In this episode, hosts Peter Kang and Sei-Wook Kim dive into one of the most challenging but necessary decisions agency leaders face: when and how to let go of clients. As agencies grow, not every client remains a good fit. Peter and Sei-Wook break down the key factors to consider when evaluating your client roster, from strategic alignment and profitability to relationship quality and payment behavior.

They share real-world examples from their own experiences at Barrel, including how shifting their focus to Shopify-led projects meant parting ways with clients on other platforms. They also tackle tough topics like dealing with unprofitable accounts, managing difficult client relationships, and knowing when to walk away from a high-risk engagement.

Whether you're struggling with client concentration, operational overload, or simply want to build a more intentional client portfolio, this episode offers a practical framework for making proactive, strategic decisions that support long-term agency health.

Key Moments

1. Why “pruning” your client list is essential for sustainable growth.

2. How to assess strategic fit using your Ideal Client Profile (ICP).

3. When to prioritize profitability over revenue.

4. Evaluating account expansion potential vs. dead-end relationships.

5. The role of relationship quality and access to decision-makers.

6. Red flags in client payment behavior and how to respond.

7. Managing operational load and protecting team morale.

8. Weighing the marketing value of a client (case studies, brand credibility).

9. Understanding risk factors like client concentration and legal exposure.

10. Knowing when to bow out of a project, even after it’s started.

Real Talk Takeaways

1. Not all revenue is good revenue. Unprofitable clients can drain resources and morale.

2. Strategic fit matters. Align your client roster with where you’re going, not where you’ve been.

3. Payment behavior is a leading indicator of respect, and risk.

4. Protect your team. Difficult clients can cause burnout and turnover.

5. Sometimes the best business decision is to fire a client.

6. Leaders must own the tough calls. Don’t push them down to the team.

7. Risk isn’t always financial, reputational and legal risks can be just as damaging.

Timestamps

00:00 – Welcome to Agency Habits

00:19 – Why agencies need to regularly assess client fit

01:35 – The tree-pruning analogy for agency growth

01:56 – Factor #1: Strategic fit & Ideal Client Profile (ICP)

03:46 – Barrel’s experience with platform fragmentation

04:45 – Factor #2: Gross margin & profitability

06:15 – The trap of “ossified” unprofitable relationships

07:31 – Factor #3: Account expansion potential

08:55 – How to allocate resources based on growth potential

10:18 – Factor #4: Relationship quality & access to decision-makers

12:19 – When bad behavior justifies ending a relationship

13:21 – Factor #5: Payment behavior & red flags

15:06 – Why agencies aren’t banks—setting payment boundaries

17:32 – Factor #6: Operational load & team impact

20:43 – How to give feedback to high-maintenance clients

22:33 – The leadership decision to protect the team

23:41 – Factor #7: Case study & marketing value

25:28 – When you can’t talk about the work (e.g., Apple)

26:38 – Factor #8: Risk (concentration, reputation, legal)

28:14 – Reputational risks and company values

29:26 – When to walk away from an oversold project

30:41 – Wrap-up: Making proactive decisions for growth

Notable Quotes

“They are the people that are paying you now and are supporting your business, but that doesn’t mean they’re the right fit for the next phase of your growth.”

“Agencies are not banks. We’re not here to lend unlimited credit to our clients.”

“If you don’t make the decision, it could cause burnout turnover. If you do make a quick decision, you can build a lot of trust.”

“Not every client needs to be a case study, but every client should align with your values and operational sanity.”

“Sometimes it’s better to bow out and take the hit immediately versus a much bigger problem down the road.”

Links & Resources

Peter Kang on LinkedIn: https://www.linkedin.com/in/peterkang34/

Sei-Wook on LinkedIn: https://www.linkedin.com/in/seiwookkim/

AgencyHabits Website: https://www.agencyhabits.com/

AgencyHabits on LinkedIn: https://www.linkedin.com/company/agencyhabits/

Barrel Holdings Website: https://www.barrel-holdings.com/

Barrel Holdings LinkedIn: https://www.linkedin.com/company/barrel-holdings/