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WITH THE Big dogS™ newsletter
Volume 3, issue 33
Is today's success setting you up
for future failure?...John
Marketing idea
In an annual planning meeting with
one of our customers, we were discussing a strategy to keep their
biggest client to under 10% of their total business. Their largest
client had grown to 25% with the next largest client being 4%. At the
current 30% growth rate, one client could comprise 80% of their business
within five years.
What's wrong with that, revenue is
revenue isn't it? Well, what if that client were to suddenly declare
bankruptcy - an all too common occurrence in our customer's marketplace.
"We could recover from losing 25% of our revenue, although it would be
character building." But wait, it gets worse, what about the loss from
accounts receivable - hundreds of thousands of dollars? "That could put
us under." But it get even nastier, what about the hundreds of thousands
of dollars tied up in inventory only of value to their major client?
Three strikes and you're out! This scenario is with a single client
comprising only 25% of the business, imagine the impact if they were 80%
of the total business?
