I Lost a Client Today!
May 20th, 2015
In fact, it was our longest-standing client.
No, we didn’t mess up. And no, they didn’t find another marketing services supplier.
The issue is an all-too-common one in our industry… they lost their largest client. In this case, one that accounted for more than 25% of their total revenue. And with that kind of financial hit, my client is facing some serious cash-flow issues… and that’s what got us.
For some firms, a client worth 25% is actually on the low side… I’ve heard of a single, large client accounting for as much as 60-70% of a firm’s total revenue! And with a huge client like that… it’s not IF you will lose them, it’s simply a matter of WHEN.
I don’t know why my client lost their client… could have been the loss of a key contact… maybe their client was, themselves, having financial issues… or maybe they got undercut by a ‘hungry’ competitor. But it happened.
Does any of this sound familiar? It really does seem to be a very common phenomenon in our industry.
If you have a client that accounts for 25% or more of your annual revenue, here are 3 things to consider to help mitigate the possible (probable, actually) loss of that client:
- As we like to say down south, “Love on them!” Whatever you’re doing now to maintain and enhance the relationship with that client… triple it! Spend more time – in person – with them, over-communicate all the time, surprise them with gifts, even consider assigning them a full-time Key Account Manager who focuses only on them.
- Make a concerted effort to get to know multiple people there… at multiple levels… and in multiple departments. The #1 reason I’ve heard for losing a big client is that the supplier had a “great relationship” with only one contact. And when that great contact left / retired / died… the vendor had no other strong relationships in place to help carry on.
- Focus on marketing & sales. The more clients you take on… the more diversified your client base… and the larger your revenue, the smaller and less critical that big client becomes. Think of it this way… A $250,000 client is 25% of a $1 Million company… 16.7% of a $1.5 Million company and only 12.5% of a $2 Million company. And if I’m going to lose them… I can handle 12.5% much easier than 25%!
The bottom line is this… we all want big clients. The revenue they generate drives growth, adds to our firm’s success and simply makes us happy! But lose a big client and it can be devastating to your business. So think about your big clients and do whatever it takes to keep that from happening… or at least be better prepared if it does.