ColdFire

Since I started working full-time on ColdFire last year, our small team has served 10 B2B clients and it's time to reflect. Let me tell why I think you should fire some of your clients.

Some clients have performed wonderfully and others have really underperformed. As a performance-driven marketing agency it's important for our clients to curate our service, but also (it turns out) for us to carefully curate them. That is a lot harder than it seems.

There are roughly 2 types of clients in the marketing agency world: The first are clients who have already found some PMF, are growing a bit and want to add an extra channel (engine) to propel their ship. These are great clients because we are able to introduce them to the nuances of operating our channel (polite cold email) while delivering strong performance on this additional channel, given the market already wants their product.

The second type of clients is a different ballgame. These type of clients want to work with your marketing agency because they don't know how to market their own product or service (on any channel). They have not yet found PMF (or have lost it) and are drifting in the market without a clear plan on how to go to market (GTM). Moreover, they often don't even know the basic unit economics of their product like CAC/LTV, margin or RoaS.

These clients see you (the agency) as their lifeline, as some kind magic button that they can push to resolve their fundamental PMF issues. They often lack the self awareness to acknowledge + diagnose the root cause of their lack of leads or sales, and are looking for a shortcut. These types of potential clients have a fundamental business problem that no agency can solve unless it would get a controlling equity stake in the business and completely reset any or all aspects of the company - which of course will never happen.

Beyond a disappointed client after just a few months, there are secondary and tertiary effects that can harm your agency. 1) your team can get demotivated by working on accounts that show poor results while handling the no-good-news-client-check-in calls.
2) Clients will often still blame your agency for the lack of results (understandably) since you're not achieving the results forecasted during the sales and onboarding process. 3) You will not get a testimonial from these clients so they will not contribute to any kind of WOM marketing (if anything they'll speak negatively about your agency) and 4) these clients will often churn early making them a dangerous cost-center for your agency.

A critic may say: "it's easy for the marketing agency to blame the client's level of PMF" - especially if the marketing agency is 'not delivering' but I would push back on that. For one, if you have multiple clients and you're using the same marketing playbook on each of them and one succeeds and the other doesn't, it's quite obvious there is more market pull for product or service A than B.

Since you can't tell a client that their service or product sucks (even if it does) it is much better to resist the dollar-sign-emotion of a potential sale and politely stop the selling process early. It will save you a ton of time, stress and unhappy clients down the road.

The key learning for us was that the clients which would turn out to perform the worst, are 90% self-selective. Meaning, if you figure out their sole purpose to hire you as an agency is because their LeadGen/Revenue have collapsed and they're not performing on any channel, this is a red flag. Since it is hard to identify which client will benefit from your agency and which one will give you headaches, I recommend that you add specific questions to your sales process (ideally between the MQL and SQL stage) that will give you insights in to their overall channel-performance and motivation to work with you.

Fin.