As a general rule, if you look at your site and say, “Wait, we still do that?” then your agency might be offering too many services. If you need to pause for air when listing all your services to a prospect, then you probably have too many. If the margins are so low on some services that you secretly hope a deal doesn’t get signed, then you are definitely offering too many. Perhaps, it’s time to cut back.
Now you might be thinking, “What’s the harm in providing a lot of services? The more we offer, the more opportunities we’ll have. We’re a full-service agency after all.”
There’s some validity to this, yet the downside in trying to be what I call an “every service” agency is far greater than the upside. Eventually, you’ll sabotage your core services, kill your margins, burn out your employees (or hire the wrong ones), and lose countless business opportunities.
Although a bit counterintuitive, a thoughtful and strategic culling of your services can have the exact opposite effect. It can present you with more revenue opportunities at higher margins. It can help you identify, recruit, and train people with the ideal set of skills. It can help you stand out in an increasingly crowded field, where specialization reigns supreme.
We experienced the benefits of this approach firsthand. nDash Marketing focuses exclusively on written content creation for B2B brands, and over the last few years, we’ve seen positive results from dropping services such as website design, infographic creation, video production, and market research (along with a few others I’m too embarrassed to mention).
However, dropping a service is not a decision to be taken lightly -- despite my poor attempts at humor above. It has serious implications, so here are a few serious questions to help you make a more informed call.
5 Questions to Ask Before Getting Rid of a Service Offering
1) Is it a service we’ve provided recently?
This all depends on how you define the word "recently." To me, any service that’s been dormant for more than a few quarters is probably one worth dropping. Yet, if you’ve done a lot of this work before, and if the margins are high enough (more on this in a moment), you might want to keep it on the menu. This question could also be phrased as follows: Will anyone notice or care if we dropped this service?
2) Is it a relevant upsell/cross-sell from our core service?
I’ve seen mobile app development agencies that offer copywriting, print design agencies that offer SEO strategy, copywriting agencies that offer marketing automation support, and so on. Now it’s quite possible that these agencies can pull these off effectively, but I think it’s more likely that those “other” services are simply collecting dust because they are, in most cases, irrelevant to the agency's ideal client.
3) Is it priced drastically different than our other services?
Notice the emphasis on the word drastically. If one service is priced hourly while all others are project based, if one is priced high and the other low, or if one has margins of 50% and the other has 5%, then it might be time to drop one of them. (Note: Try to keep the one with 50% margins.) It’s hard enough to get clients on board with your core pricing model, so a service that’s priced fundamentally different from the others will only confuse clients and make them question your overall pricing strategy.
4) Is it a service we’re known for?
Are you receiving referrals and inbound leads for this particular service? Do you rank on page one in search results for it? Or do you have to shoehorn it into conversations with prospects and customers? If a service is just listed to make you look bigger than you really are -- if it’s just offered in name only to cast a wider net for prospects -- then it should be removed. It’s doing more harm than good.
5) Are we outsourcing all of the work?
I’ve yet to encounter an agency that doesn’t leverage freelance help for instances of overcapacity and when certain expertise is needed. There's nothing wrong with that. But when an agency relies on freelancers to provide the entire service, it should strongly consider dropping it from its offering. Why? For one, the agency is putting its reputation on the line for someone who’s not officially part of theorganization. Also, the client will figure this out eventually and wonder why they are paying the markup when they could go straight to the source. Your agency would be way better off simply making the referral (and collecting a fee for doing so).
Have you ever dropped a service offering? What results -- positive or negative -- did you see? Let us know in the comments below!
Originally published Jan 27, 2016 9:00:00 AM, updated February 01 2017