In the world of consulting, the pressure to deliver exceptional value to clients is ever-present. Consultants often go above and beyond to meet or exceed client expectations. However, there’s a fine line between providing outstanding service and over-delivering—what’s commonly known as “gold plating.” While the intention behind gold plating may be to impress or satisfy a client, it can have unintended consequences, particularly on your profit margin.
What is Gold Plating in Consulting?
Gold plating refers to the practice of adding more to a deliverable or service than what was originally agreed upon in the contract, often without the client asking for it. This could mean additional features, extra hours of work, or offering services beyond the original scope of the project. Although these added touches may seem like they would enhance the client experience, they can lead to several issues that eat away at your profitability.
The Allure of Over-Delivering
It’s easy to see why consultants might be tempted to gold plate their services. After all, a consultant’s reputation is built on delivering quality results. Exceeding client expectations can lead to positive feedback, repeat business, and referrals. However, the initial boost in client satisfaction is often outweighed by the long-term impact on the consultant’s business.
How Gold Plating Hurts Your Profit Margin
- Increased Costs: Every additional service or feature you provide comes at a cost—be it time, resources, or money. When these extras aren’t accounted for in the initial pricing, they eat directly into your profit margin. Even if the cost seems small, it can accumulate over multiple projects, significantly reducing your overall profitability.
- Client Expectation Management: When you consistently over-deliver, you inadvertently set a new standard of expectation for your clients. They may begin to expect the additional services as part of your standard offering, making it difficult to charge appropriately for future projects. This expectation can make it challenging to scale your business sustainably.
- Scope Creep: Gold plating often leads to scope creep—a scenario where the project grows beyond its original boundaries. This not only increases costs but also delays timelines and creates stress on your resources. The more a project expands, the harder it becomes to maintain profitability.
- Undermining Value Perception: Over-delivering can sometimes devalue your core services. If clients receive more than what they paid for, they might begin to question the true value of your offerings. This can make it difficult to justify your fees in future engagements and may lead to price sensitivity.
- Burnout and Resource Drain: The desire to gold plate services often results in consultants stretching themselves too thin. The extra effort put into over-delivering can lead to burnout, negatively impacting the quality of your work and your ability to take on new clients. Additionally, overworked teams can become disengaged, leading to higher turnover rates and additional costs.
Finding the Right Balance
To avoid the pitfalls of gold plating, it’s crucial to focus on delivering exactly what was agreed upon in the contract—and doing it exceptionally well. Here’s how you can strike the right balance:
- Clear Scope Definition: Ensure that the project scope is clearly defined and agreed upon before work begins. Any additional requests should be discussed with the client and billed accordingly.
- Value-Based Pricing: Consider pricing your services based on the value they deliver to the client rather than the number of hours or tasks completed. This approach allows you to focus on delivering high-quality results without the temptation to add unnecessary extras.
- Communicate Effectively: Keep the lines of communication open with your clients. Regularly check in to ensure their needs are being met and manage their expectations regarding the scope of work.
- Offer Upgrades: If you feel that additional services would benefit the client, offer them as optional upgrades rather than including them for free. This allows you to maintain profitability while still providing extra value.
Love and Soul Always,
Kawania Wooten, Wedding Industry Educator
Photo: Shutterstock
