A diverse range of work can stabilize revenue and lead to new opportunities.
As a small business owner, you know how important it is to create sustainable relationships with clients, but relying too much on one client for the majority of your revenue is risky business. Should your business, their business, or the economy change, you could be one client away from losing it all. However, it’s never too late to start diversifying your client base.
To start, you can avoid a heavy customer concentration by starting to diversify your client list from the beginning, says NFIB member Brett Ballard, senior vice president of Southern Independent Bank in Opp, Alabama.
“Some small businesses may think they need to get good at what they’re doing before they can grow and get new customers, and this is very true,” he says. “But, from a diversification standpoint, the answer is to start as soon as possible.”
Talk to Your Customers
Capitalize on the goodwill you’ve created with existing clients and ask them to send other people your way. Loyal customers are typically happy to share your business with others—then the cycle continues.
But don’t just ask for referrals, says NFIB member Kevin Forsyth, owner of Forsyth Consulting in Birmingham, Alabama.
“I always recommend talking to customers and asking them if they’re doing business with [competitors],” he says. “I like to ask them, ‘How did you make the decision to use that product? What was your thought process?’”
Understand the Competition
It’s critical to know your competitors’ strengths and weaknesses, Forsyth says.
While you can always read industry publications or follow competitors on social media, Forsyth suggests going straight to the source.
“Not everyone likes this, but I call it the ‘dummy customer role,’” he says. “Just call up your competitor, act like you’re a new customer, and get them to sell you the product. You’d be surprised how much folks are willing to share.”
The more information you have, the more you’re able to tailor your next product or service.
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Attending industry events not only help you stay on top of the latest happenings but introduce you to prospective clients.
But don’t just join the organizations in your specific industry. Get involved in ones that offer new opportunities. For example, Forsyth, who sells licensed background music, is a member of the National Apartment Association.
“We found that apartment complexes were getting hammered by copyright issues for playing unlicensed music from CDs or music streaming websites, but our music is licensed,” he says. “If your goal is to enter a particular market, you have to find the businesses that are struggling for a solution.”
Since entering the apartment properties market a year ago, Forsyth says his son Ben, who also works for the company, is now strictly dedicated to that vertical.
“We saw the need, and we’re doing really well,” Forsyth says.
Improve Your Online Presence
In 2018, 93 percent of U.S.-based consumers visited an online retail store on the web, and 77 percent made purchases online. No matter the business, those clicks and purchases begin and end with a strong online presence.
Your website should look professional and highlight your company’s strengths. Potential customers often read testimonials, so be sure to collect those from happy customers and keep them current on your site. Keep all of your website content fresh. Be sure to promote your content to drive new potential customers to your website: offer a free newsletter in exchange for an email address, try pay-per-click advertising, and actively promote your business on social media if your target market is active on it.
You never know where your next lead will come from, so making a lasting impression online can make all the difference.