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Learning to filter out those unprofitable clients

Published on Tuesday, 13th June 2017, contributed by FD Works

Having lots of clients clamouring to work with you sounds like a great position to be in. But if you don’t filter or pre-select your agency’s client base, it can actually end up having a negative impact on your productivity and your profitability.

So it’s really important that your creative business has a clear idea of the ‘ideal clients’ you’re aiming to work with, so you can build a client base that’s delivering for the business.

But how do you know which clients are the right clients?

Looking out for the negative client traits

It’s important to work with businesses that inspire you and where there’s the creative freedom to innovative and create bold new ideas that fit their brief. But there are many other elements that will define whether a new customer is actually a ‘good client’ or a ‘bad client’.

So it’s vital to ask some questions about the client relationship, both prior and during the course of any creative project you may be working on.

  • Is there a good relationship with the client and do they share your creative mindset?

  • Do they stick to your processes, or do you waste time chasing up deliverables?

  • Do they come back to you quickly when reviews and sign-offs are needed?

  • Are they known for changing their mind or insisting on changes at the last minute?

  • Do they pay their bills on time or do you have to chase for payment?

  • Are you making the profit you need to from their projects?

If the answer to any of these is a resounding ‘No!’ then that’s cause for concern. Asking these questions throughout the project will soon highlight whether this is a client who’s adding value, or one that’s wasting your time and not bringing in the best income.

What makes a good client?

The specifics of the ‘ideal client’ will be different for each agency. But there are some key attributes you should be looking out for when hunting for the diamonds in your client base (and making sure you focus on these good clients).

A good client should be:

  • On your wavelength – look for people who share your outlook, understand your mindset and who are a genuine pleasure to work with on a project.  

  • Organised and timely – they should be well-organised, happy to keep the workflow ticking along nicely and able to meet deadlines without prompting.

  • Happy to listen and be advised – ideally, clients must be open to listening to your ideas and following professional advice – that’s what they’re paying you for.

  • Willing to pay for the value you add – work with people who see the benefits you bring to their creative work – and who are happy to pay that price.

By focusing on clients who tick all the right boxes, you’re not just going to have an easier life – you’re also going to have a more efficient, more productive and more profitable agency.

Balancing time, budgets and people

Bad clients can be a real drain on both your time and your labour. So it’s vital that you track and review the time spent on each project to make sure you and the team aren’t digging yourself into a time and profit hole.

As we mentioned in a previous Bristol Media blog, measuring your agency's performance is incredibly important. Tracking, recording and reviewing your agency numbers helps you see the patterns and trends of client value – so you can see which clients are delivering value, and which ones are slowly dragging you down.

Some key performance indicators (KPIs) to keep an eye on will include:

  • Average fee per client

  • Hours spent per project

  • Revenue per client

Keeping an eye on these KPIs on a regular basis keeps you informed about the agency’s performance and will soon start shining a light on the clients who are not delivering.

Want to know more about focusing on the right clients?

Read the full version of this blog on the FD Works site – with even more detail on how to filter out the unprofitable clients from your agency.