Is it better to have one, million dollar customer or one million, one dollar customers?
I've wrestled with this question a lot over the past year. TaskUs is a business that has a lot of customers who spend relatively small amounts of money with us. Smarter Social Media is a business that has a hand full of customers who spend a lot of money with us.
Jamie argues that a large customer retail base gives you control over your destiny. And while I think which is better depends on the nuances of the individual case, I've got to agree with Jamie that a school of fish is better than a single whale. With hundreds or thousands of customers your bets are hedged. You may have more customer service stress or a harder time growing the business quickly, but the security more than makes up for this.
At Smarter Social Media we had plans to launch a huge campaign late last year. The kind of campaign that we had to hire and train new staff for. The kind of campaign that required the investment of time and dollars. At the last minute the customer put on the brakes. Fortunately for us this was a minor delay and the campaign is well under way currently, but if this client had pulled out together our business would have been hurt bad.
At TaskUs we sign up new customers effortlessly on our website. There is little investment as the infrastructure is already in place and grows organically to match our client base. While we are never happy to loose a customer, there is no single TaskUs customer that could undo that business.
1 comments:
am i the only one who comments on your thoughts? maybe everyone else tweets you! This is a interesting paradox. In one of my marketing classes in college they taught me its not about your customer base size, its about the profit you take per customer. It's much harder to manage 1000 customers at $20 per profit than manage 500 customers at $40 per profit. But its the same result.
But if your base is too small, you can devastate your business when you lose a few.
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