Don't Take Chances on Losing a Big Client

8 Comments

DiceLosing a big client actually launched my freelance writing career, but not all stories end as well as mine did. Today, I try to make sure the income I receive is spread across more clients so I don’t get into that situation again. You can’t always help it when one big client starts to contribute a large chunk of your income — but what happens if you lose that client?

You can be prepared. This situation is one that we should all consider in our plans.

Plan Ahead

It takes little effort to get so wrapped up in your work that you neglect your business’ big picture. You stay busy meeting your clients’ needs and handling administrative tasks. Don’t take the chance that a client suddenly goes out of business or lets go of consultants to bring all of the work in-house, leaving you with a huge drop in income. Plan ahead.

  • Make marketing a regular part of your job: Whether you’re a one-person business or five, marketing remains key to averting “slow times.” It takes time to build relationships and turn those relationships into clients. This includes speaking, using social networks, sending email newsletters, and doing all the other things mentioned in the next section.
  • Keep current clients happy: It costs more time and effort to convert a new client than to keep current ones. Just because you’re doing a project with an actual start and finish doesn’t mean you don’t have future opportunities with the client. Maybe the client will know someone in another department that needs you or new projects pop up.
  • Review your client list: Take a look at your client list and determine how much of your income each brings. Lopsided figures can mean trouble. Address the problem now, rather than waiting until disaster occurs.
  • Collect testimonials: Sometimes a client will give you feedback on the great job you did. Ask if you can publish that as a testimonial. If not, ask for a testimonial you can use.

Be Ready to React

You can find yourself in a situation where you’ve lost a big client without planning for the loss. This could even compel you to think that maybe it’s time to give up your business and return to a regular paying job that means commuting again. This happened to me when I had just begun my freelance writing career. I took a risk by sending an email to connections and received two new gigs, one of which I still have today — the decision paid off. Since we can’t always plan and anticipate the situation, we can plan how we’ll handle the situation, should it ever happen.

The key to reacting is to crank up the marketing gear. Put as much time into marketing as you can, even if you’re still not officially done with the client. Yes, you’ll need to work extra hours, but it’s a temporary sacrifice. Marketing efforts don’t lead to instant new clients. It takes time to ramp up and put your business out there. If you already make marketing a regular part of your job, you’re ahead of the game, and just need to build on it.

  • Send email newsletters: If you don’t already publish email newsletters, start now. A good rule of thumb is to use 80 percent content offering value to the reader and 20 percent promoting your business.
  • Offer to do guest blogging: Get your name out there in other blogs that speak to your market. Having your own blog helps, but potential clients may not have found their way there.
  • Participate in social networks: If you don’t already do this daily, now’s the time to pick it up. We offer plenty of ways for businesses to take advantage of Twitter, LinkedIn, Facebook and YouTube.
  • Cross-post everywhere: This simply refers to mentioning your blog and social media accounts in your email newsletter, and vice versa. If you have a blog, offer different ways for readers to receive updates. It amazes me how many blogs don’t offer email updates, and it’s usually just a matter of turning on the option.
  • Look for speaking opportunities: Speakers gain almost instant credibility.
  • Teach classes: You can teach an online class through a webinar or go to your community to find opportunities.

Many businesses flourish — even in rocky times — by never taking their success for granted. Never assume that one big client will always be there for you.

How do you ensure you your business keeps on keeping on?

Photo credit: rt1352

8 Comments

Stephen McGehee

At the end of 2008, I lost my single biggest customer. I had a contract with one of the states to provide software and support to all their candidates and PACs, and had been doing so for several years. Budget cuts meant that now the candidates and PACs would have to buy directly from me rather than having the state pay for it. My biggest customer suddenly turned into a whole lot of “little” customers. Converting someone from “free” to “pay” is always a tough sell, but so far, it is looking good. Having a well-established reputation really helped. Given the cyclical nature of political campaigns, it’s still too early to tell what the effect will be.

In the “few big customers or lots of smaller customers” debate, I’ve done both. I can’t say that one is clearly better than the other. It also depends a lot on the product/service you are providing and the amount of time involved. Ideally, I sell a program and that’s the end of it. Some customers require a lot of “hand holding”. Too much of that and the time involved becomes a problem. On the other hand, it is a great way to get feedback to make improvements. The key is to listen to your customers – and then do something with it.

Peter Garner

@Rebecca

I guess it all depends on what you’re comfortable with. Clients come and go for a bunch of different reasons that may have nothing to do with the quality of your work. So while it may be less of a hassle to deal with three big clients than (in my case) 25 smaller ones, if you lose one of your three, that’s potentially one-third of your income down the drain until you can replace them. If I lose one of my 25, however, I hardly notice it, and I regularly get requests from new clients anyway.

Different strokes, I guess, but I imagine that the size of your client base will also vary depending on the nature of your business. I’m a translator, but I could see how, say, a voice-recognition software consultant might be more likely to serve fewer clients but with bigger contracts.

Rebecca

I think it helps to get “clear” about who your clients are. Would you rather have a 100 clients that pay you $50 per hour or $500 per project (just examle) or 3 clients that could pay you $3k or more. I’ll take the 3 clients. After listening to Life Coach Cheryl Richardson, I determined who my clients are. It helped me a lot.

Peter Garner

OK, this is somewhat tangental, but whenever I get a big contract, especially if it’s from a relatively new client, I always make it clear that I can’t work exclusively on that job and that I have other clients whose needs must also be met.

I have found that for the long-term health of your business, it’s rarely worth taking on big jobs with short lead times that prevent you from accommodating your other clients (or potential clients) for an extended period. I made that mistake once and it took my business 6 months to recover.

If this is explained properly, most clients who use the services of a freelancer will understand that there are certain limitations to doing so. The upshot of all this is that by making sure your clients know they can’t have your exclusive attention, at least not for extended periods of time, it’s easier to maintain a diversified client base and not rely on that one major client so much. Yes, you may lose out on some of the big, lucrative rush jobs, but to be honest, the short term gain is rarely worth it to either your bottom line or your sanity the long run.

Meryl Evans

Peter, excellent insight and an important one to consider. Thanks for bringing up an angle some of us may not have encountered.

Marketing Actuary

Thanks for these great tips. As a side benefit, you get new clients too :)

Email newsletters are underrated. Marketing through blogs, LinkedIn, Twitter etc requires recipients to signup. The hassle of that extra step reduces your reach. With an eNewsletter, you save clients/prospects time and effort by subscribing them yourself. (This assumes you have their permission.)

Meryl Evans

Yes — that’s key. Too many marketers think exchanging emails is permission enough to put someone on your mailing list. It’s not. As for sign ups — I think many of us are already on these services, so it’s key to stay up to speed which services are most popular as names can change (remember MySpace?).

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