It is common, for businesses in the start-up phase to have a handful of high paying clients. The mistake in starting out in this is in the the owner remaining comfortable at this level. This is frequently seen with consulting type of businesses with only a few employees, who may land one big client worth $100K or so annually in revenues. This is great until the contract ends and you haven’t marketed for new customers to build some financial sustainability for the longterm. This article is for any business owner who have lost one of their top customers and may be scrambling to recover. Small business owners seeking to gain new customers will also benefit from this article.
Assess the Reason for the Loss
- What reason did the client give for not utilizing your product or service any longer? If one was not provided, ASK!
- Was it poor customer service?
- Consistent failure to meet their needs and/or expectations?
- A change in their needs?
The answers to these questions could uncover a misunderstanding that could either be resolved or that could bring insight helps you avoid this situation in the future.
Determine what your company could have done better and how you can implement improvements
No customer is guaranteed to be a customer for life. To increase your customers, we recommend you seek to understand the needs of your customers on a continuous basis. Additionally, a regular needs assessment of your products/services will ensure your offerings meet your customers’ changing needs and helps you determine if any should be eliminated.
Determine who your target customers are
Most often business owners use what I call the “toss the net wide” approach to gaining customers, particularly in the beginning stages of operations. This approach seeks to bring in anyone who will give you their money in exchange for your products or services. Once even a small change in their taste or price preference changes, this could mean no more revenue for your business. Instead, we suggest that you have an understanding of who your BEST customer is and tailor your efforts to gaining more of these types of customers. This way you ensure that you are aligning your offerings with your prime customers’ needs.
Assess if your offerings are aligned properly with the right customers
In closing, losing a top customer can be a temporary negative impact to your bottom line, if not replaced, but it can be a game changer that elevates your business if handled properly.
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