How to charge more (4 step framework)
We grew from 1 person local business to 23 person international business in 26 months when we stopped competing on prices. Here's how we did it.
Last year, ad spend grew by 8.6%, yet holding company revenues slipped by 1.2%.
So, where did the money go?
It flowed straight to the specialists.
Barbell effect
According to the Foxwell 2026 State of Agencies, 50% of agency leaders are already transitioning from full-service to vertical specialization. Meanwhile, the Big Six holding companies have watched their market share plummet from 44.6% to 29.6%.
The recent Omnicom-IPG merger, the largest in industry history, is essentially a defensive play to consolidate at massive scale and protect the top end of the market. Boutique specialists are absorbing everything else.
KPMG’s Q4 2025 AI Pulse Survey reveals the mechanism driving this shift: a massive 64% of organizations have altered their entry-level hiring because of AI.
The commodity work that generalist agencies relied on is exactly what AI now handles, meaning specialization provides the deep expertise that algorithms simply can’t automate.
We’re seeing a barbell effect. Massive conglomerates on one end and hyper-specialized boutiques on the other are growing, while the generalist middle is actively compressing.
And this isn’t a temporary dip; it’s a structural correction.
4 dimensions of vertical specialization
Most people assume vertical specialization means limiting your service offerings. In reality, it means refining exactly who you serve.
Pitching yourself as a “digital marketing agency for SaaS” isn’t a vertical, it’s a generic service with a broad label slapped on it. On the other hand, positioning as a “demand generation partner for Series A SaaS startups expanding into the DACH region” is a true vertical. The core difference isn’t the deliverable; it’s the client.
At my previous company, Blacktag, our pivot wasn’t born out of a grand master plan. It was just a series of practical decisions that happened to click:
Industry: We stopped calling ourselves a web agency and focused entirely on building web applications. It immediately changed who we were talking to and elevated the tenor of those conversations.
Audience: We intentionally targeted international markets (the US, EU, Australia, China) to capitalize on the pricing arbitrage between our Czech cost base and global billing rates. That single decision improved our margins overnight.
Problem: We got ruthless about the problem we were solving: building apps that actually worked for the end-user, not just the developer. It narrowed our prospect pool and sharpened our pitches.
Proof: We built undeniable proof into our portfolio through pixel-perfect UX that prospects could evaluate in 30 seconds without us saying a word.
Over two years, we scaled to a team of 23. We didn’t do it through aggressive sales, but through compounding value. Clients who originally came for design eventually asked for hosting, SLAs, and branding. The vertical created its own gravitational pull.
Looking back, those four elements formed a clear framework: Industry, Audience, Problem, and Proof. But before you commit to a specific vertical, three things must be true:
A reachable community: Are there dedicated industry events, publications, or LinkedIn hubs? If not, you won’t be able to build a pipeline.
Recurring problems: Avoid one-off projects where clients get what they need and vanish.
Premium pricing: Your buyers need the budget to pay for expertise. A hyper-focused market with no money is a worse trap than the generalist middle you’re trying to escape.
I’m walking through the full framework in this video if you want to see it applied step by step:
Where the pivot fails
When businesses try to specialize, they usually break down in one of three ways:
1. Specializing in the deliverable instead of the client. “We’re an SEO agency” sounds specific, but it isn’t. It’s just a service. Your focus should be on the client’s industry, context, and core problem. The service is just how you solve it.
2. The parallel-path trap. Trying to reposition while keeping your generalist clients running indefinitely means your new identity never crystalizes. The old revenue feels safe, so you stall. Set a hard date. Before it, you transition; after it, you are a specialist.
3. Choosing a vertical with zero proof. Proof is the fourth dimension for a reason: it brings instant credibility to a new market. The smartest move is usually migrating toward a sector where your best current client already operates. That way, you aren’t starting from scratch; you’re just doubling down on the proof you already have.
🔧 Tools & Resources
SparkToro: Discover where your target clients actually pay attention (podcasts, publications, social accounts). Use this to map entry points or find out early if a community is unreachable.
Apollo.io: Size up your vertical before making the leap. Filter by your exact ICP (industry, headcount, tech stack). If your total addressable market is only a few hundred companies, it might be too narrow to sustain a standalone business. Know the numbers first.
Foreplay.co: A powerful competitor ad library. Search for agencies already targeting your potential vertical. If absolutely no one is running ads, you've either found a wide-open opportunity or a dead zone with zero budget. Figure out which it is before you pivot.
The market data has settled the argument: the ends of the barbell are growing, and the middle is getting crushed.
If you’re unsure where to go, run a forced-choice diagnostic: If you had to drop every client segment tomorrow except for one, which would you keep? That’s your ideal candidate.
Run it through the four dimensions, confirm the math, and make the move.
Build with calm,
– Yuri
Yuri Vonchitzki
LinkedIn · YouTube · My services
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