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Should I Dump A Small Client For A Larger One, with Erik J. Olson

Episode #1283

Erik was asked if he should dump a small client for a larger one. Listen to Erik share the different things to consider first before making a decision in this kind of situation.

July 21, 2022

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Episode Transcript

Erik J. Olson (00:01):

Oh, this is a good one. Should I dump a small client for a large one? What is happening? I am Erik J. Olson. So there was a series on Netflix. Actually. It was what was it? I, I forget the original network, but it was on Netflix. Was it called madman? You’ve probably heard of it if you haven’t. I highly recommend it. As a matter of fact, I learned a tremendous amount about the advertising industry by watching this fictitious drama about the advertising agency back in the 1960s, seventies, I think it was like first of all, it’s incredibly interesting from a marketing and advertising perspective, but there’s also a lot of scenarios that came up that, that actually I was able to apply like directly and immediately to my business. One of the scenarios that they, a situation they got themselves into is they were the advertising agency of record for a small regional airline and a big airline came to them and wanted to work with them, but they had exclusivity.

Erik J. Olson (01:06):

They couldn’t work with two airlines at once. And so they had a really difficult decision to make. Should they take the meeting with the bigger airline and risk the relationship with the smaller airline or tell the bigger airline, forget it. So actually in that series, it’s, it’s a made up drama, but what they decided to do was they literally fired their existing client in order to just take it wasn’t even really like a pitch meeting. It was like a potential pitch meeting a conversation with the bigger client, the bigger airline. And honestly, I forget how it’ll turned out. I think they got the client, but I’m not really sure. It doesn’t really matter. The thing is they decided that they were going to dump their small client for at least the potential for a large client. So should you do this too? Now, this has happened to us on multiple occasions where we have this situation where we have a client and a larger more affluent client with deeper pockets and a bigger budget.

Erik J. Olson (02:14):

They reach out to us. Now there’s a couple different things to consider first and foremost. Well, I don’t even know if it’s first and foremost, but first you have a legal obligation. If you have a contract, you have to abide by the contract. Don’t think that you can just like push the contract to the side and do whatever you want. If the contract says you’re going to provide services, X, Y, and Z, up through a certain date, then you have to abide by that, right? There’s no way out of that. So don’t skirt your legal obligation. Two, you have a moral obligation, right? So what I’m saying here is that if you told a client that you were going to do the best you can for them, give it your all, and you’re going to just, you, you got their back,

Erik J. Olson (02:59):

Man. Then you can’t be like jerking them around and not really doing that. Especially if like you have like a massive conflict. Now, some conflicts I would say are small in nature. Some are larger in nature, and it really kind of sometimes depends on the personalities of the client or clients. But by and large here at Array Digital, we, when we know there’s a conflict and I’m not just talking about two competitors in the same geographic area or overlapping, I, I can deal with that. Like when it comes to Google, as an example, there are 10 spots on the homepage. I can get 10 clients in those 10 spots. So I know I can provide good services to all of them, and I can do it without taking knowledge from one company and using it as a weakness or, you know to the advantage of the other company.

Erik J. Olson (03:53):

So I, I’m not worried about that at all. And we have segregation here on our team where we know that, and look, we’re professionals, just like with lawyers, when you hire a lawyer, they have a, an oath, a duty to represent all their clients, but they also know when it’s time to say, you know what? I can’t represent you, Mr. Or Mrs. New client because of this conflict with another client. So we, we act very, very much in the same vein. If, if clearly like two clients are going at it against each other they’re the top two competitors like that probably wouldn’t work out for us, but that’s rarely the case. Now, actually there have been with one client in particular. Recently we have been approached by two different competitors in the last two to three months to, for them, for us to work with his competitors.

Erik J. Olson (04:44):

Now, in both cases, we decided that we were going to say no, in one of those cases, the competitor was actually smaller than our client. But in the second case, the competitor was much, much bigger. Now, in both cases, we decided that we came to the dance with our client and we are going to stick with our client. Now, when you tell a big client, no, or a big potential client, no, because you have your existing, smaller client and you’re gonna stick with them. It like, Hey, it, like on the one hand, it sucks, right? Because you’re like, oh man, that could have been a huge client that could have done like amazing things for our business. But on the other hand, you don’t really know if it was ever gonna work out. If it was gonna be a terrible relationship. Maybe they would, you know, it would like after two or three months, maybe they’d dump you, but you just dumped your old client. And now you got no one, right? So this is where like, if you get greedy, get burned kind of a situation. So in my opinion, stick with your client. But there are still some ways that you could frankly benefit from it. One is you can go to your existing client and say, Hey, I just wanted to let you know, Bob, Jennifer, over at X, Y, Z company reached out to me. They wanna, they wanted to work with us,

Erik J. Olson (05:58):

But I said, no, cause I’m in it with you, man. We’re going all the way. Oh. And by the way, Bob, remember how you said at the beginning of next year, you’re gonna raise your budget. Let’s talk about that in January. Okay. Cool. All right. So you let them know you turned away work. It’s legit. You turned away work, let your client know right. That you did. ’em A favor. Now it should be expected, but you should at least let them know what’s going on. That way. They know that you’re in demand, right? They won’t take you for granted. Right? And you could use it as an opportunity to ask for referral, to remind them that they need to up their budget like this. So they were going to, they kind of sort owe you a little one at this point right now, another thing that you could do is with the potential new client is you could refer them to someone else.

Erik J. Olson (06:44):

So if you have someone, another agency, another company like yours, that you could send them over to, you could refer them. That takes care of the other agency that takes care of this prospective client. And frankly, if you wanna work out a commission deal where you get like a finder’s fee, great, knock yourself out. You can make a few bucks, but then also you can go to that prospective client. You can have a discussion with them and say, Hey, I appreciate you reaching out, but I can’t work with you cause I’m conflict. But do you know of anyone else in these other industries, practice areas, service areas that you could connect me with? I would’ve really appreciate it. Ask for a referral. Why not? Why not, man? You’re being honest with them. You’re telling ’em, I’d love to work with you, but I can’t. They need to know that upfront.

Erik J. Olson (07:29):

You’re doing them a solid right? You could connect them with another company like yours that can help them out. You can do all sorts of things, but ask for referrals. So you can at least benefit in at least three different ways. One, let your client know that you turn the work down. Two connect. Another company like yours, two that perspective client and three contact, a prospective client tell ’em you can’t do the work with them, but can you get a referral to someone else like them? So some things to think about, I hope that helped. If you have any questions, reach out to me on Instagram. I hang out there @erik.j.olson. That’s E R I K dot J dot O L S O N.

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About The Hosts

  • Erik J. Olson is an award-winning digital marketer & entrepreneur. The Founder & CEO of Array Digital, he is also the host of the Journey to $100 Million Flash Briefing and daily podcast, and the organizer of the Marketers Anonymous monthly meetups.

  • Kevin Daisey is an award-winning digital marketer & entrepreneur. He started his first company when he was just 23, and is the Founder & CMO of Array Digital. Kevin is the also the co-host of the Journey to $100 Million Flash Briefing and daily podcast, and the co-organizer of the Marketers Anonymous monthly meetups.

Website Design, Search Engine Optimization (SEO), Online Advertising, Social Media & Digital Marketing.
© Array Digital LLC

Website Design, Online Advertising, SEO, Social Media & Digital Marketing.
© Array Digital LLC