Comments on: Rules for Entrepreneurs – Avoid relying on a few whale customers http://technosailor.com/2008/06/19/rules-for-entrepreneurs-avoid-relying-on-a-few-whale-customers/ Business and Technology with Common Sense Thu, 24 May 2012 21:21:16 +0000 hourly 1 http://wordpress.org/?v=3.4-beta4-20883 By: Scott Ellis http://technosailor.com/2008/06/19/rules-for-entrepreneurs-avoid-relying-on-a-few-whale-customers/comment-page-1/#comment-44223 Scott Ellis Fri, 20 Jun 2008 20:53:33 +0000 http://technosailor.com/?p=3182#comment-44223 Great post Steve and I couldn't agree more that in the beginning whale customers are great to have. And while I agree that diversification is important, it holds true for even many of the largest companies, not just individual consultants, that the vast majority of income will come from the minority of customers. My experience was more along the lines of an 80/20 split though 90/10 is not uncommon. Again, agree with diversification, particularly across industry if you are able to do so, such that if your biggest 2 clients are in Telecom (for example) and the Telecom industry has a pull back, you are more likely to loose 2 whales than one, but if one is Enegry you are likely in better shape. Consultants and entrepreneurs should also recognize that the level of effort and cost of acquisition of new business with a current (and happy) customer is much lower than acquiring a net new client, so business men and women should continue to put a great deal of emphasis on those customers. Hands down, it's tough with only 24 hrs in the day to chase both but I would caution people about focusing too much on net new if it comes at the expense of the whale they currently have. Great post Steve and I couldn’t agree more that in the beginning whale customers are great to have. And while I agree that diversification is important, it holds true for even many of the largest companies, not just individual consultants, that the vast majority of income will come from the minority of customers. My experience was more along the lines of an 80/20 split though 90/10 is not uncommon.

Again, agree with diversification, particularly across industry if you are able to do so, such that if your biggest 2 clients are in Telecom (for example) and the Telecom industry has a pull back, you are more likely to loose 2 whales than one, but if one is Enegry you are likely in better shape.

Consultants and entrepreneurs should also recognize that the level of effort and cost of acquisition of new business with a current (and happy) customer is much lower than acquiring a net new client, so business men and women should continue to put a great deal of emphasis on those customers. Hands down, it’s tough with only 24 hrs in the day to chase both but I would caution people about focusing too much on net new if it comes at the expense of the whale they currently have.

]]>