Look into strategies you might not have considered previously. Explore the tools available for your site to make sure you're taking advantage of key apps and other features that may help you boost business.Įxplore new marketing paths. Speaking of your website, look it over - or have a trusted colleague, adviser or consultant review it - to make sure it looks professional and highlights your firm's strengths. Case studies highlighting how your company helped key customers may also attract new business. Ask current customers to refer you to others who could use your services, and if your website doesn't already feature client testimonials, you might request those as well. Years ago, the MIT Sloan Management Review cited the case of a catalog retailer that decided to focus on strengthening ties with its "loyal and most profitable customers, only to find that it was not bringing enough new customers into its portfolio to grow the business over time."īy all means, keep doing your best for your best clients, but explore these five ideas for broadening your customer base: Reaching out to new clients and markets, however, can fortify your venture against the hazards of placing too many eggs in relatively few baskets. Your mileage may vary, depending on the type of business you operate, but the general concept applies.Ĭustomer concentration has its advantages and, of course, it makes great business sense to forge solid, healthy relationships with your top customers. Hall, wrote for the Society of Actuaries that "an alarm should go off" if no more than 30 percent of your clients account for 50 percent of your business. In addition to the possibility that a key customer might decide to take business elsewhere, they also could disappear for any number of other reasons outside your control, including natural disaster, industry slow-down or their own financial problems.įinance consultants often cite the following paradigm: If one customer accounts for at least 10 percent of revenue, or your five largest customers represent 25 percent or more, your business has "high customer concentration."Ĭatalytic Management Consulting Principal, Shelley F. While it's natural and critical to nurture your loyal patrons, relying too much on one or two key customers, or a particular client category, can expose your small enterprise to a cash crunch or worse if the orders should stop. Small businesses often succeed by building strong client relationships, but may become too reliant on long-standing accounts and overlook the vital work of generating new customers. If losing a major customer would deal a threatening blow to your business, force serious cost-cutting or otherwise send you scrambling, it's probably time to expand or diversify your client base.
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