We’ve all been raised up in business to always over-deliver at all costs. To, as Jim Rohn always said: “Do more than what you’re getting paid for.” This is great advice for eager career-ladder-climbers to use. However, not so much for a service brand looking to increase profits.
When you over-service your customers, it leads to nothing good for either of you.
1. When you over-service, you’re actually giving away your profits to clients
Not to be glossed over, one of the worst things you can do to damage the future growth of your brand is to do way more than what you’re getting paid for. This literally squeezes desperately needed profits from the company bank account, robbing you of growth funds and eventually causing the company to close its doors.
Consider what that lack of revenue is doing to the company:
- Less money to update to more efficient equipment such as office and mobile electronics, furniture, software, tools, vehicles, and more.
- Less available funds to hire the best talent money can buy and provide higher valued services.
- Less money available to spend on marketing that reaches more profitable markets.
Service businesses grow by reinvesting their profits in things that make processes more seamless. When you’re not getting paid what you’re worth, you’re not going to grow at the same rate as competitors who place a more accurate value on their time and services.
2. Over-servicing leads to more employee stress, lack of drive (Eg., “Oh man, I have to take on another client?”), and higher turnover rates
Every service business is run differently. It doesn’t matter if everyone works cohesively as a team, or if each employee is responsible for servicing individual clients; stress levels are at their highest when an employee has to do so much for a client that they never have enough time in the day to get everything done.
If they never have enough time to fulfill the service expectations you’ve placed on them, they’ll become unhappy and unmotivated. A few will put up with this forever, most will move on and look for greener pastures as quick as possible.
3. Over-delivering leaves management pulling their hair out, potentially passing even more stress on to team members
If you have good project management in place, those running the team will have their hands way more full than they need to be. The more your company has to take on, the more stress to clear the queue and move on. This problem usually leads to unnecessary stress on all team members and the proverbial whip gets cracked more and more often.
4. The dangerous practise of over-servicing leads to unattainable and/or impractical expectations from clients
When you over-deliver all the time, the client will likely assume that you charge way more than your time is worth, and compensate by doing way more than you promised. Thus leading them to believe that asking for more and more in exchange for the same fee is more than likely justified.
This reality is especially true in B2B where managers are constantly analyzing the services provided to them, and crunching numbers to determine if they’re getting the best bang for buck, and always thinking of ways to squeeze more value out of their service vendors.
5. When a client has been over-serviced for so long, they become conditioned to that low price point
Consider what will happen when market conditions (and your bills) force you to charge what you and your employee’s time is actually worth. Suddenly raising the price point of your service will usually cause most clients to mentally devalue those services when the price-point changes drastically.
This undervaluing mindset will lead them to go elsewhere in search of those previous pricing levels, causing them to accept poorer service levels from someone else when they can’t find them. In essence, by over-servicing them, you end up doing the client a disservice at the end of the day.
There are other consequences that will pop up from over-servicing. However, the 5 listed above are definitely a good enough reason to re-examine just what you’re giving your clients, and whether what they’re giving you in return ($$$) justifies your time and helps the company attain its financial goals.
This is why service businesses constantly need to refine what they’re giving clients, and what they’re getting in exchange for their time. Over-servicing hurts you, it hurts the client and in the long run, over-servicing devalues your brand and the industry it services.