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2 cures for ‘One Client Syndrome’

It’s a funny thing, complacency, isn’t it? One minute, you’re riding the wave of success, built upon solid business foundations and a loyal customer base that will stick with you through thick and thin.

Then, all of the sudden, you realise that the loyal customer base is made up of a few small fish and one big fish.

Sound worrying?

It should.

‘One Client Syndrome’ is as pervasive and dangerous as any other illness inflicting business that we’ve heard of in our time as business coaches and mentors, and if it doesn’t get diagnosed and cured, it can be a business killer.

In our eyes, ‘One Client Syndrome’ is essentially the reliance on one client (sounds simple enough). They may be profitable, they may be loyal, but they command a large portion of your consumer base (we look at 30% as the magic number) and hold authority on key dynamics in the relationship.

The risk of becoming over reliant on the “big fish”, is that they can leverage that relationship to shift the power balance between you and them. They can demand pay reductions. They can draw out repayment terms. They can demand an unsustainable quality of service or product that leaves your business crippled.

And you’re stuck, unable to move, bound by the ‘One Client Syndrome’ that’s lead to an inability to shake the grips that reliance creates.

Luckily, vulnerability under these circumstances can be an eye-opening precursor to action. As business coaches, we’ve advised our clients on a couple of techniques that have effectively got businesses out of reliance and back into productivity. They’re basically two-fold.

First, you can grow your business so the proportion of the one client’s sales is less significant on your revenue. Now, we’re not completely naïve. In today’s hyper-competitive business environment, this is a lot easier said than done. Building a more diversified client base is hard work and requires plenty of help and support.

But it isn’t the only option.

Reducing overheads is another effective solution that small to medium businesses can adopt to help reduce the reliance on one client. By reducing overheads, your organisation – whether it’s small, medium or large – can run in a leaner, more efficient manner.

It means if you lose your one big client, you don’t lose your business.

In our roles as business mentors we’ve seen it all (trust us on that one). In our time in helping many Melbourne businesses, we’ve seen many strategies and tactics undertaken to cure ‘One Client Syndrome’.

But by investing time and effort, as well as some logical cost cutting methods, one client doesn’t need to be the only client.

Image source: By Deror_avi (Own work) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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