The Break Up: what to do when your biggest customer leaves

Bart Burggraaf

A few years ago I got an email saying ‘we need to talk’. When it’s a girlfriend you know what this means, but to my knowledge we just had a business relationship. This was our biggest customer by far, and the news couldn’t be good. When I heard the words I knew were coming, my […]

what to do when your biggest customer leaves

A few years ago I got an email saying ‘we need to talk’. When it’s a girlfriend you know what this means, but to my knowledge we just had a business relationship. This was our biggest customer by far, and the news couldn’t be good. When I heard the words I knew were coming, my heart still skipped a few beats. What does this mean for the company? Will I need to let go of some staff? How will we survive?

Reassuringly, we realized a long time ago that you can be the best company in the world, have personal relationships all over the place and deliver incredible services and still lose business for one menial reason or another. It’s a reality of doing business, and I think most business owners realize their vulnerability when one client brings the lion share of revenue. To prepare for this reality is quite another thing though.

The problem is that when a customer comes on board that is so large they instantly become your biggest, most of your resources are devoted to that customer. You lose focus of the big picture and often fail to prepare for when the times are not that great. So really, ‘what to do when your biggest customer leaves’ should be ‘what to do BEFORE your biggest customer leaves’. We all know the deal; diversify, put resources back into new business, make sure your cost is as variable as possible. But practice is something else.

So when that day of reckoning invariably comes, it is time to suck it up and cut fixed cost. The means letting some people go, perhaps moving into a smaller office and lower executive compensation. The same goes for your marketing, cut out all the brand stuff and focus on tactical, variable cost that gets you direct business, and perhaps crank it up a notch.

So then when your cost are as variable as they can be, you have two choices to grow your business back. One option is to try and ‘buy’ new business. Lower your pricing, hire that sales person with the portfolio or even acquire another company. The other option is to hustle. There is a reason why you got so far in the first place. Pull together the team, explain the issues you are facing and get everyone’s ideas on how to get in new business and save cost. You’ll be surprised what comes out of the woodwork.

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