Have One or Two Big Customers? Beware!
Beware of thinking it is very profitable to have one big customer that you get to know extremely well, is easy to do business with, gives you most of its work, and is like family.
Last week, I decided to call a printer I started speaking with back in 2007. This company was in Huntington Beach, CA. That’s right, WAS. The printer was in business at least until September 2010, which was the last time we connected.
Back in 2007, I met the owner after speaking at a conference. He mentioned liking the idea of surveying customers, but the shop really only had one big customer that represented about 80 percent of its business. My first reaction was, “You’re nuts! Isn’t that scary?”
“Yes, to some degree,” he admitted, with a smile. Speaking at that time, the owner further noted, his business is very profitable and the customer is like family, the shop gets all its business, he knows the executives, and they are easy to work with. He just wished all the other smaller customers were that way. He said the business was easy to manage this way.
Fast forward to September 2010. I noticed he signed up to attend a webinar I was giving, but he never made it. I thought maybe he was busy, but for the past six months I’d been wondering how he had done over the course of the past three years. Did he still have that one big customer? Had he diversified, found other customers? Was he doing well after this horrible recession?
On April 28, 2011, I decided to pick up the phone to see how he was doing. When I called, I got the “this phone number is no longer in service” message. At first I thought maybe I dialed it wrong, so I dialed the number again. Same result.