The Value of Diversifying Your Customers and Clients
No matter the industry, it is always beneficial to diversify your portfolio of customers and clients. Simply put, it prevents you from placing all your eggs in one basket. It also helps to keep your day to day work interesting, not monotonous.
Here are six types of clients of which every business should have at least one. Depending upon the types of services you offer, your model might best serve just one or two of these categories. However, the pros and cons associated with each present some compelling reasons as to why you should strive to diversify and spread out your clients. In the long run it will help you balance your ups and downs and achieve a valuable book of business. Let’s take a look…
The longstanding clients
Pros: These clients have been with you since the start. At this point, you intimately understand their business needs and personal preferences. You’ve become very efficient with completing their work after earning your way through the learning curve. In addition to being good clients, they have also likely become good friends.
Cons: Being with you from the start often means you’ve also “grandfathered” them into some pretty nice pricing. Unless the scope of their work dramatically changed, you likely haven’t had the opportune time to raise your rates with them. The level of comfort and closeness within your relationship can prevent you from making firm business decisions because you value their loyalty and don’t want to do anything to damage it– even if it’s the best decision for you.
The new clients
Pros: In contrast to the longstanding clients, new clients offer you the ability to quote your prices at today’s rate – no grandfathering needed. They are also a breath of fresh air that embrace the suggestion of new tactics and strategies.
Cons: There’s definitely a learning curve with taking on a new client which is why you don’t want ALL your clients to be new at the same time. It can take awhile before the time you’re putting into this account will finally start being equal to your hourly rate. There’s also the uncertainty of “Do they like me?” or “Are they going to stick around?” that’s more certain with longstanding clients.
The big clients
Pros: Big clients (usually) mean big paychecks. They have the budget to hire you for a variety of services that allow you to showcase all that you are capable of and deliver full results.
Cons: If you should have a big client fall off, it can be devastating to your bottom line. While it’s a goal for many business owners to have fewer, but bigger clients, this will most certainly lead you to placing too many eggs in one basket. They can also be very demanding and because they’re paying you a pretty penny can expect unreasonable amounts of your attention.
The small clients
Pros: Small clients (ideally) demand less time and attention because they have smaller accounts. Their services are well scoped to adhere to their budget and as a result, it’s easier to quantify the services that are delivering the best results.
Cons: The limited scope of service can also limit the full extent of the results you achieve. While ideally small clients take up less of your time, I haven’t always found that to be the case. This can be where you find business owners who are very “hands-on” to the point of micromanaging. Their limited budget may also lead to unrealistic expectations for what you can achieve on for them.
The challenging clients
Pros: We all benefit from a good challenge from time to time. These are the clients who keep you on your toes, ask a lot of questions and may even change their own mind 20+ times before a project is complete. Alas, there is a pro in here and it’s that these clients help make you a better worker for all your other clients. They also set the standard for “difficult client” that make all others seem like angels.
Cons: These are pretty obvious. Challenging clients can waste a lot of your time and even cost you money. They can also make you feel undervalued and underappreciated. If they move from “challenging” to “disrespectful” it’s time to let them go!
The easy-going clients
Pros: Compared to the challenging clients, these clients are a welcome relief. Sometimes it’s nice to finish a project and just have someone say “It looks great!” They’re also open to new ideas and don’t question the expertise for which they hired you.
Cons: Sometimes you wonder whether these clients even really have an interest in the work you’re doing for them, because they seem to just say yes to everything. How can you not have at least one question or suggestion to bring to the table? This leaves all the planning and strategizing up to you with little constructive feedback.
Do you have a diverse portfolio of clients? What steps do you take to achieve this? Share your thoughts by commenting below!