Jacob Baadsgaard had 650 clients. He let 450 of them go.
That was 30% of his agency’s revenue, gone on purpose. Disruptive Advertising was doing somewhere around $24 to $25 million a year at its peak, and Jacob told me on the podcast that he hit a point where he thought, “If we scale this any more, I might die.”
Today Disruptive does about $18 million a year with roughly 170 active clients and about 90 people. They turn away more than 80% of the companies that come to them, they have more than 1,000 reviews, and some clients have stayed for over twelve years. Jacob says the agency is healthier now than when it was bigger.
We covered a lot in 54 minutes: which clients to keep, why the classic retainer is dying, the hires and numbers that got him from side hustle to $18M, and the retention flywheel behind all those reviews. It’s all here in one place. Jump to whatever you need most.
What’s Inside
- Why an $18M agency fired 450 clients
- How to decide which clients to keep
- The set-it-and-forget-it retainer is dying
- The replacement: rolling quarterly scope
- The hires that took Disruptive from $0 to $5M to $20M
- Budgets, the weekly scorecard, and meeting rhythm
- 1,000+ reviews: the credibility flywheel
- Retention is won in the first 90 days
- The burnout test every agency owner should take
- Frequently asked questions
Why an $18M Agency Fired 450 Clients
Most agency owners think about growth as “more clients.” More logos, more retainers, more MRR. Early on, that’s right. You need cash flow and you need reps.
But somewhere along the way, the client count stops being an asset and starts being a liability. Jacob’s version of that moment was brutal: 650 clients, a $4 million-a-year whale on the books, a nice COVID bump, and a business that was eating him alive.
“We wanted to get more dialed in on who we really want to work with and serve… We’ve gotta make some hard decisions so that this is sustainable and scalable.”
Notice what he didn’t say. He didn’t say those clients paid too little or were annoying. He said the agency couldn’t serve them the way it wanted to. Jacob’s mission has always been to “see and activate greatness,” and for those 450 clients, Disruptive wasn’t doing that.
“That’s why we moved on from 450 clients, ’cause we weren’t doing that for them.”
That turns a scary financial decision into a simple question: are we actually changing this client’s business? If not, you’re both paying a price. The client pays you for activity, and you pay with your team’s energy and your own sanity.
What a great-fit client looks like
Disruptive has worked with a garage door company owner named Carrie for twelve years. She went from running the business out of her home to multiple exits and becoming “the regional powerhouse that everyone wants to be when they grow up.” That’s the kind of relationship that funds a seven or eight-figure agency.
When you know what your Carrie looks like, everything changes. Your marketing gets sharper, your sales process stops closing anyone with a pulse and a credit card, your clients stay for years, and your team gets to do work they’re proud of.
How to Decide Which Clients to Keep
You don’t need 650 clients to have this problem. I’ve seen agencies at $30K a month with three clients that are quietly killing them. Here’s a simple audit built on what Jacob shared.
- Write down your five best client relationships ever. Not the biggest checks. The ones where you genuinely changed the business. Look for patterns: industry, size, budget, owner mindset, how fast they decided, how much they trusted you.
- Score every current client against that profile. Are we producing results we’d put in a case study? Does this client fit our best-client pattern? Is the team energized or drained by the account? Three yeses is a keeper. Three nos is a conversation you need to have.
- Check the business problem, not just the marketing problem. Sometimes the playbook that works 80% to 90% of the time fails because the client has “other business issues that marketing isn’t going to solve.” You can’t market your way out of bad operations or an owner who won’t decide.
- Plan the cash flow before you cut. Map out what your team and overhead look like at the smaller revenue number first. (More on Jacob’s percentage-of-revenue budgets below.)
- Tighten the front door. Firing clients is pointless if you sign the same type next month. Your sales process needs a real qualification step, and your marketing should speak to the client you want, not everyone with a website.
This is exactly what we teach inside the Seven Figure Agency Roadmap: become the obvious choice for a specific type of client, and the business gets simpler at every stage.
The Set-It-and-Forget-It Retainer Is Dying
“You’re gonna get 80% of the value you can provide as an agency in the first three to six months, and then spend all your time convincing them why continuing to optimize it makes sense.”
Jacob wasn’t calling out other agencies there. He was calling out his own. For most of its 14 years, Disruptive was known for one thing: paid search for companies with big Google budgets. A couple of years ago he realized that model wasn’t going to survive.
The problem is that a single channel can only get so good on its own:
“You can only get a paid campaign to perform so much better on its own. But if you can’t get the website converting better, you’re limited on how you can grow paid ads.”
So the agency does great work for a few months, hits the ceiling, and the relationship turns into a monthly justification exercise. The client asks what they’re paying for. The agency writes longer reports. Eventually the client cancels. Jacob’s take: “If that’s your model, which has been a lot of the agency models to date, you’re not gonna make it.”
