I hear you always warn against having too few clients. We have four clients that provide more than enough orders for us to cover. We are currently only filling about 40% of the business we write. Do you still advise to continue marketing our services to other prospective clients?
I strongly advise that you build a client territory for your business of 30 accounts: 10 key accounts and 20 back-up clients. The key accounts provide you with multiple orders and you are the preferred supplier of top talent. The 20 back-ups know you, know the services you offer, but don’t necessarily call you first or give you multiple orders.
One common denominator of firms that do not succeed was that they had less than five clients providing them with 75% of their business. When those clients stopped hiring, they were essentially starting from scratch.
When you represent the same clients for an extended period of time you may not be generating the highest margins or fees, and they may no longer be one of the most desirable companies in your niche. In this candidate driven market, you need to represent the companies that your candidates identify as most desirable.
It is imperative throughout the life of your business that you continue to upgrade clients. If you have a few clients stop hiring, you have a solid base of other clients who know you, know your services and will prevent you from being slammed by the next downturn.
If your contract and job order flow is strong, consider hiring recruiters who only work the candidate side of the sale to help you fill those orders.
Barbara J. Bruno, CPC, CTS