Fifteen years ago, I lost two of my biggest clients in a span of about two months. Together, they accounted for nearly 80% of my income. That was scary. But I didn’t panic. Instead, I devised a strategy to make up for the lost revenue.
Let me digress for a moment to define ‘big client.’ It doesn’t matter if a client is worth $10,000 or $100,000 per year, they are big if they account for more than about 20% of your annual revenue.
OK, back to my story. In an ideal world, I would have simply replaced the two lost clients with two more of the same size. But one of the universal laws of business states that the larger the deal, the longer it takes to close. In other words, it takes longer to reel in a big client than a small one.
Also in an ideal world, I would have had several other ‘big’ prospects in my sales pipeline just waiting for me to close the deals with them. Wrong again. I was caught flat footed. I had been so busy (and content) working with my portfolio of clients, I hadn’t bothered to do much prospecting. So, I had to scramble to find some new clients – fast.
I realized I couldn’t replace the two biggies with two more biggies because it would have taken too long. I had to replace that lost revenue quickly.
I devised a two-part strategy. First, I pursued the low-hanging fruit – small clients I could reel in quickly. I figured I needed six to eight just to equal the lost revenue of the big two. Eight new clients, even small ones, seemed unlikely, which led me to the second part of my strategy – get additional work from my existing clients.
Both strategies paid off. I landed a few new smaller clients. And by taking a more proactive approach with my existing clients, I turned a couple of them into bigger clients. Overall, I had to work a lot harder that year, however, my income dropped less than five percent overall. More importantly, I learned some critical business lessons:
- Never stop prospecting for new business, no matter how busy you are.
- Keep a diverse mix of clients, big and small, so you don’t take too big an income hit when you lose one.
- Anticipate losing some clients every year.