Scope Creep Is Killing Your Bottom Line: Here's How to Prevent It. Before you add in any additional fees for excessive revisions or change orders, you must intimately know the math and exactly how your agency makes money. If you run profitability reports for your clients (and you should), you might see that certain clients -- those who consistently exceed scope with "small projects" and "just one more revision" -- are actually costing you money. Your account team also should have a clear understanding of how the business works. Here are three strategies to ensure you're both maximizing profitability and providing clients with top-shelf service. 2) Leave No Room for Misinterpretation in Your Scope Documents At the very least, your scope documents should define your deliverables, the number of revisions you're willing to do, and each project's timetable. The biggest reason change orders aren't issued is that agency leaders and employees think they don't have enough time or it’s not worth the headache. There will be times when the client or the circumstance justifies waiving that change order fee. Being specific and firm with your scope won't damage your client relationships. Most importantly, you'll no longer have to watch project scope continually creep and profitability shrink.
Picture this all-too-common scenario: You’re 12 revisions into a client project, when you promised only four. You’ve now spent almost triple the time you intended on the project, which gives you less time (and energy) to devote to other clients.
It’s a frustrating situation, for sure, but the damage goes beyond that — it’s also hurting your bottom line.
Scope creep is the ever-lurking monster under the bed for marketing agencies. A recent Deltek study on agency workflows, for instance, found that nearly 40 percent of agencies exceed their budgets because of scope creep.
It whittles away at your profitability, and when you’re constantly handing out a dozen or more revisions, it also sets unrealistic expectations for your clients. If left unchecked, it can mean less time for your agency to grow its business.
Of course, there’s a fine line between providing good service to your clients — which sometimes does require going above and beyond — and flat-out giving away your services for free.
I’m not suggesting you nickel-and-dime clients to death, but it is essential to set strict limitations on what you will (and won’t) do and stick to them. Otherwise, your profits will continue to seep out of the hole you’ve failed to block up at the bottom of your boat.
Scope Creep Starts with Vague Proposal Documents
It’s easy to blame clients for scope creep, but truthfully the blame sits right at your feet. At the end of the day, it’s your responsibility to serve as the gatekeeper of your agency’s services. Scope creep is entirely yours — not your client’s — to control.
Vague proposal documents are the number one culprit when it comes to this problem. They lead to over-servicing your clients, which in turn leads to lower profits.
The key: Set limits, set boundaries, and be very specific. Good scope documents include assumptions about both the project and the processes. Clearly outline the ripple effect that will happen if one piece of the project is delayed or altered, and detail how changes should be addressed, should the need arise.
Your clients need to know explicitly what they can and cannot expect from your team. If you specifically outline the deliverables you will provide each quarter, with little room for interpretation, then you’ll be setting yourself up for success.
It’s a Numbers Game: Know the Math, Increase Profits
OK, so you know you need to tighten up your language on your proposal documents, but where do you start?
Before you add in any additional fees for excessive revisions or change orders, you must intimately know the math…
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