In ten years of running agencies and businesses, I’ve seen every model there is. The one that sticks out like a sore thumb, and the one I avoid at all costs, is the “Big Client” trap.
Unless you are in a highly specialised manufacturing niche where that’s just the nature of the gig, having one or two customers represent the bulk of your income is a death wish. As a rule, I never want any single customer to represent more than 10% of my turnover.
The Math of Stress vs. Value
I would always rather have 1,000 businesses paying me £20 a month than one business paying me £20,000 a month.
The reasons are obvious, but the main one is expectation management. When a client pays you £20,000 a month, they don’t just want a service; they want your soul. The constant need to justify that spend and provide high-touch support is exhausting.
Compare that to a £20/month service, like website hosting or ticketing through Comus. The customer expectation for that price point is naturally lower. That means over-delivering is actually possible, even on a mass scale. It is far easier to make 1,000 people feel like they’re getting a bargain than it is to keep one “whale” perpetually satisfied.
The Compound Effect
Then there’s the growth. If you have one big customer and they tell a friend, you have two customers. Big deal.
But if you have 1,000 customers and they start talking, the growth compounds at a rate a bespoke agency could never dream of. This is the “Volume × Value” model behind some of the best businesses in the world: Ikea, McDonald’s, Logitech. They sell at a low price to many people, make the product better than the price tag suggests, and they win.
The Strategy
This is exactly why I’’ve’m focused on software and platforms. It’s about building a machine that serves the many, spreads the risk, and allows for growth that isn’t tied to how many hours I can spend on the phone with one demanding CEO.
Lower the price, increase the volume, and you lower the risk. It’s that simple.
