Peter Kozodoy is a member of the Entrepreneurs' Organization's (EO) New York chapter, and is the partner and chief strategy officer of GEM Advertising, an award-winning communications and marketing agency. We asked Peter to share a time during his entrepreneurial journey when an obstacle turned into an opportunity.
It turns out "The Biggest Loser" isn't just a made-for-television moniker. It's also how I felt when we lost our second-largest client, which represented 30% of our annual revenue. This client also happened to be a cornerstone customer that had helped build the agency in its early years. What's worse, we were jettisoned by a changing of the guard at the presidential level, rather than by an error or omission on our part. Such is the fickle sea upon which we entrepreneurs choose to sail.
But something interesting happened when the sea gods sought to smite our tiny ship. Luckily, this was the better of two types of B2B client breakups because in this case, our 30%-of-our-revenue client happened to also represent 70% of our annual bullshit. Sure, we had married rich, but the relationship was abusive. Abuse notwithstanding, we went through the five stages of grief in that first week. Once we had reached the "acceptance" stage, we realized this was an opportunity for rebirth. Without the steady guidance of monthly checking deposits, we were free to redesign the way in which we thought about business development and client procurement-- and we did.
In less than three weeks, we had redefined what a client looks like in terms of financial spend and value match. We reworked our sales differentiator, and we wrote our own sales and marketing plan to increase our leads pipeline. We organized new assets and prepared to deploy a campaign of our own in our newest markets of Boston, Massachusetts, USA, and Chicago, Illinois, USA. We also strengthened our cash flow by aggressively trimming positions that we should have trimmed months ago, and we looked at our expenses with the zeal of a mad barber.
In the mix of this redesign, we also decided to take our client-loss reactions and systemize all of them, which means we now look at cash flow, human resources and new business development with more aggression, tighter reins and more rhythmic, measurable objectives. The swift kick in the pants we received from that client's departure has ignited a great many positive decisions-- decisions we should have been reckoning with all along. While I'm sorry that it took a big loss to wake us up, I'm also grateful. I'm certainly grateful for our former client's patronage in the first place, but I'm also grateful to have the opportunity to capitalize on a fresh start.
I admit: As an (unfortunately human) entrepreneur, I can only consider so much at any given moment. Every new idea, book, speaker, client interaction or employee occurrence has given me a linear ladder step forward in terms of understanding and decision-making. However, I have realized that advancement isn't a linear ladder; it's a sprawling cargo net. I need to regularly step back and look at the entire cargo net of opportunity all at once, rather than wait for events to unfold on their own. Simple though it sounds, mine is a classic case of being proactive versus reactive.
In the end, I've learned that sometimes if you want to win, you have to lose. As I said to my team on that fateful day of 23 May, "onward and upward." See you at the top of the cargo net!