Why Most LSPs Don’t Actually Know Their Best Clients

Ask any translation agency owner who their best clients are, and they'll rattle off names immediately.

"Oh, definitely Company X. They're our biggest account."

"Company Y for sure. We've worked with them for five years."

"Company Z. They send us tons of projects."

But here's the uncomfortable question: are those actually your best clients, or just your biggest, oldest, or busiest?

Because here's what we've noticed working with hundreds of agencies through Awtomated: most LSPs are optimizing for the wrong clients. They're pouring energy into relationships that look impressive on paper but are quietly destroying their profitability and sanity.

Let's talk about why this happens and how to figure out who your best clients actually are.

The Revenue Trap

The most common mistake is equating "biggest revenue" with "best client."

It makes intuitive sense. Client A pays you $100K annually. Client B pays $30K. Obviously, Client A is better, right?

Not necessarily.

Client A might generate $100K in revenue, but if they require constant revisions, have complex approval processes that delay projects, demand rush work at regular rates, negotiate discounts on every project, and pay 60-90 days late, what's the actual profit?

Factor in the project management time, the rework hours, the cash flow strain, and the stress. That $100K might cost you $75K in actual expenses and headaches. Net profit: $25K.

Meanwhile, Client B pays $30K, accepts standard rates, pays within 15 days, rarely needs revisions, and their projects are straightforward. Total costs: $15K. Net profit: $15K.

Client B is smaller but more profitable per dollar of revenue. Yet most agencies would tell you Client A is their "best" client because the revenue number is bigger.

The reality: Revenue is vanity. Profit is sanity. Cash flow is reality.

Your best clients aren't necessarily your biggest. They're your most profitable relative to the effort required.

The Sunk Cost Trap

"We've worked with them for eight years" is not a reason to keep prioritizing a client.

Yes, long relationships have value. Institutional knowledge, trust, and predictability matter. But longevity alone doesn't make a client good.

We see agencies sticking with legacy clients who:

• Demand rates that made sense in 2015 but are below market now
• Require outdated workflows because "that's how we've always done it."
• Take up disproportionate management time because they won't adapt to modern systems
• Have an internal bureaucracy that makes every project painful

The agency keeps prioritizing them because "they've been with us forever." But that long relationship is costing more than it's generating.

The reality: Past value doesn't justify current investment. Every client should justify their priority based on the current reality, not historical relationships.

The Volume Trap

"They send us so many projects," feels like a good thing. High volume means steady work, right?

But volume without profit is just staying busy while going broke.

We've seen agencies with clients who send 100+ small projects monthly. The agency team is constantly busy. They feel productive. But when you actually calculate it:

• Each project requires quotes, assignments, tracking, delivery, and invoicing
• Small projects have high overhead relative to revenue
• Margins are thin on small work
• The team is maxed out on volume, so they can't take higher-value projects

They're running at full capacity but barely profitable. Meanwhile, they're turning away opportunities for larger, more profitable projects because they're "too busy."

The reality: Volume keeps you busy. Profit keeps you in business. Sometimes, less volume with higher-quality clients is better than high volume with low-margin clients.

What "Best Client" Actually Means

Okay, so if revenue, longevity, and volume aren't the right measures, what is?

Your best clients have these characteristics:

1. High profit margin relative to effort: They pay fair rates, accept standard turnarounds, and don't require excessive revisions or management overhead. The profit per hour of work is strong.

2. Payment reliability: They pay on time or early. You're not chasing invoices. Your cash flow is smooth because of them, not stressed.

3. Operational ease: Working with them doesn't require heroic effort. Projects follow standard workflows. Communication is clear. Expectations are reasonable.

4. Growth potential: Their business is growing, which means more work for you. Or they refer other clients. They're not just steady, they're expanding.

5. Mutual respect: They treat your team professionally, value your expertise, and see you as a partner rather than a commodity vendor.

Notice what's not on this list: size, industry prestige, or how long you've worked together.

A $20K client with all five characteristics is better than a $200K client with none of them.

How to Actually Identify Your Best Clients

Most agencies operate on gut feel. "This client feels good," or "that client is a pain." But feelings aren't data.

Here's how to systematically figure out who your best clients actually are:

Step 1: Calculate true profitability by client

Revenue minus direct costs (translator payments) gives you gross profit. That's a start. But you also need to account for:

• Project management time (how many hours does this client consume?)
• Revision time (how often do their projects need rework?)
• Payment delays (cash flow costs money)
• Rush project frequency (rush work disrupts other projects)

Tools like Awtomated track this automatically, project time, revision frequency, payment cycles, so you can actually see profitability, not just revenue.

Step 2: Rank clients by profit margin, not revenue

Once you know true profitability, rank clients by profit margin percentage. Which clients generate the most profit relative to the revenue they bring?

You might be shocked. Your "best" clients might not even crack the top 10.

Step 3: Factor in operational cost

Some clients are just harder to work with. Complex approval processes, unclear briefs, constant last-minute changes, and difficult stakeholders.

