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How to Handle Losing an Important Client
Boost revenue and reduce risk with a diverse customer base.
In 2008, Jennifer Garcia was on top of the world. She had just joined a newly formed marketing company as a partner and account manager. Soon after, she scored a major client — a global mobile phone manufacturer which at one point accounted for over 50 percent of her firm’s business. It would turn out to be a mixed blessing.
“I knew as we were going through that ‘wow’ period and experiencing such tremendous growth that it wasn’t going to last forever,” says Garcia. “From day one, I was pretty aware that as this account grew, I would be responsible for almost the entire revenue for the company. Times were great. We were all earning really good salaries, but a lot of that rode on my shoulders.”
Unfortunately, nearly five years into the relationship with the global mobile phone manufacturer, her client sat her down and explained that they were moving on. In less than six months, Garcia and her partners’ primary source of revenue went from $1.5 million to zero.
Overcoming the loss of a big client and the decision to eventually end her partnership shortly thereafter left Garcia feeling exhausted, both emotionally and physically. She took time off to rethink her goals, intentions and purpose, and she says it was the best decision she could have made.
After two years of consulting, Garcia, her husband, Alberto, and their business partner, Stephen Murphy, started over in 2014 with Red Bamboo Marketing, a digital marketing strategy and content agency, where they have met and exceeded their revenue goals for the first full year.
“Taking that time off was so valuable,” says Garcia. “It was time for me to think about what I wanted to do and strategize about how to make Red Bamboo what I wanted it to be before we dived into this business.”
Garcia’s business comeback after losing her best client taught her a lifetime of lessons. She offers advice for other business owners who depend on one client for a significant amount of revenue.
Diversify your client base. It’s easier to recover from the loss of a client when you have revenue from multiple sources. Garcia prospects for new business across a wide range of industries and also ensures that at any given time, Red Bamboo Marketing has clients of different sizes and structures, from small and midsize businesses to nonprofits. “We diversify by not putting our stake in the ground with one industry or one client,” Garcia says.
Reassess your strategy. Consider reinventing your business’s focus. Some ways to identify areas of growth include identifying clients’ future needs and planning for them, or gaining fresh perspectives at business seminars. Also, watch what larger companies that you admire are doing. “Enterprise businesses usually employ smart people, but because of the sheer size of their organizations, they just are not able to move as fast as smaller businesses,” Garcia says. “However, they are good to get ideas from.”
Amass an emergency fund. If a large client does leave, a cash cushion can tide you over until you recover. Strive for six months of expenses plus a line of credit that you can tap if a big project comes along or you want to take on that bigger client. “You need to set that money aside if you want to control your destiny,” Garcia says.
Winning a new client can be exhilarating. However, continue to focus on growing your customer base so your business can thrive no matter what decisions your clients ultimately make.