How to choose the right agency niche. Mads Singers explains why niching by repeatable process beats picking an industry, and the metrics that make an agency scalable.
Most agency owners think niching down means picking an industry. Mads Singers argues that is why so many of them stay stuck. In this episode of Agency Uncovered, he makes the case that a niche is a process - one repeatable, scalable deliverable you execute over and over and that this single decision is what lets you hire cheaply, train fast, deliver better results and build real margins. He explains how to identify your process by looking at your best clients, why some niched agencies run 70–90% margins, and the three numbers every agency owner needs: profit margin, customer acquisition cost, and customer lifetime value.
Key Takeaways
- Niche by deliverable, not vertical. “We work with e-commerce” is not a niche; “we run Instagram DM campaigns” is.
- Find your process by auditing your best clients. Who paid most, hassled least, and got the best results — and what did you actually do for them?
- Clients want money, not menus. Recommending the one channel that works for their niche beats offering all of them.
- A repeatable process can be split into roles. Sourcing, messaging, follow-up — cheaper hires, faster training, better output.
- Niched agencies can run 70–90% margins because delivery cost drops while results improve.
- Add a second process only after the first is perfected — usually once you are making millions, not before.
- The founder is the ceiling in a do-everything agency; nobody can be hired to replace a generalist owner at a sane price.
- Price so you can hire. If you had to pay someone to do the work and still profit, what would the price need to be?
- Never run below a 30% profit margin. Below that, raise prices.
- Track time per client to see which accounts cost more than they pay.
- Know your CAC and LTV. If a client is worth 2,000 over their lifetime and costs 500 to acquire, that is good business — but only if you know the numbers.
- Roughly 20% of budget goes to marketing and sales. “We cannot afford marketing” means you are not charging enough.
Frequently Asked Questions
How do you choose the right agency niche?
Identify the one repeatable, scalable process you execute best, rather than picking an industry. Look at your best clients — highest paying, least hassle, strongest results — and work out what you actually delivered for them. That deliverable is your niche.
Should you niche by industry or by service?
By service or process. Verticals like “e-commerce” contain enormously different businesses and do not give you a repeatable process. A specific deliverable does.
Why does niching make an agency more profitable?
Because a single repeatable process can be broken into steps, staffed with more affordable specialists, trained quickly, and improved continuously. Delivery cost falls while results improve — some niched agencies run 70–90% margins.
When should an agency add a second service?
Only once the first process is genuinely perfected and the business is at real scale. Then add one adjacent service your existing clients already need, with its own team — not a menu of everything.
What metrics should an agency owner track?
Profit margin and cost to deliver (including staff time per client), customer acquisition cost, and customer lifetime value. LTV is what tells you how much you can afford to spend acquiring a client.
How much should an agency spend on marketing?
Around 20% of overall budget typically goes to marketing and sales. If the business cannot fund that, prices are too low.
About the Guest
Mads Singers is a management coach and the founder of Aristo Sourcing. He has guided hundreds of agency owners through the process of niching down and building scalable delivery.
Connect with Aristo Sourcing
Learn more about Aristo Sourcing and connect with the team:
- Website: https://aristosourcing.com
- LinkedIn: https://www.linkedin.com/company/aristo-sourcing
- Facebook: https://www.facebook.com/aristosourcing
- X / Twitter: https://x.com/AristoSourcing
Aristo Sourcing helps businesses scale by sourcing and placing skilled virtual assistants and remote professionals, with talent primarily recruited from South Africa and the Philippines.
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