Turning One-Time Customers into Lifetime Business
BY Rhonda Abrams
For the first decade of my consulting business, I depended on "one-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.
Copyright Rhonda Abrams, 2003
Rhonda Abrams is the author of The Successful Business Plan: Secrets & Strategies and the president of The Planning Shop, publisher of books and tools for business planning. Register for her free business-planning newsletter at www.PlanningShop.com.