Why AI speeds up the collapse
AI makes execution cheap and fast. “Where AI is killing everybody right now is if you execute faster on the wrong things.” If your value is output, AI just lets you prove you’re busy without proving you’re valuable. The agencies that win get the strategy right first, then use AI to execute it ridiculously fast. Jacob says his own marketing team now turns around in days and weeks what used to take months and quarters.
The Replacement: Rolling Quarterly Scope
Here’s what Disruptive does now. Any agency can adapt it, whether you serve plumbers, dentists, or SaaS companies.
- Clarify the business goals before touching marketing. Most owners haven’t defined their goals clearly enough to “mathematically back into” a marketing strategy. Jacob’s book lays out six vision questions (why beyond money, where in ten, three, and one years) and four strategy pieces: the math, the target customer, the customer journey, and the measurement plan.
- Start at the bottom of the funnel. “If you don’t have a high-converting website, if you go drive more traffic, that’s not going to help you.” For local service agencies this is huge. If your plumbing client’s phones aren’t answered, more SEO traffic just means more leaks.
- Shift scope every quarter. Once one part of the funnel performs, it goes into maintenance and the team moves to the next growth lever. “That’s what keeps scope high. That’s what keeps retainers higher… So no justification is needed.”
- Turn account managers into fractional marketing directors. Their job is to make sure the funnel is architected, tracked, and optimized in the right order. Load is set by revenue, not client count: juniors might handle 15 to 20 smaller clients, the most senior three or four big ones.
- Review quarterly, step back yearly. Sign off on strategy at onboarding, adapt every quarter, and take a big step back once a year to check everyone is aimed at the same North Star.
Does this mean you shouldn’t niche? Not at all. Jacob thinks industry specialization survives far better than channel specialization. As Disruptive grew, he split into B2B, DTC ecommerce, and local business teams that run almost like separate franchises. That lines up with what we teach: pick an industry and be the growth partner for those businesses, not the “Facebook ads guy.” Our member Cris Rodriguez built GrowPro to 600+ clients that way in the martial arts niche.
The Hires That Took Disruptive From $0 to $5M to $20M
Up to $5M: get out of client operations
Jacob loves marketing and sales. Operational follow-through he can do, but doesn’t love. So his first key hires were people who could manage client relationships really well: project-manager-minded leaders who own “here’s what we do, here’s when we do it, here’s how we do it.”
“That’s probably what got us to five million because then I could put all of my energy into growth and sales.”
He’s clear this order isn’t universal. Some founders need a sales leader first. “It’s kinda like know thyself.” Hire for the part of the business you want off your plate fastest.
$5M to $20M: grow sales leadership instead of buying it
Jacob hired three expensive, experienced sales pros who were supposed to show him how it’s done. All three failed for the same reason: “They set poor expectations ’cause they didn’t understand the product very well.” Overpromising in sales shows up as churn three months later.
What worked was the opposite. He hired someone young and hungry as a sales assistant to handle follow-through and handoffs. Over about 18 months, that person took on small deals, then mid-market, then large deals, and eventually got their own assistant. Operational leadership plus homegrown sales leadership is “frankly what allowed us to scale from, like, five to twenty million.”
Disruptive never built a big outbound machine. They scaled inbound by doing for themselves what they do for clients: content, their own ads, a YouTube channel, steady LinkedIn posting, and a strong presence on agency ranking sites. They spend about 8.5% of revenue on their own marketing. Jacob thinks most agencies under-invest here, and I agree.
The marketing leader problem
Jacob went through five marketing leaders in eight years. When the sixth, Chad, raised his hand and said “I might not be the right guy for the job,” Jacob realized the common denominator: “Either I’m really bad at hiring or I’m not setting these people up for success. Either way, it kinda points back to this guy.”
So he gave Chad real clarity on the vision, showed him what a great client looks like, and changed the question from cost per lead to this one:
“What if you could spend ten to twenty thousand dollars to get an awesome client? How would you do marketing differently?”
Chad came back with a plan, they signed off on the risks and budget together, and a year later Chad knew he was the right guy. If you’ve churned through marketing hires or account managers, the issue might not be the hire. It might be that nobody gave them a clear target.
Budgets, the Weekly Scorecard, and Meeting Rhythm
Budget everything as a percentage of revenue
A fractional CFO helped Jacob set every department’s budget as a percentage of revenue. He targets a 15% to 20% profit margin. At 20%, “we’re typically running a little hot and people are burning out.” Below 15%, “it’s not feeling worth it from a cash flow perspective.” He keeps 0% to 5% as his own R&D fund for new services.
The real benefit is ownership. Each department leader owns their P&L. If revenue grows, they have more to spend. If it shrinks, they know exactly what to cut. That structure is what made the 450-client cut survivable.
The weekly scorecard
- Marketing: first-party audience growth and MQLs (marketing qualified leads)
- Sales: SQLs, new pipeline, and closes. “If you generated no pipeline this week, four weeks from now, we’re not gonna have closes either.”
