Your Best Seller Might Be Your Worst Margin

Intro

Leaders learn this lesson through direct experience when their initial request results in multiple subsequent requests. Margins shrink. Roadmaps drift. Teams burn out. “Client first” turns into “client-only.” The practice of overcustomization for clients leads to adverse effects on speed and cost control and product quality.

You don’t need to be rigid to avoid it. You need a clear line. And you need a playbook that keeps your core stable while giving clients what they value most.

What overcustomization costs you

The instant gratification of overcustomization occurs when it is used. You keep the deal. The client smiles. The expenses that are not immediately apparent tend to accumulate rapidly.

First, you fragment your product. Each exception creates new branches to maintain. Your QA surface area expands. The length of release cycles extends because you need to run tests across various combination sets.

Second, you distort your unit economics. Standard delivery operations occasionally receive single instances of work assignments. The market continues to expand but the pricing mechanism has not adjusted to this growth. You begin to include additional items for obtaining renewal discounts.

Third, your team loses focus. Engineers join operators to create ticket solutions. Support documents multiply. Human minds create mental structures which function as knowledge systems rather than computer systems that store digital information. The departure of those people leads to an increase in risk levels.

The GCC markets show this risk through their fast-growing programs. A Saudi systems integrator provided 19 customized modules to a single public-sector client as part of their delivery. The sales win appeared successful. The company dedicated 40% of their engineering resources to maintenance operations during the following year while operating at a complete loss.

The rule of 70/20/10

You should offer flexible solutions which preserve the current state of order. Use a 70/20/10 model:

The standardized core must reach 70% of the total content. Documented, tested, and priced.

The system includes 20% configurable options which come with pre-approved variations and defined Service Level Agreements (SLAs) and pricing structures.

The company operates 10% True Custom as a segment which generates high profits during limited time periods and needs executive approval to start operations.

The model maintains scale economics through its design which indicates to clients the areas of customization and their associated costs. The system enables sales teams to block all automatic approval of requests. They sell inside the 20% first.

Guardrails that make the model real

• Price the variance. Every product variation exists as a unique Stock Keeping Unit (SKU). No “free” work.

• Version the client. Create a feature flag or tenant profile; never fork your codebase.

• Expire exceptions. The company will stop custom work only when the customer extends service and finishes all payment obligations.

• Escalate 10%. The company requires executive authorization to approve any choices which extend past the standard catalog offerings.

A simple scoring method to avoid bad bespoke

The evaluation process for custom work requires a 20-point scoring system for fast assessment. Approve only if it hits 12+.

Value (10 points)

The change will affect revenue through two channels: it will create new annual recurring revenue (ARR) and it will increase sales to current customers. 0–4

The company requires a case study to demonstrate its strategic worth before entering a new GCC vertical market. 0–3

• Reusability (can 3+ clients adopt within 6 months)?0–3

Cost/Risk (10 points; reverse-scored)

• Delivery effort (FTE weeks)?0–4

• Operational load (support/SLAs)?0–3

• Complexity risk (security, data residency, vendor lock-in)?0–3

The system needs to be discontinued when reusability levels remain low and operational requirements are high unless it can be converted into a configurable solution. Leaders in KSA public cloud projects, for instance, often require data residency. The team should first implement a regional deployment pattern to solve the problem before applying this pattern to all Saudi and UAE clusters.

Packaging flexibility the smart way

Many clients do not ask for customized solutions. They want outcomes. Package outcomes, not exceptions.

The outcome bundles consist of prebuilt workflows together with an integration pack and training materials which help users get started more quickly. Price by time-to-value.

The system includes three service levels which correspond to Standard, Advanced and Enterprise tiers that provide specific Service Level Agreements (SLAs) and data residency and governance rules.

The method provides advantages to procurement operations. The GCC market consists of government and enterprise buyers who seek straightforward catalogs with complete product information and prices listed in SAR currency. You make it easy to buy—and easy to scale.

Contracting and pricing that protect you

The fastest way to drift into overcustomization is loose contracts. Lock in three clauses:

1. The scope of work includes all deliverables which correspond to specific catalog items that have both an ID and a description.

2. The project team must initiate change control procedures whenever any new item enters the project because it requires either a time and materials change order or a priced SKU.

3. Custom item lifecycle terms consist of maintenance scope definitions and renewal pricing structures and specific expiration dates.

Price on impact + complexity. For custom work, use:

The Custom Fee calculation uses the following formula: (Base Day Rate × Effort) × Complexity Multiplier (1.25–2.0)

The client must pay a sustainability surcharge between 10% and 20% of maintenance costs when they fail to switch to a standard option during the first six months.

This shifts behavior. Many clients choose the near-standard path because they learn about the actual costs of custom-made solutions.

Operating model to keep you honest

Structure beats intention. Your delivery organization needs to establish systems which prevent overcustomization from becoming a problem.

• Catalog Owner: Owns the 70/20/10 boundary. Rejects “quiet” exceptions.

The Design Authority performs a review of all 10% requests for architecture risk.

The Solution PMO system monitors dashboard metrics which include SKU margin data and client customization percentages and test case numbers and release delivery times.

The following list contains tasks which need to be performed on a regular basis:

• Quarterly prune: Remove or convert underused options. The system needs to eliminate options that less than three clients have chosen in two consecutive quarters.

Track three leading indicators:

• Standard SKUs generate at least 70% of total revenue.

• Engineering time on maintenance (target ≤25%).

• The time it takes for new clients to achieve value remains consistent or shows signs of growth.

The metrics show a decline in two consecutive quarters which proves overcustomization exists regardless of revenue results.

When to say no (and how)

You can decline without damaging trust.

The solution should provide users with their most suitable adjustable setting while showing them how to transition to this new option.

The scorecard results need to present numerical data that explains the trade-offs between different options.

• A paid pilot conversion with success criteria and a 90-day end date should be considered if the project remains critical.

Your team members will experience security through declining requests which will generate their respect. The protection of product integrity by vendors results in client trust because it guarantees their future success.

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Key Takeaways

Flexibility stands as the essential factor which leads to successful deal acquisition. Discipline keeps them profitable. Use 70/20/10, price variance, and measure the creep. Your business will remain intact through the process of client service delivery.

References

Internal Links

https://www.3msbusiness.com/pitfalls-of-overambitious-expansion-grow-safely

https://www.3msbusiness.com/the-risks-of-overdependence-on-a-few-customers

External Links

Here are 5 solid external sources to anchor that piece (incl. GCC/KSA):

• McKinsey — product-portfolio complexity and how variant sprawl erodes margin (external vs. internal complexity). (McKinsey & Company)

• McKinsey — what actually drives complexity costs (components and maintenance behind variants). (McKinsey & Company)

• PMI — scope change control to prevent scope creep (clean backup for your “catalog + change order” clauses). (Project Management Institute).

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