We’ve all heard the phrase ‘don’t put all your eggs in one basket’ and it certainly rings true when thinking about business relationships.
Strong client relationships are the foundation of any successful company. And receiving regular orders confirms the quality of your products and services. Repeat business is, undoubtedly, a hugely positive thing.
However, focus too heavily on this repeat business and you can find yourself in a tricky position. Relying on one or two clients as your main source of income leaves your business in an incredibly vulnerable position.
It might sound obvious, but what happens if your biggest client were to change supplier? Or change what they do? What happens if they go out of business entirely?
It’s easy to say ‘we know them, they wouldn’t do that’ or ‘we’re just getting started, this is all we need’ – and a surprising number of small businesses do. But it’s a dangerous game to play as, in reality, you simply can’t predict this.
According to new research, 16% of small businesses rely on a single customer for a whopping 50% of their profits. Now, aside from the obvious threat of losing that client, think about the effect that kind of reliance could have on the relationship.
When a company becomes aware that they make up a significant portion of your income, they can start to increase their demands. And who are you to say no?
When a client senses that you need them more than they need you, the power dynamic can switch. Not only does this mean you have to pander to their demands, but it could mean you have less time to invest in other clients, creating a negative cycle.
Avoiding all your time being eaten up by one or two clients is the only way to ensure new clients get the time and attention they deserve. So, how can you make this happen?
There’s no quick fix, but gradually shifting your focus onto creating new relationships with other companies will help you to regain a balance – without damaging relations with your existing clients. Long-term investment in regular marketing activity is the most effective way to do this.
Attracting new customers will not only help you spread your energies (and profit), but it will strengthen your presence in the marketplace. As you start to build an increased awareness of your brand, more new customers will hear about your product and services.
But take note – there’s no cutting corners when it comes to successful marketing. Although it might feel tempting to invest in a short flurry of advertising to gain some quick wins, you run the risk of two things happening:
- You get an influx of business that you can’t cope with and service levels drop
- The activity is not targeted or built up over time – so amounts to nothing
Instead, you need to create a consistent marketing strategy with planned activity. This will help you to create a steady stream of leads in the long term, while the rest of your team get on with serving your current accounts.
Your activity should be informed by a detailed analysis of your company, your target audiences and the benefits of your products and services. There’s a lot to think about, but there are simple ways you can get the ball rolling. The first step is to define your:
- Target markets – outline all the different groups of people you wish to target with your products and services
- Buyer personas – summarise the features, drivers, benefits and pain points of these different groups
- Positioning – outline what makes you different from all the other companies in your marketplace
- Messaging – make a list of everything that your customers benefit from in choosing your products and services
These insights are the building blocks of your marketing strategy and, once properly defined, you can begin using them to plan your activity. They will inform how you communicate with potential customers and what you say to them.
It’s a process that takes time, effort and expertise. So, working with external providers is the best way to a) make sure the work actually gets done, and b) make sure it’s done properly. This way, your marketing is carried out (and followed up) at a steady pace – without disrupting the rest of the business.
For more information on developing an effective marketing strategy, why not chat to our team? You can contact us on 0113 394 4559 or enquiries@nextlevelbd.co.uk.