Overservicing refers to the practice of providing more work, time, or value to a client than what was originally scoped, agreed upon, or compensated for. This often occurs in service-based businesses—especially agencies—when teams go above and beyond to please clients, resolve project challenges, or make up for internal inefficiencies. While sometimes done with good intentions, overservicing can quickly erode profitability and lead to burnout among team members.
Overservicing typically manifests through excessive revisions, responding to out-of-scope requests without pushing back, spending more time than estimated on deliverables, or even continuing to work after the retainer or budget has been exhausted. The key issue isn’t the extra effort itself—it’s doing so without tracking it, without charging for it, or without revisiting the scope. It’s especially problematic when it happens consistently and over long time horizons, leading to systemic profitability problems.
Why It Matters for Agencies
Overservicing is one of the most common profit leaks in agencies. While it may feel like “good client service,” chronic overservicing distorts operational data, masks inefficient processes, and trains clients to expect more than what they’re paying for. This can set a dangerous precedent.
Here’s why it matters:
- Erodes profit margins: Time spent overservicing isn’t billed, reducing Average Billable Rates (sometimes referred to as Effective Hourly Rates)
- Distorts performance data: When overservicing isn’t tracked, projects may appear on-budget when they’re actually running over.
- Burns out teams: Staff get overworked fulfilling demands that aren’t accounted for in their resource plan & schedule.
- Creates unrealistic client expectations: Clients may assume out-of-scope work is always included, leading to chronic profitability and expectation management challenges.
- Prevents scalability: Agencies that consistently overservice struggle to grow profitably.
How to Optimize
Avoiding overservicing starts with awareness, clear boundaries, and operational discipline. Here’s how agencies can reduce overservicing while maintaining high-quality client relationships:
- Track time rigorously: Log all hours on projects, including overages, to get accurate information on what’s required to service clients.
- Set clear scopes of work: Use detailed contracts that define what’s included and what’s not.
- Use project management tools: Monitor task timelines, budgets, and team allocation.
- Establish client communication protocols: Teach account managers to say “yes, but…” or “yes, and here’s what that will cost.”
- Regularly review project health: Assess scope creep and overages weekly.
- Incentivize account profitability: Tie team success metrics to margin, not just delivery.
Training your team to recognize overservicing behaviors is essential. Empower them to escalate when client expectations exceed the agreement, and support them in having proactive scope conversations.