When I chat with the owners of market research firms across the U.S. about the growth of their businesses, three primary strategies rise to the top:
- Referrals
- Key contact relocation (they leave and take you with them to their new employer)
- Repeat clients
And if these are among the top drivers of the growth of your business, too, you need to be concerned. Why? Because in every one of these very common scenarios, you are relying on someone else to make your firm successful. Is that really what you want?
By the way, there’s absolutely nothing wrong with any of these strategies, but as much as you rely on them for your success, I promise, they will stop working and then – because you’re not doing anything proactive – your growth will diminish. Let’s look at each of these…
Referrals. Who doesn’t love referrals? Especially those that come out of the blue… they’re wonderful! But they are out of your control. Even if you do great work, you can’t assume that a client will refer others to you. They might… but you can’t count on it. Unfortunately, too many business owners DO count on it… and when the referrals slow down (or stop altogether), their businesses take a big hit.
Key Contacts Relocating. If ever there was proof of a buyer’s trust and confidence in your firm’s work… it’s when a key contact leaves his or her current employer and continues to use your services at their next company. And it happens pretty often in our industry. But if you’re relying on it for revenue growth, you’re treading on thin ice. Here’s why…
- Regardless of how much your contact likes you, there’s no guarantee he or she will take you with them.
- Even if they do take you along, there’s no guarantee that his or her new employer will accept you as a supplier.
- And if they do take you along and you are accepted, there’s no way to know how much revenue it will be worth. Or how much ‘share of wallet’ you’ll receive.
- But the biggest challenge is this… because you’ve developed such a great relationship with this key contact at his or her current employer, often, you have no relationships with other employees there. Everything has always funneled through your key contact and it has gone so well, you never bothered to build ‘contingency’ relationships. And so, when your contact leaves (and they always do) so does your relationship with that company. And with it, the business.
Repeat Clients. Repeat clients are the lifeblood of every healthy company. You do good work and clients keep coming back to you for more. At least that’s the hope. But it doesn’t always work out like that.
The fact is, when your work is good, you get complacent – arrogant, even – and assume that the good work is all it takes to bring clients back. So, in between projects, you don’t maintain relationships. You stop reaching out and these good clients don’t hear from you for months at a time (usually until the next project rolls around). But guess who they ARE hearing from? Yep… your competitors!
Don’t think this is happening at your firm? Try this… have your accounting team run one report for you: revenue by client by year, for the past five years. When we do this with our clients, they’re shocked to see how many clients – ‘good clients’ – they used to work with but don’t any longer. The business simply faded away because they didn’t spend the time necessary to maintain and deepen those relationships.
Summary. As I stated at the beginning, all of these strategies – referrals, key contact relocation and repeat clients – are all really good things. But don’t let them lull you into a false sense of security. Even at you’re crazy-busy – like many firms are right now – YOU need to invest in some level of proactive sales and marketing. YOU need to make things happen. YOU need to take responsibility for the growth of your business and not rely on others. Do that… and you’re setting yourself up for a long run of success.
Good luck.