“I just lost my biggest customer. What should I do now?”
Some companies survive month-to-month on the relationship of just a handful of customers. Worse, some businesses survive in great part because of only one customer.
Many sales reps live off of the once-thought-predictable business of a long-time customer.
Losing even one customer can leave some businesses and sales professionals on the brink of failure and bankruptcy. It happens. I’ve witnessed it and seen the pain.
If you find yourself in the unfortunate situation of having lost your biggest customer, the impact of which is a devastating loss to your income and a serious reduction in cash flow, there are things you can do to survive. But you must act fast:
- Call the customer you just lost — First and foremost, you need to speak directly with the customer you just lost and find out what happened. Why did they stop doing business with you and your company? You need to understand what happened for two reasons: 1) There may be a simple problem or misunderstanding that can be easily addressed to renew the business relationship — your customer may have thought there were no other options to solve a problem they are experiencing; 2) You need to know if something is wrong that may poke its ugly head into other accounts.
- Don’t get desperate — Assuming you’ve lost the customer, take a deep breath. Now is not the time to do something drastic like cutting staff or selling assets. That day may soon be coming, but resist the urge to do anything immediate. Now is the time to think and evaluate all options to survive.
- Map your sales cycle and overlay cash flow — You need to know how bad the problem is and how much time you have to work with. Pull-out your sales forecast and review how much cash you have for each account and how realistic each new opportunity is to close. List each customer order and payment you can realistically expect and determine when you will run out of money and by how much. If you’re a commissioned sales professional, know exactly how and when commissions will be paid.
- Cut back on expenses — List all of your business expenses and see if something obvious jumps out that you can eliminate. Don’t cut anything that inhibits your ability to serve other customers. Look for things you can do without for a while. If you’re a sales professional, don’t buy the boat.
- Look toward your other customers — Losing the customer you most rely on is bad. Losing several customers because something systemic is wrong with your company and you’re unaware of it is disastrous. Get in touch with your customers and talk to them about their business. Ask how your company is doing serving their account and solicit input on ways you could serve them better. Your discussion may uncover a new product or service you can sell them.
- Call colleagues — Now is not the time to begin looking-up old friends and colleagues, but you ought to if you’re not already involved in a network. Let people know you’re expanding your reach into your market, give them an update on the success you’ve enjoyed in your business, and let them know what your ideal customer looks like. Ask if there is someone they know you should speak to about the products and services you offer.
There are dangers to retiring quota from one or a small number of customers — it’s something you should monitor and work to avoid. You need to continually expand your customer-base and diversify revenue to protect your business and income from having a cash flow disaster due to a large customer no longer sending money your way.
Above is my list of 6 things to do immediately following the news that your largest customer has left your fold. What would you add to my list?
This is a guest post by Jim Logan, founder of Saleskick.