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For the first decade of my consulting
business, I depended on "on-off" clients: I'd do the
work for them, and then they'd have no need for my type
of work again. I'm not alone. Many businesses are built
around one-time customers, but that's a dangerous
business strategy.
I developed business plans. And once a person had a
business plan, they didn't need me any more. Right?
Wrong. As I've learned in my own company, a successful
enterprise needs to revise a business plan at least once
a year. But I wasn't getting this potential recurring
business. My income was completely dependent on finding
new customers.
Selling every customer only one item -- whether a
business plan, a landscape design, a kitchen remodel --
is a precarious way to earn a living.
Of course, I was doing very well. Somehow the clients
just kept coming. I'd like to believe it was solely due
to the fact I was a brilliant consultant (will you take
my word on that?) but I was also lucky.
The truth is that whenever you have a business totally
dependent on new clients, you're vulnerable. If economic
conditions change, or a new competitor enters the
market, you may suddenly see your customers disappear.
However, if you've managed to build up a stable of
loyal, repeat clients -- even if they reduce their
purchases in a weak economy -- you're better able to
maintain at least a basic level of income and keep your
business alive.
Many of us know we need to become less dependent on
"one-off" customers, but we don't know how. What if the
very nature of our business means customers only need us
one time? Regardless of divorce statistics, can a
wedding planner really build up repeat business?
Well, that's a tough one. But even there, the answer is
"yes."
So, what types of things can a one-off business offer
their customers to create a renewable income stream?
"Tune-ups" and "check-ups": Your doctor and
dentist and auto mechanic all have you come in
regularly; why not ask the same of your customers? A
landscape designer can provide semi-annual or quarterly
garden updates. I should have offered annual planning
sessions. And that wedding planner? How about offering
-- on a complimentary basis -- to plan a small first
anniversary dinner, and then provide ongoing special
anniversary and party (including children's birthdays)
planning? This might not bring in a great deal of income
directly, but it keeps your name in front of the client
for referrals.
Support services: Many businesses dependent on
one-off customers provide design or construction
services. But most customers also need ongoing
maintenance and support. For instance, a website
designer's clients need site hosting and ongoing
updates. Can you provide a one-stop shop -- hiring a
low-level staffer to do updates and subcontracting the
hosting?
Products: Finally, are there products you can sell or
create that customers need to replace on a regular
basis? Consumables are a great source of continuing
income. Just think about inkjet printers -- the real
money comes from selling replacement toner cartridges.
So what's holding those of us who continue to serve only
one-off customers back?
Fear of being bored: Face it, working with new
clients can be more interesting than working with
customers over and over. Creating a new design is more
fun than providing maintenance. But, trust me, you'll
appreciate the money from the humdrum stuff when new
business dries up.
Business structure: Providing service to clients
on a repeat basis means managing a more complex
schedule, hiring subordinates or dealing with
subcontractors. That isn't the kind of business you want
to run. But do you want to risk having no income at all?
Ego: I know what you're thinking: "My clients are
hiring ME! So I can't bring in anyone else to help with
the ongoing stuff. And I've got all the work I can
handle now." Well, your clients do want to work with
you, but they'll understand that you have staff to do
some of the ongoing tasks.
Remember, you never want to lose a satisfied customer.
Look for ways to keep -- and serve -- them on a repeat
basis. Your bank account will thank you.
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