If you’re like me, you keep meticulous records of all of your projects, including hours worked, hourly rates, speed of work and so on. It’s easy to quickly rack up a lot of data, but data is no good if it’s not put to practical use. I do various ongoing and yearly analyses of my data, and one of those analyses involves creating a bubble chart to give me a snapshot of my clients’ value to me, both monetarily (the volume of work and how much I get paid for it) and in terms of how much I like working with each client. This gives me a visually intuitive way of seeing the cold, hard facts of the value of my clients to my business.
Here’s what I put into my chart:
- client name
- overall income for each client
- average hourly rate for each client
- a subjective rating of how much I enjoy working with the client.
The last of these categories is totally personal to me, and it should be. It takes into account factors such as how interesting I find the subject matter, how well the client’s deadlines and requirements fit in with my way of working, and generally how satisfying I find the working relationship to be. Everybody’s idea of the perfect client working relationship will be different.
Example of how to visualise your clients’ value to your business
Here’s an example using made-up data for a hypothetical business: Fabulous Editing Co.
Here’s how the chart works:
- The areas of the bubbles represent the relative incomes Fabulous Editing Co. receives from each client.
- The bubbles’ centre points on the Y axis show the average hourly rate Fabulous Editing Co. gets from each client.
- The bubbles’ centre points on the X axis show the subjective rating of how much Fabulous Editing Co. enjoys working with each client.
It’s possible to derive several conclusions from this bubble chart. However, it’s important to note that the conclusions drawn from any bubble chart will to a large extent depend on the unique circumstances of the business to which it belongs. Factors such as how well established the business is, specific goals (e.g. if the business is trying to break into a particular market) and required effective hourly rate will affect the conclusions drawn from the data.
With that in mind, here are some conclusions that could be drawn from the example above:
- Client F is arguably Fabulous Editing Co.’s best client. The hourly rate is solid in comparison with the other rates Fabulous Editing Co. receives, and the total income is clearly high. Fabulous Editing Co. also gave Client F a rating of 3 for enjoyment, which means this client is providing a high volume of work that is pretty enjoyable.
- Client D is clearly Fabulous Editing Co.’s least valuable client. The work is not enjoyable, and both the hourly rate and the volume of work are very low. Fabulous Editing Co. may decide to stop working with Client D on the basis of this analysis, unless there are other factors to take into account that are not reflected in the bubble chart.
- Client A has positives and negatives. The hourly rate is lower than Fabulous Editing Co.’s average and the enjoyment rating is not great. However, Fabulous Editing Co. may feel these factors are balanced out by the volume of the work.
- Clients C and I are not high performers economically, but they get high enjoyment ratings. Whether Fabulous Editing Co. continues to work with these clients will depend on the company’s priorities.
- Client E is a tricky one. The hourly rate is very high and the total income is not negligible, but the enjoyment rating is very low. Again, whether Fabulous Editing Co. continues to work with Client E will depend on Fabulous Editing Co.’s priorities.
- Clients B, G and H pay well per hour and are enjoyable to work with. Fabulous Editing Co. may want to see whether it can increase the volume of work it does for these clients.
Creating bubble charts for successive years and viewing them next to each other can help to give an idea of how your business is changing over time. Hopefully, over the years, the bubbles will all gradually migrate towards the top right of your chart, indicating that both your hourly rate and your client ratings are improving.
You can build bubble charts into your annual reporting, if you do that. I’ve written about why and how freelancers should write annual reports here.
Try it for yourself
This post isn’t intended to be a technical how-to on bubble charts, as there are already many such articles online. I create my bubble charts in Excel (e.g. see here for a straightforward introduction) and it’s also possible to create them in Google Sheets (though I haven’t tried that myself).
Give it a go and see what happens! You may find this kind of analysis brings a helpful new level of clarity to how you conceptualise your clients’ value to your business, enabling you to set smarter goals for the future.