At Railtown, we are firm believers in the principle of diversification, which involves spreading your business risks across a broad spectrum of clients. Building and nurturing marketing contacts are essential strategies in this regard. The importance of this can be illustrated by examining real-world examples from major companies that suffered due to losing a key customer or client.
Case Study 1: Qualcomm and Apple
In the tech world, the well-documented legal battle between Qualcomm, a major chipset manufacturer, and Apple serves as a prime example of the risks of relying heavily on one customer. In 2017, Apple, one of Qualcomm’s biggest customers, filed a billion-dollar lawsuit against Qualcomm. This led to a huge fallout between the two, with Apple eventually switching to Intel for its chipset needs. As a result, Qualcomm’s revenue took a substantial hit. (Source: Reuters.)
Case Study 2: Fisker Automotive and A123 Systems
A pertinent non-tech example involves Fisker Automotive, an electric vehicle manufacturer, and its battery supplier, A123 Systems. Fisker relied heavily on A123 Systems for its car batteries. However, when A123 filed for bankruptcy in 2012, Fisker was left struggling to find a replacement supplier. This hiccup significantly impacted Fisker’s production and operations, underscoring the risk of over-reliance on a single supplier. (Source: Car and Driver.)
Case Study 3: Zynga and Facebook
Zynga, a leading online game services provider, relied heavily on Facebook as a platform for its games, most notably FarmVille. At its peak, Zynga derived nearly 90% of its revenue from Facebook. However, in 2012, Facebook decided to revise its algorithm and lessen its dependence on Zynga games, reducing their prominence on the platform. This change significantly impacted Zynga’s user base and revenues, pushing the company to diversify its platforms. (Source: VentureBeat.)
Strategies for Building and Nurturing Marketing Contacts
To avoid such pitfalls and to foster a diversified client base, consider implementing the following strategies:
- Content Marketing: Sharing valuable content can help attract a wider audience and generate more leads. Blog posts, case studies, webinars, and whitepapers are all effective ways to demonstrate your expertise and engage potential clients.
- Relationship Marketing via Events, Conferences, and Partnerships: Relationship marketing is all about building strong, long-term relationships with your clients. Hosting or attending industry events and conferences allows for direct engagement with your client base and provides networking opportunities. Similarly, forming strategic partnerships with other businesses can help broaden your reach and bring more diversity to your client portfolio.
- Full Funnel Advertising: This approach aims to reach potential clients at every stage of their buyer’s journey. From creating brand awareness at the top of the funnel, fostering consideration in the middle, to driving conversions at the bottom – this comprehensive method ensures a steady influx of clients from various sources.
- CRM Systems: Utilizing a Customer Relationship Management (CRM) system can help track interactions with current and potential clients. A CRM system can facilitate better communication, improved customer service, and increased client retention.
- Demand Generation: A systematic approach to generating demand for your products or services can go a long way in diversifying your client base. It involves a mix of marketing and sales tactics, from content marketing and email campaigns to customer testimonials and free trials, all designed to engage and convert prospects.
Business diversification is not just about financial investments; it’s equally applicable to your client base and marketing efforts. By focusing on content marketing, relationship marketing through events and partnerships, full funnel advertising, leveraging efficient CRM systems, and strategic demand generation, businesses can offset the risks associated with an over-reliance on a single client. The stories of Qualcomm, Fisker Automotive, and Zynga underscore the importance of a diversified client base. Remember, it’s essential not to put all your eggs in one basket.
Interested in learning more about how you can diversify your client base? Explore our services to discover how Railtown can help you reach, engage, and convert high-value prospects and deal opportunities.
We’ve combined our extensive experience with leading organizations and generative AI technology to craft this article.