All businesses aim to deliver valuable services to their customers. However, what occurs when the desire to offer exceptional solutions leads to over-servicing? How does this impact professional service companies?

Are You Over-Servicing Your Customers? Over-servicing is not synonymous with providing outstanding performance or exceeding client expectations in terms of quality and delivery. It refers to performing tasks that extend beyond the initially agreed-upon scope of work during project discussions. The detriment of such practices lies in fostering unrealistic client expectations, consuming resources and billable hours, and ultimately jeopardizing profitability.

We've extensively discussed the significance and value that effective project management can bring to your operations. Resource management, transparent pricing, and time tracking can serve as crucial tools in combating unprofitable practices, potentially enhancing your entire company's profit margins.

Conversely, the same holds true. That's why over-servicing can pose a serious threat to your business and, if it becomes a habit, potentially ruin your practice. The reasons for its occurrence are often understandable, pointing to larger underlying issues such as dwindling client bases or management challenges.

Reasons for Over-servicing and Why It Should Be Avoided Over-servicing often occurs when a client has a limited budget, leading you to offer a smaller, more affordable project. This is entirely normal, as both parties can benefit: clients receive a service, and you gain another project. However, you might end up performing additional tasks to complete the project, which the client may refuse to pay for or lack the means to do so.

Businesses also fall into over-servicing by not charging for revisions. Once the project is finished and deliverables are submitted on time, the client may request changes if unsatisfied with some aspects. Many businesses and service providers lack a structured policy to address these situations and end up working for free on tasks beyond the initial scope of work. Revisions should be included in the contract, specifying the extent of free corrections and when billing begins. This issue affects numerous industries and professional service businesses.

These extra tasks can be critical to the project, leading to scope creep and additional work. For instance, contacting stakeholders to understand the message they want to convey might involve interviews, taking up your team's billable hours without compensation.

Sometimes, over-servicing occurs due to a genuine interest in the project or a desire to do an outstanding job. One might justify unpaid work as a valuable learning experience or an opportunity to improve skills useful for other clients. If a strong relationship with the client exists, you may want to maintain their business. However, this can be risky as it sets a precedent for future costly projects.

Over-servicing can also happen when there's not enough work to do, resulting in busywork on a project that doesn't require many hours. This time could be better spent on implementing marketing strategies to attract more clients.

How to Prevent Over-servicing To avoid over-servicing, begin with a contract. A statement of work (SOW) can help manage the project scope, your team's efforts, and the overall bottom line. The SOW should outline the work to be completed in detail, including tasks to be performed and those to be excluded. Clearly conveying your expectations as a service provider can strengthen client relationships and improve fee negotiation techniques. Clients who understand the steps and effort involved in each project phase are more likely to appreciate the time and resources required. The SOW can even be integrated into sales proposals and pitches.

Over-servicing can significantly harm your business's financial health and client relationships. Several clear indicators suggest over-servicing is occurring:

1. Revenue loss: Declining revenue is a warning sign that something is wrong, often pointing to over-servicing. This could result from not updating service fees, providing free tasks competitors charge for, offering excessive discounts, or overworking employees. Overworking not only affects the business financially but can also create a hostile work environment, decreasing productivity.

2. Unrealistic expectations: Initially, clients may be impressed by your delivery time and satisfied with your services. However, their satisfaction may wane, and the once-positive relationship may sour when you establish reasonable boundaries. Clients may become annoyed when you decline excessive requests or expect shorter delivery times. Breaking this cycle is difficult, as setting healthier project scopes and delivery times may lead clients to threaten moving to competitors or become unreasonable when discussing new projects and terms of service.

3. Impractical scheduling: The constant demand for changes and the inability to deny clients affects everyone involved. Team members dedicate time to changes outside the project scope, project managers struggle to maintain order, and time isn't allocated to other essential business tasks. Staying on schedule becomes challenging when demands continually shift.

Addressing the Problem: Solutions Overcoming over-servicing might appear straightforward on paper, but it can be difficult to implement in practice.