Reevaluating the 80-20 Clients

One of the toughest considerations for political firms, particularly in the early stage, is what the mix of clients should look like. Firms will often try to build up a store of smaller-dollar clients, but the catch with many of the lower-fee clients is that they can be a collective headache. 

There are certainly successful business models based on doing a high volume of small-dollar services. Those models can be difficult to start up and sustain, but they also more easily lend themselves to creating some type of product that automates your service. Big money can flow from that.  

Here’s what it starts to become more complicated: a business model where you have big clients and take on a few small ones when you’re stressed about money or want to do someone a favor. Or maybe you’re betting that those small clients will turn into big clients themselves one day. That idea we often have to reel in quite a bit.  

I refer to these as “80/20 clients” — the clients who are paying less than 20 percent of the bills, but expect 80 percent of your attention. Ideally, you’ll cut anyone who meets this criteria loose: keeping them on is definitely holding back your growth potential. 

If you’re worried about cash flow, it might be time to talk to your bank about vehicles that can help you smooth that over so you’re not feeling pressured into taking clients that aren’t good for the health of your business just to get some quick cash in the door. That energy you’re using to service the 80/20 client is so much better spent going out and hunting the big fish.

If you’re taking on these types of clients as favors or because you’re betting they’ll turn into bigger clients later, I can appreciate that. You do work in politics, after all, and betting on the right horses is a key part of your business strategy. 

The key here is to set boundaries on how many of these clients your firm will take on and/or what percentage of your staff time you’re willing to allocate to clients like this — no more than 20 percent please. 

Once you set the boundaries, make sure you stick to them.