Don’t Let Over-Servicing Cripple Your Agency
There is a saying that many PR agencies live by – “under promise and over deliver” – and while this often results in very happy clients it can take its toll on agency profits and staff morale. What can’t be seen is the level of over-servicing that often occurs. According to a report by PR Week and Deltek, over-servicing results in seven percent of billable time not being collected. It is no secret that this is a major issue for agencies but how can they combat this cycle?
According to the PR Week report, the impact of over-servicing is – not only does it cause financial strain for the agency as a whole, but it has people management, productivity, creativity, reputational and future-proofing implications. More than 30 percent of agencies agree that over-servicing suggests a problem with the business model, however, 26 percent are also resigned to accepting over-servicing as “part of what you have to do to manage profit and loss”. To a certain degree this is true, over-servicing will always occur but agencies should not accept it as the status quo, instead there are a number of things that can be done to combat this way of thinking.
Eliminate the problem at the source
The PR Week report states that over-servicing is often a result of process untidiness, and left unchecked it will have a detrimental impact on staff. For example, when under stress at work, 80 percent of people find it difficult to concentrate, 50 percent are potentially less patient with customers or clients and 62 percent take longer to complete tasks. Additionally, stress can lead towards reduced productivity and even increased absenteeism.
As a result, it is important for management to keep an eye on how over-servicing is impacting staff to ensure that not only is staff wellbeing high, but the agencies reputation is intact and work is delivered = on time and to a high standard.
Create change from the top
By consistently challenging procedures and culture, management teams can guide an agency out of the over-servicing cycle. All processes and guidelines should be based on commercially driven outcomes and while management doesn’t need to rule with an iron fist it is important leadership teams take the lead in driving a cultural shift, revitalising the billing model and ensuring strategic change.
This also makes it easier to ensure buy-in across all departments, and setting and tracking KPIs throughout projects. As a result, all employees will understand their role within the agency and what they need to do to play a part in reducing over-servicing across the board.
Making your technology work harder
One way PR agencies can effectively reduce over-servicing is to implement an agency management system – ensuring that all resources are allocated accurately and efficiently. In addition, a system like this enables the management team granular access to over and under-servicing levels – making it easier for them to identify any issues before they arise. A system of this nature will also enable effective management of scope creep, agency finances and client expectations – all in one place.
Looking forward and it is obvious that over-servicing is not something that will disappear overnight, but it is a very real industry issue that needs to be addressed. Client satisfaction is the backbone of agency success, but without a happy team and a profitable operation, an agency simply cannot survive. By working together, management and staff can eliminate unnecessary overspend and ensure the agency is running at the most effective and profitable level possible.