Client mix is a big deal for agencies. That mix influences the agency’s strategic direction, its hires, how well they execute across different media, and what value clients place on their efforts. Every agency has a different philosophy on how to curate their roster.
Some agencies play to their strengths and stick to a specific vertical. Prior to opening up shop, the principals or creative leads may have had deep in-house experience with a fashion brand or worked as an on-staff creative lead for a hospitality group. Their new agency starts off by targeting their business development efforts to familiar verticals, hoping to collect as much business as possible from former colleagues and through their industry’s tight network. They evolve from broad creative service providers into more specific vendors: web agencies for hotels, or branding agencies for restaurants, or social agencies for luxury fashion brands.
Others take a more agnostic approach to the industry mix, focusing instead on hedging their revenue streams through a diverse set of engagement types — one-off fee-based projects, short-term retainer arrangements with larger clients, cash plus sweat-equity arrangements with start-ups, the occasional referral fee, more open-ended hourly arrangements. Figuring out how best to work collaboratively with clients can be difficult with so many engagement models running in parallel — the speed required to get to client buy-in on a flat fee project calls for a very different creative process than the more experimental approach that can grow out of an hourly arrangement. As one of those models starts to take hold and becomes standardized through the agency’s contracts, it can affect the agency’s culture and pitch: “We work fast,” “We work collaboratively,” “We custom tailor our approach for each client.”
Still others move from a broad selection of services to a very specific deliverable type. Maybe they started working across all media — in print, branding, digital, advertising, content, in strategy — and found, over time, that their strength is in video production. From there, the agency streamlines its delivery methods and hires specifically for videography, growing more adept at video production and letting their other talents atrophy.
For the first two years at Mayday, we toyed with every approach imaginable and all of the ones above — less because we were pursuing any defined strategic goal and more out of the desperation that comes with first hanging a shingle. We worked with everyone from obscure drug companies to boutique class-action law firms, huge fashion brands to multinational conglomerates. We took small bits of equity in losing start-ups to keep costs down for their founders. We ended up on the board of a nonprofit to reduce fees for the Executive Director. Being so open took us to a lot of places with clients, but didn’t necessarily provide a framework for why we were there.
Over time, the curation of our client mix gelled and, more recently, we’ve drawn inspiration for our approach from a client of ours, and an unlikely source: a Venture Capital firm. The VC is committed to servicing their portfolio companies with cash injections, but more importantly, with strategic insight from institutional investors. For the early-stage companies the VC has in their portfolio, those institutional investors represent both customers and potential acquirers. The VC, then, has positioned itself at the center of a mutually-beneficial relationship between start-ups and Fortune 500 institutions. The Fortune 500s gain access to a vetted group of technologically-nimble and inventive start-ups; they can learn and operate vicariously through the innovative practices of these small companies. The start-ups, on the other hand, gain perspective on how best to define and deliver their service offering to institutional clients.
How does that apply to a creative agency? We’re not assembling an investment portfolio, but we do want to make sure there is symbiosis between our clients, that our work with one can help improve our efforts for others, and vice versa. If sound creative strategy and beautiful design execution are table-stakes for any engagement, can we use our client curation to grow our value with everyone we’re working with? To evaluate whether Mayday is a good fit for a new client, we start by looking into the composition of our existing client roster and what knowledge we can bring from previous or ongoing engagements to better execute the new clients’ project.
From this goal, we’ve formed our working model for assessing client mix. In practice, it’s yielded two camps, roughly split down the middle. First, early stage start-ups. These are physical product companies, service firms, and companies built around technology products. They are fast, light, talented, guided by intriguing founders, but often lack the discipline to keep their companies’ activities focused. Second, large-scale companies, often Fortune 500s and multinationals. They are engaged in diverse business functions, methodical in their approach, but sometimes have a hard time advancing innovative creative initiatives outside of their set strategy. In other words, big companies need to sometimes act more like start-ups and start-ups sometimes need to act more like big companies. By curating a mix of both, Mayday increases its value beyond what’s written in our scope of work, and can operate as a window into each side’s approach. We can bring a start-up’s nimbleness to major corporations that are often hamstrung by bureaucratic reviews and over-analyzed group decision making. Then, for start-ups, we can offer insight into the large companies’ due diligence processes and their approach to organizing teams around focused actions.