The Miserable Middle

As an agency you have two routes to success:

High-ticket, high-touch services to a few client, which provide great margins and often great clients with low operational overheads.

Low ticket, cheap services with near zero cost to deliver, sold to many clients.

The miserable middle is when you charge more than low ticket, but end up providing custom, high-touch services, very demanding clients, ever-expanding scope creep, high operational drag and almost no margins left for the comp for the agency to operate on.

The risk with high ticket is that it becomes high touch. You are compensated well and the quality of the customer is typically great, so it’s a trade that you can take. Also you don’t need many of them so you don’t need to advertise as much.

Low ticket implies that you need very strong distribution because the formula only works when you can sell it to many people.

When you’re starting out, you don’t have distribution and so the natural path is to go high ticket first.

Even if you have strong distribution, there is a risk that the cost to deliver creeps up and eats your margins. A single client here can blow up scope so you need to have systems in place to prevent that.

Sell expensive to a few, until you have enough cash to sell to everyone (invest in distribution).