Category: Business Performance

  • AI Isn’t Killing Web Design Agencies. It’s Exposing the Ones With Weak Offers.

    AI Isn’t Killing Web Design Agencies. It’s Exposing the Ones With Weak Offers.

    I recently posted on LinkedIn about the pressure AI is putting on web design agencies. It generated a lot of discussion, and some of the responses were more interesting than the original post. So I wanted to go deeper on this, because there’s a bigger point here that matters well beyond web design.

    Let’s start with what prompted it.

    The £299 WordPress site is already under pressure

    There are web design agencies across the UK right now selling WordPress brochure websites from around £299. Some charge more, some less, but the point is that there’s a huge market of agencies whose core offering is: give us some money, we’ll build you a website.

    The problem is that AI website builders like Wix, Squarespace, Webflow, and a growing number of newer tools can now generate a complete, responsive site from a text description. In many cases, the result is perfectly adequate for a small business that just needs a functional online presence. The cost? Somewhere between free and £30 a month.

    That’s not a future scenario. That’s now.

    When I shared this observation on LinkedIn, the responses fell into some predictable patterns, and a few that were genuinely useful.

    The defensive response: “AI websites are terrible”

    Several web developers pushed back hard. The argument was essentially that AI-built websites are poor quality, have no real UX thinking behind them, and that the whole “agencies are doomed” narrative is overblown.

    There’s some truth in that. AI-generated sites can be generic. They don’t understand your brand the way a human designer does. The code isn’t always clean.

    But here’s what that argument misses: the quality bar for a basic brochure site is lower than most web professionals think. A local plumber doesn’t need a custom design system. They need a site that loads fast, looks professional enough, shows their phone number clearly, and has some decent reviews on it. AI can do that already, and it’s getting better fast.

    The defensive response is understandable. Nobody likes being told that what they sell is becoming commoditised. But denial isn’t a strategy.

    The people who confirmed it’s already happening

    More telling were the comments from people in the industry who shared real examples. One commenter described quoting against agencies selling basic websites for $500 to $800, only to find the same clients asking why they’d pay that when AI tools can generate something in 30 seconds.

    Another pointed out that hiring a developer for a brochure website will soon be a thing of the past, and that the focus needs to shift to outcomes, problem solving, expertise, and personal relationships.

    These aren’t predictions. They’re observations from people watching it happen in their own businesses right now.

    The real point: AI isn’t replacing agencies. It’s exposing weak offers.

    One comment summed it up better than I could: “This isn’t about AI replacing agencies. It’s about AI exposing weak offers. That’s a very different problem.”

    And that’s exactly right.

    If your web design agency sells “a WordPress website” as the product, you’re selling a deliverable. A thing. And when AI can produce a comparable version of that thing for a fraction of the cost, your pricing collapses. It doesn’t matter how good your code is, how clean your CSS is, or how many years of experience you have. If the client can’t tell the difference between your output and what AI produces, you have a positioning problem, not a quality problem.

    The agencies that will thrive are the ones selling something AI genuinely can’t replicate: strategic thinking about what the website needs to achieve, deep understanding of the client’s customers and market, conversion expertise, ongoing optimisation based on real data, and a trusted advisory relationship where the agency is a partner rather than a supplier.

    That’s the difference between selling ingredients and selling the meal. You can check out a service I provide called a Value Assessment HERE that goes into this in more detail.

    The harder question: what about AI doing strategy too?

    One of the more challenging responses raised an interesting point. What happens when AI can plug into heatmaps and analytics, advise on why visitors aren’t converting, build strategy around commercial goals, and proactively adapt based on performance data?

    It’s a fair question, and the honest answer is that AI is already doing some of this. Tools exist that can analyse conversion paths, suggest layout changes, and run multivariate tests automatically.

    But there’s a distinction between analysis and judgment. AI can tell you that your contact page has a 90% bounce rate. It can even suggest changes. What it can’t do is sit across the table from your client, understand that their real problem is that they’re targeting the wrong customer segment entirely, and help them rethink their go-to-market strategy.

