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Oliver here (I wrote the article, and run Silktide). It's early days for us, so I can't speak from years of experience, but so far there are marked differences
by oliveremberton 15y ago
Oliver here (I wrote the article, and run Silktide).
It's early days for us, so I can't speak from years of experience, but so far there are marked differences for us:
1. We have a lot more customers. Before one or two of our web designer clients could hold us ransom over a big cheque - the sort of thing we needed to make payroll. Now we'd need a mass exodus of customers for the same to happen, and usually that would be because we screwed something up (i.e. it's fair).
2. Customers now have clearer expectations. Web design customers can expect all sort of things which they consider reasonable, and don't understand why they're not (e.g. supporting a website 5 years after you built it, changing their business fundamentally mid project, expecting 'as many designs as it takes' to get right etc). I know you can and should educate your customers, but essentially you're dissatisfying them. With products, generally people pay a fixed amount to use a thing for a time. If it doesn't work, we refund them. Simpler and happier all round.
I totally agree with your last point - if you can scale it pays better. So far, the jury is out on that one for us, but let's see where it goes...
- peteboyd 15y agoNumber of customers is critical. When web design studios only have a few customers and one makes up a large percentage of revenue (ex: 10% or more), then you are definitely at the clients whim. However, if an agency has a lot of customers, each with only a percent or less of total revenue, then its a much more stable platform. You can decline representation of certain clients and they do not effect the total revenue. Of course, a product line might be better. All customers under one pricing model, customization is limited, and it scales easier. Good stuff.
- oliveremberton 15y agoWe had a lot of web design customers (about 200) but you can only work on so many projects at a time - we would typically have 30-40 in our pipeline, but only 10 or so would finish each month. And those projects aren't even in size - we'd normally have a couple big ones accounting for over half our income. So even with 200 customers our income came mostly down to a handful of customers each month.
- peteboyd 15y agoYeah, it's tough when a few make up a large percent of the business. You definitely have to drop everything to help them. I think our top 50 clients make up 25% of the business. Top 100 about 50% and the other 400 the rest. So we are less beholden to one large client as maintenance, hosting, SEO, PPC, and redesigns help balance all the new projects that we would need to sign.