Is Your Business Making This One Giant Mistake?

Is Your Business Making This One Giant Mistake?

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Don’t put all your eggs in one basket may be a cliché, but it’s also a smart strategy to adopt as you build a clientele for your growing business. Rather than depend on one or two big clients, diversify.

Developing a broad client base ensures you won’t be forced out of business if one big-paying customer suddenly pulls their account.

Here are four other steps you can take to multiply your sources of business revenues.

1. Think small, not big.

If one of your multiple clients cancels its contract, the loss in revenue won’t have a significant impact on your bottom line. That’s because you’ve spread the risk around. Have a dozen or more smaller clients rather than five or six of the biggest clients in your industry.

2. Re-evaluate the clients you have.

Some clients demand too much of your time, energy and financial resources. If a client requires, say, 40% of your time but contributes only 20% of your revenues, you’re losing money. Or if a big-paying client changes his mind frequently, he’s depriving you of the time to develop new clients.

If you decide clients like these aren’t worth keeping, give them up. Or, when a troublesome client calls, tell him you can handle the project only after you’ve completed your current workload, which could take weeks or months.

If you can’t afford to let go of a hard-to-please client just yet, take steps to make your working relationship more profitable. Renegotiate your fees or streamline services as you seek better customers elsewhere.

 

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3. Encourage loyalty.

For customers you want to retain, offer them service that keeps them coming back for more. That means plenty of customer TLC: A handwritten thank-you note for a big order, a telephone call to make sure the client is happy with your service, and a quick response to a customer’s order or complaint.

Starting a ‘buy nine, get one free’ club or hosting a sale ‘for loyal customers only’ encourages customer loyalty.

4. Nurture referrals.

Referrals are probably the most lucrative way to develop a solid client base for your SME. Referred customers require less selling time and are generally more loyal than other customers. And they come ready to buy from you, because, in a way, they’ve already been sold on your services.

The best way to generate referrals is to give your present customers reasons to brag about your business to others, including a product guarantee, service warranty, liberal replacement policy, friendly service and personalised attention.