    The client doesn’t necessarily care whether you’re using AI tools in the background. They care about results. If you’re the person who helps them understand why their business isn’t growing and what to do about it, you’re a trusted partner. If you’re the person who builds them a website and sends an invoice, you’re a supplier who’s about to be replaced by software.

    The analogy that landed: Premier Inn vs The Dorchester

    Another commenter drew a useful comparison between functional purchases and emotional ones. A Premier Inn room does the job. It’s clean, consistent, and reasonably priced. The Dorchester is a different product entirely. You’re not just paying for a bed; you’re paying for the experience, the status, and the relationship.

    AI website builders are the Premier Inn of web design. They’ll do the functional job well enough for most basic needs. The question for agencies is: are you selling Premier Inn rooms and trying to charge Dorchester prices? Or have you genuinely built a Dorchester-level service?

    Most agencies are somewhere in between, and that’s the uncomfortable bit. They’re charging more than the AI tools but not offering enough differentiation to justify it. That middle ground is exactly where margins get squeezed the hardest.

    What this means if you run a web design agency

    If you’re reading this and recognising some of these patterns in your own business, here are a few things worth considering.

    First, look honestly at what you’re actually selling. If your proposals are structured around deliverables (homepage design, 5 inner pages, contact form, SEO setup), you’re selling ingredients. That’s the offer AI can undercut. Restructuring your proposals around business outcomes (increased lead generation, improved conversion rates, measurable revenue impact) changes the conversation entirely.

    Second, think about your client relationships. Are you a supplier who gets a brief, builds a thing, and moves on? Or are you a partner who understands the client’s business, tracks what’s working, and proactively advises on improvements? The first role is replaceable. The second isn’t.

    Third, consider your pricing model. If you’re still charging fixed project fees for website builds, every improvement in AI tools puts downward pressure on what you can charge. Retainer-based pricing tied to ongoing value, where you’re paid for the outcomes you deliver rather than the hours you work, creates a much more defensible business.

    And finally, stop seeing AI as the enemy. The agencies that will do best are the ones using AI to speed up the commodity parts of their work (initial layouts, first-draft copy, code scaffolding) while investing more time in the strategic, relationship-driven work that AI can’t do.

    It’s the same problem across all service businesses

    Web design agencies are just the most visible example right now because the AI tools are so tangible. You can literally watch an AI build a website in real time. It’s dramatic and it gets attention.

    But the same dynamic is playing out across every service business where the core offering can be described as a deliverable. IT support, bookkeeping, marketing, recruitment, consulting. If you can reduce what you do to a checklist of tasks, AI will eventually do those tasks cheaper and faster.

    The businesses that survive and grow will be the ones that have moved beyond deliverables to outcomes, beyond supplier relationships to trusted partnerships, and beyond cost-based pricing to value-based pricing.

    That’s not a comfortable message, but it’s an honest one.

    Want to know where your business stands?

    I’ve built a free assessment specifically for service businesses that want to understand how defensible they are against AI disruption. It takes about five minutes, and you’ll get an immediate score across four areas: replaceability, pricing resilience, supplier vs trusted partner positioning, and adaptability.

    No fluff, no sales pitch in disguise. Just an honest look at where you’re strong and where the gaps are.

    Take the AI-Proof Assessment here.

  • 6 things every MSP should fix to improve profitability and business valuation

    6 things every MSP should fix to improve profitability and business valuation

    If you’re running an MSP and you’ve ever thought about improving your margins, or even considered what your business might be worth if you sold it one day, there are a handful of things that make an outsized difference.

    None of them are complicated. But most MSPs I work with aren’t doing all of them, and some aren’t doing any.

    Here are six that will move the needle.

    1. Move away from break-fix

    This one comes first because it matters most.

    If the majority of your revenue still comes from ad-hoc break-fix support, it’s going to hold back both your profitability and your valuation. Buyers and investors want predictable, recurring revenue. They want to see a business that generates income whether or not something breaks on a Tuesday afternoon.

