We needed to start turning away clients, and you do too.

There is this fine line when you’re trying to get a digital agency off the ground (or any sort of agency that relies on recurring revenue from clients) between signing any and all business that comes your way and becoming more selective with the type of clients you choose to work with.

In the early days of my company, AdVenture Media, the idea of turning away business willing to pay us for our service was a completely obscene notion.

Any agency owner knows how hard finding and signing new clients is.

That process doesn’t even necessarily get easier over time, but what eventually happens is that you start seeing the problems that come with onboarding bad clients becoming more and more apparent.

This happened to us as well. At a certain point, we were signing a lot of new clients each month. The problem was that for certain types of clients, there was a high rate of turnover.

There were also other issues.

Firstly, retention is so integral to growing your revenue and increasing the size of your business over time. Without additional monthly revenue from your existing clients, you’re going to get into big trouble.

I knew that we were long past the point where a better system needed to be implemented.

I decided to implement an internal process with our sales team who were primarily responsible for responding to inbound leads (we don’t have an outbound sales team, and don’t ever plan to).

There are a number of reasons a client is unlikely to be successful, and it’s usually a combination of the client’s business, online presence, budget and attitude toward the inherently unpredictable nature of advertising online in the first place.

I saw that there were three huge problems with signing clients that were not likely to be successful with the advertising service we were providing.

  1. It was a moral issue and conflict for me personally. Our entire service is predicated on the fact that we feel that this is a good place for our client to be spending their money. Inherent in the sales pitch, even if it’s not something verbally conveyed, is the idea that we, as your digital marketing agency, would spend our own money in this way if we were in your shoes. So taking someone’s money who we didn’t feel would likely succeed was ethically problematic.
  2. Taking on clients who were unlikely to succeed was an emotional drag on our account managers. It’s not exciting to work on an account that you just know the results are not going to meet the client’s expectations. Every phone call is dreaded and even doing routine work in the account becomes a real challenge.
  3. Clients that will turnover quickly become a major waste of time. This is time that should have been spent developing relationships with our better clients and improving their campaign performance.

In order to avoid taking on these clients altogether, I implemented a tier-based system for our sales team. The tier system categorizes inbound leads for PPC management into three categories:

Tier 1: Accounts that have been spending more than $10,000 / mo in their campaigns for at least 6 months.

Tier 1 accounts are considered senior accounts and they don’t need any additional review. Their sustained level of spend is indication enough that there’s a business here that is working and ad campaigns that can be optimized.

Tier 2: Accounts that have been spending between $5,000 and $10,000 per month for between 3 and 6 months.

These are accounts that need an audit and approval from an active account manager. The sales person handling the lead needs to sit down with an account manager and request approval to sign the account. The account manager reviews the web assets of the client, their budget and their historic data. If they get a sense that this is a client that our services will benefit, the salesperson can move ahead.

If the account manager feels that this client is likely to be problematic and disappointed with our services, the salesperson does not move forward with the lead.

The only exception is if the client’s campaigns are clearly profitable. In that case, a Tier 2 lead may still be sent a proposal, provided that the attitude of the client is one that will lend itself to a long term, healthy relationship.

Tier 3: Any account spending less than $5,000 per month for less than 3 months. Regardless of profitability, every single Tier 3 leads need an approval from an account manager.

The idea behind the approval by an account manager is that they, more than the salesperson, have an intuitive sense of how structure, budget, attitude and objectives need to be aligned in order to succeed with digital advertising.

I implemented this new policy at my company about six months ago, and it’s working well. Initially I had some pushback from sales, but ultimately it was something that I was very clear about the importance of them taking seriously.

Since implementing this system, we’ve been bringing on significantly fewer clients each month. But morale is up, I am not worried about their being any ethical conflicts, and we’re building better relationships with clients who we’ll now be more likely to retain for far longer.

And because of all that, revenue is up too.

I strongly encourage agencies to take a step back and think about the sort of clients they want to work with. Think about how you can implement internal systems that will help your company bring on those types of accounts, while avoiding the ones that will cause nothing but problems.

For an agency, there’s nothing quite as satisfying as a good client who you know is benefitting from and appreciates your work, and there’s nothing quite as demoralizing as bad clients that you know are going to turn over, causing unending amounts of stress and wasted time until they do.

It may seem like you’ll be sacrificing revenue by turning away business, but I guarantee that your company will make more money as a result.