On the mind.

After profitability and offering a quality service, one of the most important factors for any agency billing at fixed or hourly rates is the spread of its customer. It’s crucial to ensure that no single customer is dominating your agency’s revenue.

The graph below represents our total paying customers (by revenue) from 2024, excluding those who brought in $5,000 or less. I left them out to keep the graph more clear, as many of those customers contribute to hands-off revenue, such as hosting. While customer names are hidden, each slice represents an individual customer, nearly 90 of our top-paying last year.

I love this graph for so many reasons! But I wanted to share my favorite insight from it, along with a potential issue we’ve discussed as a leadership team.

Positive:

I'll start with the good stuff. Hands down, my favorite thing about this graph is the distribution of clients. We’ve always maintained a pretty even spread, which is crucial for a service business. There are a ton of agencies out there, and my advice is this: if a single client makes up more than 25% of your revenue, it’s a problem.

Our top customer last year, at 14%, was higher than any other year, and even that’s too high for my liking. Luckily, we’re in a position where we can afford to lose a client like this, and that’s the goal of keeping our spread even. Our business moves forward with the same team, and we fill the gap. Plus, with an even spread, we’re more predictable.

🔑 Takeaway: Make sure no single client dominates your revenue.

Negative:

Now, onto a possible issue in the graph. Look at how many of our customers, each with a tiny sliver of 1% or less, still take up a significant portion of the pie. The big question I ask our team: how much time are those customers actually consuming?

It comes down to a popular principal called the Pareto Principle, or the 80/20 rule. Which suggests that 80% of your revenue comes from 20% of your clients, while the remaining 80% of clients often contribute little revenue but consume a disproportionate amount of time and resources. But even this has a caveat—because every relationship has potential. One of our customers that we have been happily supporting for years, but not a high revenue customer, just came to us this year with a $1M project.

🔑 Takeaway: Keep an eye on smaller clients. Make sure they’re not taking up too much time at the expense of your core customers—but also recognize when a long-term relationship is worth it.

Weekly moments.

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The Weekly is a newsletter that goes out each week written by Greg Bellinger, currently building and CEO of White Rabbit Group and The Labs.

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