Sales can sometimes feel like a bit of a balancing act. From devoting enough time to finding new customers as well as taking care of your existing ones, to ensuring that you have enough capacity to meet customers' demands, sales is definitely more of an art than you might initially think. However, when it comes to your customer base, it's also important to ensure that you have a range of customers to offset risk.
Business security is only possible if you have a wide range of clients. The smaller your customer base, the more susceptible your business will be to peaks and troughs. If you're concerned that your customer base could be a little lacking, then here are four great reasons to put your eggs in more baskets:
Overcome Seasonal Dips:
If you focus primarily on one or two industries, it's a great idea to bring a more diverse range of clients on board to act as a safety net during seasonal lulls.
Lots of industries are prone to seasonal dips, such as motorsport, consumer products, agriculture and many more. For subcontract suppliers who predominantly service those industries, this can prove to be something of a headache. Having manic peaks followed by agonisingly slow troughs does not provide a business with stability or security - furthermore, it can make it very difficult to plan your production schedule.
If you focus primarily on one or two industries, it's a great idea to bring a more diverse range of clients on board to act as a safety net during seasonal lulls. The best time to be looking for new business is when you're already busy, as it means that you won't be taking on work - or indeed, clients - that aren't a good fit for your business out of desperation.
READ: How To Grow Your Engineering Business
Take Back Your Autonomy:
By taking on more customers, you'll be able to regain autonomy over your business and only agree to terms that work for you.
If you have a couple of large customers that take up a lot of your capacity, then you may find yourself held to ransom by their demands in order to keep your business afloat. Some larger OEMs have been known to implement 60, or even 90-day payment terms, which some suppliers will accommodate in order to secure the business of a well-known brand. However, problems can start to arise when production ramps up, as suppliers then find themselves at the mercy of their customers and whichever terms they decide to hold them to.
By taking on more customers, you'll be able to regain autonomy over your business and only agree to terms that work for you. There can be nothing more frustrating than waiting to get paid - especially if the work in question makes up a majority of your business. Floating incurred costs in the meantime has never been harder thanks to soaring material prices, but it needn't be this way - by simply expanding your customer base to include plenty of clients who pay on time, you can become more selective about the work you agree to take on.
READ: Big Vs Small - The Implications of Late Payments For SMEs
Industry-Proof Your Engineering Business:
Having a majority of customers from the same industry is a risk, as those customers will likely undergo the same peaks and troughs at the same time.
The COVID-19 pandemic showed us that it is possible for many industries to shut down overnight under certain circumstances. When production ground to a halt across numerous sectors in 2020, many subcontract suppliers felt the effects; however, the businesses that suffered the most were the ones with compact customer bases, made up of a few key players from the same industry.
Now that the pandemic is behind us, it's important that we learn the ensuing business lessons. Having a majority of customers from the same industry is a risk, as those customers will likely undergo the same peaks and troughs at the same time. Simply put, if that industry suddenly goes quiet, then so will your business unless you have other clients who can pick up the slack. It's a dangerous game to play, as we cannot predict industry trends with certainty, meaning that you could find yourself in a precarious position very easily.
READ: Subcontract Sourcing Requirements - An Industry-By-Industry Guide
Fill Production Gaps Easier:
As it takes time to find new customers, it's a wise idea to make hay while the sun shines.
One of the main reasons why it's good to have your eggs in multiple baskets is because when one customer goes quiet, another can pick up the slack. This gives you much more security and also allows you to fill capacity easier, offering you more control over your production schedule.
As it takes time to find new customers, as well as to establish a great relationship with them, it's a wise idea to make hay while the sun shines, so to speak. If you wait until production has fallen flat, then you're likely to run into problems finding work quickly enough so that your business is not affected. Instead, it's prudent to dedicate time to finding new customers no matter how busy you may be - this will undoubtedly pay dividends in the event that your business runs into unexpected workflow issues.
READ: The Number of Quotes It REALLY Takes To Win a New Customer
How To Grow Your Customer Base:
There are many methods you can use to grow your customer base. Cold calling prospective customers to arrange visits can be very successful; however, this will depend on your confidence in approaching companies with no prior relationship. Email and social media marketing can also prove very effective, but once again, they do require a certain amount of marketing knowledge to bear fruit.
Qimtek's supplier membership packages are designed to take the stress out of approaching new companies with a view to winning work.
Qimtek's supplier membership packages are designed to take the stress out of approaching new companies with a view to winning work. Buyers come to us with their subcontract engineering enquiries and provide us with drawings - we then pass them onto our members with the necessary capabilities, along with the buyer's contact details. If you're interested in the project, simply quote the buyer directly! Even if the enquiry is not a good fit for your business, you can approach the buyer to discuss additional opportunities. This saves you time by bringing active buyers directly to your inbox, who want to hear from Qimtek members who can assist with their subcontract requirements.
In addition, we can also build you a successful email marketing campaign and even manage your social media accounts on your behalf!
To find out more about our membership packages, or to request a no-obligation demonstration of our sales platform, simply click the link below. Alternatively, please email [email protected] or call our membership team on 01256 394 500.
Click here to find out more about our membership services and start growing your customer base.