PostedOn: 2017-11-16 11:19:48
Most businesses start with a kind of desperation for clients; revenue is limited and cash is tight, so entrepreneurs use every tactic they can to grow their client bases. When you’re eager to keep your cash flow positive and support the business through its earliest stages of development, this approach is effective. Unfortunately, its successful implementation leads to an ironically good problem to have: too many clients to handle.
The Problem With Too Many Clients
After reading that, you may wonder how too many clients could actually be a bad thing. It’s pretty simple, though. The more clients you have, the less time and fewer resources you can spend per client. If you have more than you can reasonably handle, you’ll be forced to decide between turning down exciting new business and letting a loyal client go. If you don’t choose either, your service could suffer as you try to assign your finite resources to a growing number of tasks and responsibilities.
Fortunately, there are some strategies that can help you manage these excessive clients. All of them fall somewhere on a spectrum of expanding to meet the new demand, or refining the demand to better suit your business:
- Use PPM to choose projects and assign resources. First, make sure you’re using project portfolio management (PPM) software. PPM is all about choosing the projects that are most profitable for your company while prioritizing the ones that are most urgent. It also forces you to allocate your resources intelligently, so you have the right teams and individuals working on the customers and projects most likely to earn you a profit.
- Use a CRM to keep track of your customers. One of the best investments you can make to proactively manage your customers is a customer relationship management (CRM) platform. The right CRM will allow you to enter details on all your customers, and manage them in a central platform that your entire team can access. You’ll be able to chart out exactly how much they’ve spent with your company, what future projects they might have in the pipeline, and other details about their value to your organization. From there, your customer decisions will be much easier, and you might find yourself able to manage a greater number of total customers.
- Introduce an incentive program. Try to introduce an incentive program that encourages your most loyal and most profitable customers to stick around. It’s better to have 3 or 4 “main” customers who send you a ton of work than it is to have dozens of customers who only contact you as needed; the incentive program will naturally filter out the least profitable and least interested customers from your roster, so you can spend your effort on those that matter the most.
- Invest in company expansion. If you have enough revenue coming in, you should consider expanding the company in some way. For example, you might choose to hire more people so they can handle the additional workload, or you might add a new partner who can deal with a share of the work, or automate some key process that usually holds you back.
- Start a referral program. If you’re getting more clients than you can handle, consider starting a referral program. Partner up with a company similar to yours (perhaps even a direct competitor), and refer some of your excess customers to them; you’ll satisfy some of your unnecessary customers demand, and take a cut of the revenue your partner gets from the deal.
- Consider increasing your prices. If you find that you still have customers knocking on your door after implementing some management and efficiency strategies, you may consider increasing your prices. Most companies are reluctant to increase prices because they fear it will lower demand (and therefore, revenue), but if you’re already suffering from too much demand, this negative consequence becomes an added benefit.
Try using these strategies one at a time to see which ones are most effective for your particular problem, or use them in tandem to create the most significant cumulative effect. “Too many clients” is a pretty good problem to have, but if mismanaged, it can still lead to further problems in your business, so take it seriously and strategize carefully.