RUN 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?