There are No Small Clients . . . Wait, Yes There Are

Many years ago – in the earliest days of founding 3Q Digital – a good friend reached out and asked me if I could help his fledgling business with online marketing. I asked him the standard qualifying questions that a media buying agency poses to a potential client: how much do you want to spend on online marketing, who is your target client, and how much can you afford to pay to acquire each new customer? My friend responded that he had a monthly budget of $3,000, that he was targeting enterprise software companies, and that he could pay $25 per new customer.

All of these answers set off alarm bells: the $3,000 budget was way below my then $25,000/month minimum, targeting enterprise clients is very time-intensive, and actually getting an enterprise client for $25 is basically impossible. I told my friend that I wasn’t a good fit for him and recommended some consultants as a better option.

My friend was undeterred. He begged me to help him out. He promised he’d be the world’s best client and he noted that his budget would be much larger if we hit his performance goals (which, by the way, is what pretty much every prospective client says). Against my better judgment, I agreed to take him on at $500 a month (a steep discount from my then minimum rate of $2,500 a month).

After one month of setting up his accounts, creating targeting, building creative and optimizing his bidding strategy, the account was slowly progressing but was nowhere near his $25 acquisition goal. My team had spent hours on all of this and suffice to say, we were losing money servicing the business. I then got a call from my friend. “David, this just isn’t working out. We’re not getting the results we need. Frankly, we need to cancel the contract immediately. Oh, and I don’t think I should pay you $500 since I didn’t get the results I wanted. Why don’t we just split the difference at $250.” I told him not to bother – the amount of time it would take to create the invoice (and potentially chase him down when he didn’t pay) wasn’t even worth the $250.

Say No to Small Clients!

Small clients are more difficult than large clients in three ways: first, they have less money to spend, second, they are less savvy, and thirdly, they want more of your time. All of this means your hourly rate is going to be dramatically lower than a regular or large client, and you are likely to experience more relationship volatility (if the client isn’t savvy, they will have a difficult time assessing the work you are doing, which can lead to dissatisfaction or termination).

Having said all of that, let me caveat that statement with two key points. First, every client deserves to think that they are your most important client and therefore take up a lot of your time. This is the essence of great customer service – making every client feel like they are your number one priority. Which is another way of saying: don’t take on a client unless you are willing to treat them this way.

Second, the definition of a “small client” is relative. If you are starting your agency, a $500 a month client might be a “whale” relative to your other clients that you are billing $100 a month. By contrast, giant consultancies like McKinsey and PWC probably don’t get out of bed for a deal worth less than $500,000, and even then they might be tempted to put their “C team” on the account.

An adage that I repeatedly tell prospective clients is that you should never be the biggest or smallest client of an agency. If you are too big, you run the risk that the agency doesn’t have the experience or capacity to deliver great results; if you are too small, you risk being ignored.

Ultimately, however, this shouldn’t be the responsibility of the client to figure out. Agencies need to disqualify too-big and too-small clients during the sales process. Once the contract is signed, if the agency can’t meet the client’s expectations (assuming they are reasonable!), it’s the agency fault that they signed the deal.