    Break-fix revenue is unpredictable by nature. It’s hard to forecast, hard to staff for, and it positions you as reactive rather than strategic. If you’re still predominantly break-fix, transitioning to managed services contracts should be your number one priority.

    2. Get customers onto annual (or longer) contracts

    Monthly rolling agreements are a step up from break-fix, but they’re not great for valuation purposes either. A buyer looking at your business wants to see committed, contracted revenue that’s going to stick around.

    The higher your percentage of clients on 12-month or longer contracts, the more predictable your revenue looks, both to a potential buyer and to your own cashflow planning. It also gives you a much stronger foundation for planning investments in your team and technology.

    If you’re nervous about asking clients to commit, consider this: most clients who are happy with your service won’t bat an eyelid at an annual contract, especially if there’s a small incentive to do so.

    3. Track support margins and project margins separately

    This is one of the most common gaps I see.

    Most MSPs have one set of accounts that blends everything together. Support revenue, project revenue, all the costs, one big number at the bottom. The problem is, you can’t tell whether your recurring support business is genuinely profitable on its own.

    And that matters, because when someone values your business, they’ll look at the recurring support revenue with a much higher multiple than project work. Project revenue is lumpy and unpredictable. Support revenue, if it’s profitable and growing, is where the real value sits.

    Separating these out doesn’t require a new accounting system. It just requires some discipline in how you allocate costs and report your numbers. Once you can see both margins clearly, you’ll make better decisions about where to focus, what to price, and what to fix.

    4. Know your per-customer profitability

    Not all customers are equal. Some are profitable, some are breaking even, and some are actively costing you money once you factor in the support time, the scope creep, and the constant back-and-forth.

    Most MSPs have never properly worked this out. They have a general sense of who the “difficult” customers are, but they haven’t put actual numbers against it.

    Until you do, you can’t make good decisions about pricing, retention, or where your team’s time is best spent. You might find that your largest customer by revenue is actually one of your least profitable. Or that a smaller client you’ve been neglecting is quietly delivering excellent margins.

    This is also where customer scoring becomes useful. By rating clients across factors like profitability, payment behaviour, cultural fit, and growth potential, you can make objective decisions about who to invest in, who needs a pricing conversation, and who might be better served by someone else.

    5. Stop selling a menu of services

    Too many MSPs present their services like a restaurant menu. Network monitoring, backup, helpdesk, security, cloud services, all listed out and priced individually. The client picks what they want, compares your menu to someone else’s, and chooses on price.

    That’s commodity positioning, and it kills your margins.

    Instead, package your services around the outcomes your clients actually care about. They don’t want “network monitoring” as an abstract concept. They want their systems to work reliably so their team can focus on their jobs. They want to know they’re protected and that someone competent is handling the technology so they don’t have to think about it.

    When you sell outcomes rather than ingredients, the price conversation changes completely. You’re no longer being compared line-by-line against a cheaper competitor. You’re being evaluated on the value of the result you deliver.

    6. Build in an annual price review process

    If you haven’t raised prices in two or three years but your costs have increased by 15-20% (salaries, licensing, tools, insurance, the usual), you’re effectively earning less every year. Your margins are being quietly eroded and most MSPs don’t even notice until it’s painful.

    Building an annual pricing review into your business isn’t just good practice, it’s essential. And communicating it properly makes all the difference. Give clients proper notice, explain what you’re investing in, focus on the value they continue to receive. Don’t apologise for it.

    Most clients expect annual increases. The ones who leave over a reasonable adjustment probably weren’t great clients to begin with.

    Where does your MSP stand?

    Most MSPs I work with are technically excellent. They deliver great service and their clients genuinely value what they do. But they’re competing as if they’re a commodity, because they haven’t addressed the positioning, pricing, and packaging issues that separate a good MSP from a premium one.

    Small changes in these areas can make a 30-50% difference to profitability. And if you’re ever thinking about selling, they can significantly increase what your business is worth.

