Fridays are free (when you're overservicing)

Overservicing - or giving you time away for free - is the single biggest reason agencies don't have the margins they want. It also contributes to staff turnover and slows agency growth.

On average agencies give clients an extra 20 per cent of time for free (PRCA Benchmark Survey) - Fridays really are free. The reality is probably much worse.

The reasons for this are numerous: longstanding attitudes towards the value of public relations from both consultants and clients; lack of commercial expertise in consultancies; failure to set up client relationships properly at the beginning; and an overwhelming desire by PR types to be liked.

Industry reaction: 'Overservicing is rife', 'Time sheets are abhorrent', 'We need to sell value'

Reducing overservicing is no easy task. Almost every agency in the UK suffers from it and clients have come to expect it. I even know of in-house PR managers who have been paid bonuses on the level of overservicing that they got from their agency. 

But if you don’t have a detailed, fully worked-up budget, based on robust information, in all likelihood you are setting yourself up to overservice.

The lack of measurable objectives is the second major contributor to overservicing. If you are unable to evaluate whether you have been successful it is almost impossible to stick to a budget. Despite the large amount of free educational material and tools available, far too many campaigns are still not evaluated.

I know this is not popular with many agency heads as it is counter to a creative culture, but running a simple but effective capacity-planning and time-monitoring system also gives you the information you need to know which are the problem children among your client portfolio.

Along with this, your team needs to be trained to negotiate with clients when they request work that will not deliver on the agreed objectives and is not budgeted for. 

Underpinning the processes needs to be a commercial culture where your team values the impact that their work has on the client’s business and are happy to be evaluated.

All of this means significant change in how your team handles client servicing – and it will not happen overnight – but the improvement in margins, increase in team motivation and improved growth will make it well worthwhile.

Richard Houghton is PRWeek's Agency Doctor and co-author of ‘Grow, Build Sell Live’

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