Key Customers are Key to Growing

Relying on that one big customer can be a risky move.  Many business owners are cautious about concentrating efforts on a single customer and being dependent on them for survival.  Research by Assistant Professor Helena Yli-Renko at the University of Southern California reassures new businesses that it can actually be beneficial to focus on a solitary costumer when starting out.

The study of 180 tech start-ups found that having a key customer helps build clientele over time. At the beginning of the six-year study 30 of the companies relied on a single customer for at least half of their sales.  Of the firms that survived the study the businesses that started with a key customer had an average of 48 clients by the end of six years (compared to businesses that did not have a key customer and ended the study with average of 12 customers.)

It might seem reckless to be dependent on one customer for the majority of your sales.  Placing the future of your business in the hands of a single client is scary, but research shows that it might be beneficial over time.  In the long run focusing on a strong relationship with a key customer can increase a start-up’s total number of customers.

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Posted on August 22, 2011, in Uncategorized. Bookmark the permalink. Leave a comment.

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