    I’ve built a free 5-minute assessment that scores your business across five key areas: value positioning, pricing power, growth engine, operational leverage, and technology adoption. It’ll show you exactly where you’re strong and where you’re leaving money on the table.

    👉 Take the free assessment here

    And if you’re an MSP with £500k+ in revenue and you already know you need to address some of these issues properly, the Value Transformation Assessment might be a better starting point. It’s a structured review of your business across ten dimensions, with specific recommendations and a clear implementation roadmap. It’s how most of my client projects begin.

  • Should you ever fire a customer?

    Should you ever fire a customer?

    As business owners, we often celebrate never losing a customer as a badge of honour. But what if I told you that a healthy amount of customer churn is actually essential for business growth?

    The Loyalty Myth

    I recently sat down with a business owner who proudly claimed, “We’ve never lost a customer.” Initially, this sounds impressive, a testament to exceptional service and client satisfaction!

    But as our conversation progressed, a different picture emerged.

    “Do you enjoy working with all of your customers?” I asked.

    “Well, we have a few that are quite difficult,” they replied hesitantly.

    “Do those customers take up a lot of your time?”

    “Oh, yeah, they’re the worst. The team can’t stand them. They’re always asking for free services or discounts, and nothing is ever good enough.”

    “Now, do you regularly increase prices for these customers?”

    “No,” they admitted. “They push back on everything. To be honest, I just can’t face the argument.”

    By the end of our discussion, we’d uncovered an uncomfortable truth, this business was holding onto customers who:

    • Were difficult to work with
    • Didn’t appreciate their services
    • Drained profitability (through resistance to price increases)
    • Tied up disproportionate team time
    • Damaged overall team morale

    The Value of Some Customer Churn

    Unless you’re extraordinarily lucky, you’ll never have 100% of customers who are a perfect fit. Customer relationships naturally evolve, their needs change, your business grows, key contacts move on.

    This is why having a structured approach to evaluating customer relationships is crucial. Some customer departures should be celebrated, not cried over.

    From Subjective to Objective Analysis

    The challenge most businesses face is the subjective nature of customer assessment. Different departments often have conflicting perspectives:

    • Sales sees the relationship one way
    • Service delivery another
    • Finance yet another

    What’s needed is an objective framework, one that transforms gut feelings into strategic decisions.

    Customer Scoring: The Objective Alternative to “You’re Fired!”

    Instead of dramatic confrontations, customer scoring provides a structured approach to relationship management. This system works in two crucial ways:

    Pre-Engagement Scoring

    Before working with new clients, establish clear criteria to assess whether they align with your:

    • Company culture
    • Work style
    • Service offerings
    • Budget expectations
    • Communication preferences

    This predictive tool can help you avoid problematic relationships before they begin.

    Post-Engagement Scoring

    Once relationships are established, use an ongoing scoring mechanism to track performance. Evaluate factors like:

    • Profitability
    • Client success and ROI from your services
    • Payment timeliness
    • Resource demands vs. revenue generated
    • Cultural alignment
    • Growth potential
    • Ease of working together

    Case Study: Turning Customer Attrition into Opportunity

    A global logistics client approached me with a serious problem—they were losing 35% of customers annually, significantly higher than the industry average of 20%.

    They initially believed the problem was in their customer service team. But when I examined the entire customer lifecycle, I discovered something different.

    They were primarily targeting American companies looking to expand into Europe. They had a super attractive offering and no shortage of customer willing to sign up.  However, there were too many clients leaving them after just 6 months.

    The problem was, many of the customers liked the idea of expanding into Europe but were not actually ready to do it. 

    By developing a customer scoring system that rated prospects on factors like:

    • Product fit for European markets
    • Prior third-party logistics experience
    • Language capabilities
    • Understanding of UK/EU regulations
    • Marketing plans for European customers

    …they could predict which clients would succeed and which would likely terminate services within six months.

    Rather than rejecting those low scoring clients outright, this scoring system enabled the company to develop a new service line, helping businesses prepare for successful European expansion. The result? Dramatically reduced attrition, improved customer satisfaction, and increased profitability.