Even if the profit margin is okay, if a client consumes disproportionate management time, that's a hidden cost.

Create a simple "ease of working with" score for each client. Factor this into your evaluation.

Step 4: Assess growth and referral potential

Some clients are profitable now and growing. Others are profitable now but shrinking or static. Prioritize clients with expansion potential.

Also track referrals. Some clients actively recommend you to others. That's massive value beyond their direct revenue.

Step 5: Look at payment behavior

Track average days to payment by client. Clients who pay fast improve your cash flow, which has real financial value. Clients who pay slowly strain your finances.

A client who pays in 15 days is more valuable than one who pays in 60, even if the 60-day client has higher revenue.

What You'll Probably Discover

When agencies do this analysis properly, they usually find:

Their "best" client is actually mid-tier or worse. The big prestigious account that they brag about is expensive to service, slow to pay, and demanding. The actual best clients are often smaller, less flashy accounts that are just really easy to work with and highly profitable.

They're underpricing good clients and overservicing bad ones. Good clients are getting charged fairly, but could probably pay more. Bad clients are paying "big client" rates but costing more than they generate.

20-30% of clients are actively unprofitable. They're not breaking even. They're costing money. The agency is subsidizing these clients with profits from good clients.

Their fastest-growing segment isn't where they're focusing effort. They're chasing the declining industry or client type while ignoring where their actual growth is coming from.

This realization is uncomfortable. But it's also incredibly valuable because now you can make strategic decisions based on reality.

What to Do With This Information

Once you know who your best clients actually are, you can optimize your business around them:

Double down on your actual best clients. Give them priority access, dedicated project management, and better terms. Make sure they know they're valued. Invest in these relationships because they're genuinely profitable and easy.

Raise prices on operationally expensive clients. That "big" client who's actually a pain? They need to pay more or change their behavior. Raise rates to match the actual cost of serving them. Some will accept. Some will leave. Either outcome is fine.

Fire your worst clients. Yes, really. The clients who are unprofitable and operationally painful need to go. You're better off with the capacity freed up to pursue better clients.

Clone your best clients. What do your actual best clients have in common? Industry, size, project type, communication style? Go find more clients like them. Your best growth comes from replicating your best relationships, not chasing the biggest logos.

Adjust your marketing and positioning. If your best clients are mid-market tech companies, stop trying to land enterprise contracts with complex procurement. Market to more mid-market tech companies.

How Technology Helps (And Hurts)

Most agencies don't do this analysis because tracking the necessary data manually is overwhelming. Calculating project management time per client? Tracking revision frequency? Measuring payment cycles? It's possible in spreadsheets, but exhausting.

This is where LSP management platforms like Awtomated are valuable, they automatically track the metrics you need to evaluate clients properly. Time per project, revision rates, payment behavior, profit margins. The data is there without manual tracking.

But here's the trap: having the data doesn't mean acting on it. We've seen agencies generate beautiful profitability reports, discover their "best" client is actually terrible, and then... keep prioritizing them anyway because change is uncomfortable.

Technology gives you visibility. You still have to make the hard decisions.

The Client Portfolio Approach

Think about your client base like an investment portfolio. You want diversification and quality, not concentration in a few big bets.

A healthy LSP client portfolio has:

• Multiple clients in the top tier (high profit, easy to work with, growing)
• Some mid-tier clients (decent profit, manageable, stable)
• Very few or zero bottom-tier clients (low profit, difficult, or shrinking)

An unhealthy portfolio has:

• One or two clients represent the majority of revenue
• Multiple unprofitable clients are being subsidized by the good ones
• No clear understanding of which is which

The goal isn't to only work with perfect clients. The goal is to consciously manage your mix so you're optimizing for profitability and operational health, not just revenue.

The Questions You Should Be Asking

Instead of "Who's our biggest client?" ask:

• "Which clients are most profitable relative to the work required?"
• "Which clients pay fastest and improve our cash flow?"
• "Which clients are easiest to work with operationally?"
• "Which clients are growing and creating opportunity?"
• "Which clients refer others to us?"

Instead of "How do we land bigger clients?" ask:

• "How do we find more clients like our actual best ones?"
• "How do we replicate the characteristics that make clients profitable and easy?"

The agencies that ask better questions build better businesses.

The Bottom Line

Your best clients aren't necessarily your biggest, oldest, or busiest. They're the ones who are profitable, pay promptly, are operationally easy, and treat your team with respect.

Most agencies don't know who these clients are because they're optimizing for revenue visibility instead of profit reality.

Figure out who your best clients actually are. Double down on them. Raise prices on the expensive ones. Fire the unprofitable ones. Clone the great ones.

This one shift, optimizing for your actual best clients instead of your impressive-looking clients, can transform your agency's profitability and your team's sanity.

The data is probably already in your systems (especially if you're using something like Awtomated that tracks this automatically). You just have to look at it honestly and be willing to act on what it tells you.

Your biggest client might actually be your worst client. The sooner you know that, the sooner you can build a business around the clients who actually make it worth running.