Two businesses with identical revenue and profit can have vastly different valuations. A company that runs independently is a valuable, sellable asset with a high multiple. One that requires the owner's constant involvement is just a high-stress job, with wealth accumulating only through taxed personal income.

An agency owner found that saying 'yes' to every client request created a confusing 'Frankenstein of services.' He simplified his business to focus solely on Facebook ads—the service that delivered the best results and longest client retention—which dramatically improved his agency's focus and efficiency.

In pay-per-performance models, clients are more likely to churn from unexpected high bills than from mediocre results. Proactively communicating spending and setting budget expectations is crucial for retaining clients, as sticker shock breaks trust faster than anything else.

The primary barrier to properly valuing creativity in advertising is the industry's reliance on a service-based, billable-hour model. This is a fundamental flaw that prevents creative work from being valued on its impact and outcome, unlike in the tech industry.

As agencies adopt AI to increase efficiency, clients will rightfully question traditional pricing models based on billable hours. This creates an "arbitrage" problem, forcing agencies to redefine and justify their value based on strategic insight and outcomes, not just the labor involved.

Simply "servicing" an account by fulfilling orders makes you a replaceable commodity. To become indispensable, you must proactively bring insights and create new growth opportunities for your client. This shifts your role from a reactive vendor to a strategic partner, making you "sticky" and invaluable to their business.

An agency's churn rate and ultimate sellability are direct reflections of its clients' volatility. To build a valuable, stable business, you must serve a stable, successful customer base. Serving other volatile small businesses creates an inherently volatile and unsellable asset.

Unlike law or accounting, marketing is a "fat-tailed" domain where a few big ideas generate most of the value, often for years. The shift to hourly billing is catastrophic because it rewards incremental effort, not the billion-dollar ideas that create lasting value but may have taken little time to conceive.

High churn in agencies serving small businesses often stems from the clients' own operational volatility, not the agency's performance. The most effective solution is to move upmarket and serve larger, more stable companies that have their internal processes figured out.