- Key accounts: every client coded gold (growth opportunity), green, yellow, or red (might lose them in the next 60 days)
- Cash: accounts receivable. Disruptive bills up front, not net 30.
The meeting rhythm
Executive team weekly, full leadership monthly, whole company quarterly, plus a written weekly update from every leader. It’s influenced by EOS. Jacob calls his version VSET (vision, strategy, execution, team).
1,000+ Reviews: The Credibility Flywheel
“The most important thing to do to get new clients is to get great results from your existing clients.”
The step most agencies skip is documenting those results: a review that verifies the result, and a case study that shows how you got it (anonymized if needed). Jacob thinks Disruptive may be the most reviewed agency in the country, and he’s clear on why it matters:
“The moat in agency land, which has no barriers to entry, is credibility. Credibility to drive results for someone like you, predictably and consistently.”
Anyone can start an agency tomorrow. What a competitor can’t copy is a thousand reviews and a library of case studies from businesses exactly like your prospect. Every prospect is really asking, “Do you know my specific pain point, and have you solved it for someone like me before successfully?” If you serve one industry, every case study answers that question.
How Disruptive makes reviews actually happen
- Targets and rewards. Yearly goals for reviews and case studies, with individual and team rewards big enough to matter.
- Show the team what’s in it for them. Published results build “your resume, marketability, and the wages that you can command in the industry.”
- Templates and a clean handoff. The account team flags the win and confirms the client will talk. Marketing writes it. Nobody on delivery has to become a copywriter.
Retention Is Won in the First 90 Days
The flywheel only spins if clients stay long enough to get results, so Disruptive puts almost all of its process into the first three months.
- Accept that both sides posture in sales. Disruptive guarantees results in the first 90 days, and both sides can opt out in that window.
- Be okay with some early churn. “I actually think sometimes it’s just okay to have churn,” as long as you executed well. They can tell about 95% of the time within 90 days.
- Go after quick wins. “My hair’s on fire, let’s put the hair out of fire first.”
- Deliver a 12-month plan before day 90. What it takes to hit the client’s goals, how much budget goes to marketing, media, and agency, and what comes first. “That’s what gets us thinking from trying each other out to long-term focus.”
- After 90 days, run the QBR rhythm. Jacob says there’s “very little process” after that. Quarterly reviews and shifting scope drive the expansion.
If you use our traffic light system for client health, the gold/green/yellow/red codes will look familiar. Gold is a smart addition: it flags clients ready to grow, not just ones at risk. The retention chapter of the Seven Figure Agency Roadmap covers the full system.
The Burnout Test Every Agency Owner Should Take
I asked Jacob for his one piece of advice for agency owners trying to get to the next level. It had nothing to do with tactics.
“What would you keep doing about what you’re doing today, even if you didn’t get paid for it? And if the answer is none of it, you’re on the path to burnout.”
When Disruptive works with businesses it can’t help, he said, “my life energy is drained out of me, and I feel like a zombie.” When clients tell him “I love my business again,” that’s why he keeps going, and why he hasn’t sold.
I’m not going to BS you. A lot of agency owners hit $1M or $2M and they’re miserable. Not because the business is failing, but because they built a client list full of people they can’t really help. More revenue won’t fix that. Better clients, a better model, and a real operating rhythm will.
Watch the full interview with Jacob above, and grab his book The Indispensable Marketer for the complete framework.
Frequently Asked Questions
Should an agency ever fire a paying client?
Yes, when the client doesn’t fit the profile you can get results for. Disruptive Advertising let go of 450 of 650 clients, about 30% of revenue, and got healthier and more focused as a result.
Why are agency retainers getting harder to keep?
Most single-channel retainers deliver most of their value in the first three to six months, and then the agency spends its time justifying the invoice. Rolling quarterly scope, where the work shifts to the client’s next bottleneck, keeps the value in line with the retainer.
What should an agency owner hire first to scale?
Hire for the part of the business you most want off your plate. Jacob Baadsgaard hired client relationship and project management leaders first, which freed him to focus on sales and got Disruptive to $5M.
What profit margin should an agency run?
Disruptive targets 15% to 20%. Above 20% the team burns out, and below 15% the cash flow doesn’t justify the risk.
What metrics should an agency review weekly?
Marketing audience growth and MQLs, sales pipeline and closes, key account health on a gold/green/yellow/red scale, and accounts receivable.
How do I get my team to collect reviews and case studies?
Set yearly targets with real rewards, show the team how published results build their careers, and give them templates so marketing does the writing.
Why are the first 90 days so important for retention?
That’s when both sides learn if the fit is real. Clients who get quick wins and a clear 12-month plan in the first 90 days tend to stay for years.
Build an Agency You Actually Want to Run
Whether it’s a client list that drains you, a retainer model that churns, or a plateau you can’t break, you don’t have to figure it out alone. Book a free strategy session and we’ll map out which clients to keep, how to package your services, and the next hire that gets you to the next level.
