What Can King Kong Teach You About The Extreme Dangers of Gorilla Clients?

In the story of King Kong, a filmmaker journeys to a remote island to document the legend of a gigantic gorilla-like ape. There, Kong is captured and brought to New York for public exhibition. But he escapes and goes on a violent rampage, climbing the Empire State Building. The story ends in tragedy with fighter pilots shooting King Kong and the ape falling to his death.

While it may seem obvious that the gigantic gorilla would eventually escape, the capturers failed to recognize the extreme dangers and take adequate precautions. Like the story of King Kong, a giant gorilla exists within many firms, but most are not taking the proper precautions either.

Identifying a Gorilla Client

The gorilla in your agency is a client representing 25% or more of your gross revenue. Also known as a client concentration issue, gorilla clients consume more than their fair share of your resources and can ultimately be the detriment the agency’s ability to survive.

To identify whether you’re dealing with a ‘gorilla client,’ you must ask yourself the following questions:

• Does over 25%+ of my agency’s revenue come from this one client?
• Do I allow scope creep and serve them at a different level than my other clients?
• If I were to lose the revenue from this client, would I have to face layoffs or decrease my own pay?

If you answered yes to the above, know you’re not alone. RSW/US’s Agency New Business Report shows the problem is growing. The report finds that in 2020, 17% of agencies stated they had a gorilla client. Only one year later, the number rose to 29%.

29% of Agencies Have Gorilla Clients

But how concerned should you really be? After all, you have to pay the bills, and this client certainly helps.

Risks of a Gorilla Client

Like King Kong escaping and going on a rampage, your gorilla client can leave and put you at risk.

When a single source of work accounts for over 25% of your gross profit, this is a red flag. If the client fires your firm, do you have a backup plan? Often, agency leaders are forced to lay off team members or significantly cut back on their salaries to adjust.

And wait! Before you think you can just go out and get more clients to replace them, it’s not that easy. Your gorilla client’s revenue made you complacent for too long. Your business development program suffered, and now you’re behind the eight ball.

Beyond the financial risks are resource risks. Your agency likely over-services this client, allowing scope creep on a regular basis. They can demand anything they want, leaving profit margins, team morale, and the ability to service other more profitable clients at an all-time low.

If your gorilla client exceeds 35% of your gross profit, you need to call in the fighter pilots as they did for King Kong. Research shows that when a client representing 35% or more of their revenue dumps the agency, half do not survive.

4 Steps to Fixing Your Gorilla Client Problem

So how do you fix the problem? I’ve outlined 4-steps you can begin to take immediately to safeguard against a gorilla client problem.

Step 1: Calculate Your Client Concentration

Generally, you want to look for clients who account for more than 25% of your agency’s revenue. Make a list of your clients from largest to smallest in descending order.

Now, look at the size of your largest client vs. the revenue they bring in. Ensure they do not account for more than 25% of your total revenue. Note also the resources they require. Too often, this client concentration issue results in your other clients getting less than what they expected from your agency because your resources weigh too heavily on the gorilla client.

Step 2: Outline a Plan

If you find you do have a client(s) representing 25% or more of total revenue, don’t panic. The next step is to outline a plan.

First, set milestone targets intended to reduce their percentage.

These targets will vary depending on what your client’s concentration is. If your gorilla client makes up 25% of your revenue, you may want to set a goal of decreasing it to 20% over the next 60 days, with the ultimate goal of bringing it down to under 15% in 120 days.

If the client makes up for more than 30%, your goals will need to extend further as it will take more time.

Next, outline a plan of action should you lose your gorilla client.

This is your “sky is falling – doomsday – this is how it ends” plan. It’s uncomfortable to think about, but the best thing you can do right now is to solidify an if/then plan of action should the worst occur.

The plan may include:

• Layoffs.
• Late payments to vendors.
• A personal salary decrease.
• A spending freeze.
• Significant cost-cutting measures.

By making the plan now while you still have the clients, you can rest assured that while you’re making strides to reduce their revenue percentage in your agency, you’re also ready for anything.

Step 3: Look for Ways to Upsell Your Existing Clients

The idea here is rather than trying to immediately sign more clients to offset the percentage, which can take a lot of time and resources (especially if you’re starting from scratch), offer more value to your existing clients for an additional fee.

Organic growth driven by your account team is ‘lower hanging fruit’ and will decrease the risk by a few percentages quicker and with less effort than net new clients.

Step 4: Have a Proactive Outbound Approach

But organic growth won’t be enough, nor will it solve the problem long-term. The main threat of a gorilla client is the loss of a significant portion of your income should they choose to drop your agency, but this danger can be resolved.

How? By having a pipeline full of net new prospective clients developed through outbound business development.

Outbound sales is the proactive engagement of prospects through strategic cold calling, cold email, and social media to generate a predictable pipeline of opportunities with target companies.

It allows your firm to remain in control of the type of companies you want to work with, what type of work you want, and manage the number of opportunities as opposed to word-of-mouth, which you have little to no control over.

So how do you “win” with outbound?

Outbound creates a repeatable process that enables you to achieve predictable results. Waiting on the phone to ring only lends itself to an agency stuck in feast or famine mode, making staffing, budgeting, and scaling nearly impossible.

Long-term, stable growth requires a predictable system that allows you to project future growth accurately by leaning on regular lead generation and new business outcomes.

What about you?

If you knew right now that your gorilla client would fire your agency tomorrow, but you had a thriving pipeline of potential new clients to diversify your client roster and replace them, would you be as concerned? No.

The concern only comes because you’ve catered to them too long and abandoned all business development. Therefore, the best thing to safeguard your agency from failure due to the loss of a gorilla client is to maintain a healthy and full pipeline through outbound.

Conclusion

Keeping gorilla clients is as dangerous as capturing King Kong. These clients often consume more than their fair share of resources and can be an overall detriment to the agency’s ability to survive.

If you don’t take your client concentration issue seriously, your firm may be the one falling to its death. But with proper precautions, you can take back control of your agency and significantly decrease the impact they have long-term.

A proactive outbound new business approach creates a repeatable process that enables you to build and maintain a full pipeline. Over time, you’ll win new clients and be less reliant on the gorilla. Should the gorilla leave, you’ll have enough leads to fill the gap quickly and save your firm.

If you’re interested in learning more about outbound business development and how to land 6- and 7-figure opportunities predictably to safeguard against the dangers of a gorilla client, check out our Free Agency Growth Keys Masterclass.