free work, then that's time you could be spending on paid work.
Rob Da Costa [00:05:59]:
Work. So let's just dig into this a bit more. And I want to sort of reframe the concept of over-servicing in a more negative language. So if you change the language from over-servicing to write off as soon as you make that shift in your head internally, it becomes a whole other conversation because at the end of the day, over-servicing sounds like something that's really good and helpful whereas write off sounds like something financial and bad. So we need to kind of change that language. And once we start changing that language, we can start to change our mindset. So if we've got a whatever it takes kind of mindset to over servicing, then may well feel beneficial at the moment after all you're gonna keep the client happy, but it carries many hidden costs that will compromise you and your agency's success. So first of all, the sheer time and effort it takes to spend on low-value or free non-contract did work, distracts you from doing higher paid, core deliverable work for other clients, or indeed, focusing on winning other clients to fill your capacity with profitable work.
Rob Da Costa [00:07:08]:
And, of course, this creates pressure on everybody in the agency because everybody's load gets bigger, yet the profits aren't coming in, and the income isn't rising proportionally to how busy everybody is. And next, over-servicing makes it much harder for you to raise your prices because let's face it if a client gets accustomed to these free extras from you, then why on earth would they ever want to pay for it in the future? So it becomes very difficult, almost impossible for you to have a price rise conversation. And of course, the overall impact on your margin and the morale of the agency basically makes it tough to grow. And as I said, there's a disconnect between how busy everybody is in the sea and how much money is coming in the door. Now, the issue with over-surfacing often starts with both us and particularly with the client not being clear as to what a standard service is, I. E. Something that is included in the fee that they're paying for you, and what is an extra, I.
Rob Da Costa [00:08:07]:
E. A task that's beyond the scope of work. So it's super clear that not only are you clear about when you're doing an extra, but you're articulating that to the client as well. So they understand that on this occasion, you're doing this for free, but in the future, you may well charge them for it. So let's just dig into some thoughts around how to stop over-servicing. So first of all, and probably most importantly, you need to make sure that you are setting really clear scopes of work and boundaries up front with your clients. So you wanna specify exactly what is included in a project, and you want to make sure that your client agrees and signs up to this, but also so do your team members so that they don't just jump when the client asks them to. And you also want to make sure you're really clear about your service levels.
Rob Da Costa [00:08:58]:
So for example, don't always reply to clients immediately if your agreed response time is half a day. Because if you already reply immediately, then when you don't, because you can't, then the client's disappointed. So you wanna get clear boundaries around the scope of work and also the service levels. Secondly, you want to politely redirect requests that are outside of the scope of work. So you might say this piece of work falls outside of our current agreement but I'm happy to do it for an additional field. I'm happy to quote you for the additional work. Thirdly, you want to educate your clients on what is their responsibility. So you also want to be clear about what you will and you won't handle, you know, you need to remember that this is a partnership, not an imbalanced customer supply relationship.
Rob Da Costa [00:09:44]:
And a partnership means that they have to do their side of things in a timely manner as well as expecting you to. 4thly, I think you need to regularly remind your clients about the scope of work in your monthly reports and your monthly meetings. And then just revisit this and the boundaries periodically, especially if you're starting to see them get a bit blurred. And then the next thing is that you want to learn how to diplomatically push back and say no. Now I think most of us think there are only 2 arms as when a client says, can you just do this extra thing? And we always think the answer is yes, we can. Or, reluctantly, no, we can't. But the reality is that there are 5 ways of pushing back to a client and 5 ways of responding. So you can say, yes, we can do that.
Rob Da Costa [00:10:32]:
You can say yes, we can do that, but not until this date. You can say yes, we can do that, but we need to swap something else out that we had agreed was in the scope of work. You can say, yes, we can do that, and this will cost you this much money. And of course, lastly, you can say, no, we can't do that. Now there's a 6 one here, really, which is where you could say we could help you get that done, but we need to outsource it to a partner. So make sure you understand these 5 or 6 ways of responding And so does your team so that you're not always immediately saying yes to a client's demand, but actually considering it before you respond. Okay. So let's sort of wrap this up by talking about some tips around making this shift so that you can move away from that sort of 30, 40% over servicing back down to a more manageable 10 to 15%.
Rob Da Costa [00:11:18]:
So the first one is really, really intrinsic in all of this, and that is to make sure that you find the right clients in the first place. We all know that when we find a client that isn't in our core niche and maybe doesn't fit our ideal target customer avatar, they are really difficult to serve. They don't really understand us. We don't really understand them. And in order to do a decent job of keeping them happy, you invariably end up massively over-servicing them. And it creates all the stress in the agency as I've already talked about. So this starts off by making sure that you are really selective about finding your ideal target customer who not only fits in your niche but also understands and values the work that you're gonna do for them and understands their part in the whole process and is willing to pay a fair fee. These are your ideal target clients, and it doesn't matter about anything else.
Rob Da Costa [00:12:09]:
If you get that bit wrong, everything else I've talked about today, just won't work. 2nd of all, be really selective and conscious about when you decide to go above and beyond the contracted work. Determine what extras what freebies you're gonna do, whether they are truly adding value for the client, or you're just rescuing them because they haven't done their part of the deal. And then get the conversation internally about write-off rather than over-servicing and make it clear to your clients that when you do an extra for free, a, it's seen as an extra in their mind, and b, they understand therefore that you may well charge them to do that same thing in the future. Then 3rd, diligently track your time that you're spending on non-contracted extras. If you start to quantify how much of your capacity is being drained by this, It will really help you keep a handle on it and give you black-and-white indications of how much time you're spending over-servicing. And of course, when it reaches more than 15% for a client, you need to do something about it. Number 4 is to develop a referral or a partnership network of other specialists that you can handle requests to that are outside of your core scope, but nevertheless, you're keeping it in your network, which means you're protecting your clients.
Rob Da Costa [00:13:24]:
And finally, apply those five ways I said of saying yes or no to a piece of work. And also, you might wanna consider developing a sort of premium price service with additional fees, for example, for faster turnaround, I had to renew my passport this week. So I had to send my old passport back, and I sent it signed for and guaranteed delivery in order to be sure that it got there quickly, and I knew that it had got there. And of course, I had to pay quite a lot more for that expedited guaranteed service than I did if I sent it 2nd class. And so consider applying the same thing to your business. Now, if you make all these small shifts, both in terms of practical ideas, but also in terms of changing your mindset and getting this common language in your agency, then you're gonna be able to focus on high-value work with clients that respect you, and you're gonna be able to manage your over-servicing, which ultimately means you're gonna be able to drive growth within your agency whilst also maintaining really strong, respectful relationships with your clients. So there's a lot I've covered in the 8th episode, and I hope it's giving you some food for thought and do make sure you've signed up for the next agency accelerator live. The link is gonna be in the show notes And of course, if you enjoyed today's episode, please make sure you've hit the subscribe button, and please do consider leaving a review on Apple Podcasts.
Rob Da Costa [00:14:46]:
Because that helps the algorithm show the podcast to more people, and it means I can help more people. And obviously, I love hearing from you guys well. So please do leave a review. But other than that, I will see you next Thursday for the next episode of the agency accelerated podcast.