Increasing profitability: the 80/20 lens on clients, services and team

Nadia runs a digital marketing agency in Mechelen. Fourteen people. SEO, social media, web design, mostly for B2B clients across Flanders. A business she had built steadily over nine years on a reputation for delivery and accountability.

Revenue was healthy. But at the end of every year, the profit felt thin relative to the hours everyone had worked.

When a finance partner suggested she rank her twelve clients by actual profit, including the time her team spent serving each one, the result was uncomfortable. Three clients were generating sixty-eight percent of the firm's profit. The bottom five clients, in aggregate, were generating four percent, and that was before counting the hours her senior team spent on the back-and-forth.

Nadia had been treating every client as equally valuable because every client was paying. The analysis showed that equal treatment was costing her. The capacity absorbed by her least profitable clients was the capacity she could have redirected to the three relationships actually building the agency.

She had never asked which client relationships were generating the return that justified the investment. One question before we continue.