For a small or medium-sized business, gaining a large client that consistently makes orders and pays on time would seem like an obvious blessing. Being able to rely on a steady flow of work is reassuring, but there are also major downsides if one or two clients make up the majority of your revenue.
The most obvious problem is that if the one organisation you rely on goes under, you may well be too. This doesn’t just apply to the private sector, government cuts or reorganisation could mean being exposed to risk when dealing with public bodies. Even if a client is doing well, they might make the decision to switch providers when your contract is up for renewal. Client dependency can seem like a potential disaster, which has effects beyond your control. But there are steps you can take to mitigate the risks.
When forming a business strategy to move away from a position of client dependency, it pays to start with looking at exactly which clients you are most dependent on, and to what degree. Having a percentage figure for each one against your total monthly revenue is a good way to evaluate this. Seriously consider the impact of losing your biggest customer; would your company survive the loss?
Aside from client dependency, you may also be exposed to risk from concentrating on one market sector. Industry-specific downturns are common, and multiple clients could be affected.
When investing money, you wouldn’t put all your eggs in one basket. So why take that attitude in regards to revenue? Looking at your core business, what about your infrastructure and working practices could appeal to a wide range of clients? From this basis, you can then adapt workflows and business processes to meet new customer requirements.
Having a sales strategy and process that emphasises your past successes while showcasing business flexibility is critical. Potential clients will want to be assured that your services aren’t only relevant in one industry and that you can adapt alongside them.
Maintaining good customer relations and having effective means of communication are vital to retaining custom. Achieving these goals doesn’t have to lead to higher overheads. Having a system open to customers where they can log suggestions and complaints, and dealt with by priority is a more cost-effective and efficient system then handling everything manually.
A clear line of communication leads to more efficiently provided services, fewer headaches and a clear picture of what a customer wants in the future.
SwiftCase is a cloud-based business process management platform that includes many features to help diversify your client base and mitigate risk.
Get in touch with us today, for a free, no-obligation demonstration.