    Creating Your Own Customer Scoring System

    Developing an effective scoring framework isn’t complicated, but it requires thoughtful consideration of what truly matters in your business relationships:

    1. Identify 5-8 key factors that define an ideal customer relationship
    2. Create a 1-5 scale for each factor
    3. Include criteria reflecting both sides of the relationship value exchange
    4. Score all existing clients quarterly
    5. Set threshold scores that trigger specific actions
    6. Apply the same criteria to prospective clients

    Handling Low-Scoring Customers

    When you identify customers with problematic scores, you have several options:

    Improve the relationship: Sometimes a frank conversation about expectations can transform things.

    Adjust your pricing: If a customer constantly pushes back on value, increasing prices can either lead to their departure (freeing resources for better-fit clients) or cause them to suddenly value your services more highly.

    Facilitate transition: Help them find another provider that’s a better fit while maintaining goodwill.

    Create a different service model: Develop a streamlined offering that better suits their needs while requiring fewer resources.

    The Freedom of Strategic Customer Selection

    Remember this crucial business truth: not all revenue is good revenue.

    The most successful businesses understand that customer selection is as important as customer acquisition. By implementing an objective scoring system, you transform what’s often an emotional, subjective process into a strategic one that benefits your business and team.

    After all, a customer who isn’t right for you probably isn’t getting the best service either. Sometimes, the kindest thing you can do is help them find a better match for their needs.

    Your team’s morale, your profitability, and even those customers themselves will ultimately thank you for making this difficult but necessary decision.

  • Are you driving your business whilst only looking in the rear view mirror?

    Are you driving your business whilst only looking in the rear view mirror?

    Unless you are reversing, you wouldn’t try and drive your car whilst only looking in the rear view mirror would you? SO why do so many business owners drive their businesses in this way when it comes to performance metrics (KPI’s).

    The Backwards-Looking Trap

    I recently responded to a friends post about KPIs, and it sparked a thought: why do so many small and medium-sized businesses focus exclusively on lagging indicators like revenue and margins?

    The issue with this approach is glaring—these metrics show you what’s already happened. They’re historical data points that you simply cannot change. While they’re certainly important to track, they represent only half of the performance picture.

    A Complete View Requires Two Perspectives

    To effectively steer your business, you need both lagging AND leading indicators. Think of it this way:

    Lagging indicators are your rear-view mirror—they show what’s already happened. These include:

    • Quarterly revenue figures
    • Profit margins
    • Customer retention rates
    • Cost of goods sold

    They’re excellent for confirming whether your strategies worked, but they only tell you about the past.

    Leading indicators are what you see through the windscreen—they show what’s coming next and allow you to anticipate when to change direction, accelerate, or brake. These include:

    • Website traffic trends
    • Quality of your sales pipeline
    • Customer engagement metrics
    • Pre-booked consultations and meetings
    • Proposal conversion rates

    These forward-looking metrics give you early warnings of potential problems or confidence that you’re on the right track.

    The Value of Looking Forward

    Surprisingly, most businesses fixate only on the rear-view mirror. This backward-looking approach limits your ability to make proactive decisions about pricing, cost management, and value delivery—the very levers that most significantly impact profitability.

    When you incorporate leading indicators into your business dashboard, you gain the ability to:

    1. Anticipate market shifts before they affect your bottom line
    2. Adjust pricing strategies proactively rather than reactively
    3. Identify cost-saving opportunities before they become urgent necessities
    4. Recognise shifting customer preferences while there’s still time to adapt

    Balancing Your View

    You absolutely need to know where you’ve been—historical performance provides essential context and confirms whether your strategies are working. But more importantly, you need to know if you’re heading in the right direction.

    The businesses that thrive are those that maintain this balanced perspective. They acknowledge past performance while prioritising the indicators that give them control over their future.

    Next time you’re reviewing your business metrics, ask yourself: “Am I spending as much time looking through the windscreen as I am checking the rear-view mirror?”

    You can join the discussion about this topic on LinkedIn here