As agency owners, your client portfolio probably includes both ideal and nightmare clients:
- Ideal clients are a pleasure to work with, pay bills on time and allow your account teams to work efficiently, giving you greater opportunity for profits.
- Nightmare clients on the other hand send a million emails a day, require a billion revisions and take a trillion days to pay.
Obviously, as you look to build and grow agency, you want more ideal clients than not. Well, your first step to profitability and sustainability must start with identifying who those ideal clients are, and then making sure they stick around for the long haul.
Following are tips on how to find and reward those clients that enable you to maximize your profitability potential.
How to Identify Ideal Clients
Inherently, you probably already know who your best clients are, but it never hurts to put some tangible data behind it:
- Overall Project Profitability: Multiply the hourly rate of each employee who worked on a project by his or her total time invested. Subtract the total dollar amount from the project invoice to find how much profit was generated.
- Revision Round Time: A component of productivity is time invested making client revisions. Ask staff to note in timesheets when they are updating projects per client feedback, and then average this time out over all projects completed for that client.
- Campaign Management: Track time spent on calls, in-person meetings and responding to a client’s emails. Clients that require a lot of handholding and communication take away from the time staff has to perform revenue-generating work.
- Payment Turnaround: Track when invoices are sent, and when they are paid. Average out the number of days to pay by the number of projects completed. The longer the average time period, the longer you are fronting money for the client’s work, which is a drain on your resources.
Compare the numbers collected above across your agency client portfolio to uncover your best clients—those clients that pay the quickest and give your account teams the opportunity to make the most efficient use of their time each day.
Ancillary benefit: These metrics can also help you identify inefficient account teams, personnel and projects.
How to Reward Ideal Clients
With your best clients identified using actual data, it’s time to make sure they remain your clients long term. Below are four ideas on how to reward your best clients.
- Offer Discounted Rates: Using the above numbers, you can confidently identify how profitable a client is. If their actions give you the ability to be more profitable, establish a little goodwill by offering them a slightly lowered project price or hourly rate.
- *Treat Them: For some clients it’s a round of golf. For others, it’s a day at the spa. Whatever it is, find out what your client likes to do outside of work, and treat them to it. Not only will they value the experience, it gives you an opportunity to strengthen your relationship. Base the extravagance of the treat on the client’s level of profitability.
- *Buy Lunch for the Office: A simple and appreciated gesture is to buy lunch (or breakfast, or dinner) for your client, or their entire department/office. You might also send around a cake or box of donuts to celebrate the company anniversary or a successful campaign launch. Use the data collected to help determine whether lunch is catered or delivered in a pizza box.
- *Connect Like-Minded Businesses: One unique asset at your agency’s disposal is the intimate knowledge you have of client businesses and their objectives. In some cases, there may be an opportunity for two clients to collaborate with each other. Make that connection and introduce key stakeholders to one another. Be careful to only connect ideal clients, as a bad introduction can sully your client relationship.
* These rewards can all be enhanced by writing down different information about your clients and contacts, including birthdays, anniversaries, hobbies, kids names and informal conversations. WorkflowMax offers custom fields in which you can store this information for reference later.
Building the foundation of your agency around highly profitable clients ensures not only immediate success, but establishes a benchmark upon which to evaluate new clients.
Take the time to nurture relationships with those clients you want around for the long haul, and don’t hesitate to severe ties with those clients draining your agency’s valuable resources. For a break-up email template, check out our recent ebook on HubSpot.
How do you identify and reward your best clients? Please share in the comments section below.