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	<title>VCPlan - The Path to Success &#187; growth</title>
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	<description>How investors qualify entrepreneurs -- How entrepreneurs attract investors.</description>
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		<title>Managing the Large Client List</title>
		<link>http://vcplan.com/archives/655/admin/14-point-list/execution/managing-the-large-client-list</link>
		<comments>http://vcplan.com/archives/655/admin/14-point-list/execution/managing-the-large-client-list#comments</comments>
		<pubDate>Tue, 12 Jan 2010 13:00:00 +0000</pubDate>
		<dc:creator>Steve</dc:creator>
				<category><![CDATA[Execution]]></category>
		<category><![CDATA[account management]]></category>
		<category><![CDATA[growth]]></category>
		<category><![CDATA[opportunity management]]></category>
		<category><![CDATA[revenue management]]></category>

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		<description><![CDATA[100 clients is a lot to manage.  If you worked only 40 hours per week, you could only spend 20 hours a year with each client (if you spread it out evenly). That is a bit better than  1 1/2 hours per month.  That assumes you spend every moment with the client. [...]]]></description>
			<content:encoded><![CDATA[<p>100 clients is a lot to manage.  If you worked only 40 hours per week, you could only spend 20 hours a year with each client (if you spread it out evenly). That is a bit better than  1 1/2 hours per month.  That assumes you spend every moment with the client. This does not include all the other things you have to do in your job.  Say you are very efficient and can spend 6 hours each day with clients. The other time is spent getting to the client, running your business/job, and dealing with everything else in support of those clients.</p>
<p>Now, you only have 15 hours per year for each client. That is just under two business days. You are not going to be able to do much for each client.</p>
<p>The answer is simple: get less clients or hire another person to split up the load.  Or is it that simple? You do not want less clients, because that means less business. You cannot feasibly hire another person, because that is a huge cost.</p>
<p>Reality check: You have 100 clients to manage. They each would benefit from regular phone calls, visits, coaching, etc to grow their business on you.  How do you manage them?</p>
<p>The answer is in prioritization.  Identify the key metrics you need. In most businesses this is revenue.  Most businesses have a metric to grow the revenue from level A to level B.  In reality you really have three metrics: the level of revenue, the rate of change of revenue, and the greatest opportunity for change.</p>
<p>The level of revenue is important because clients typically follow the 80-20 rule. Those 20% of clients represent 80% of your business.  There are a lot of reasons why this happens, but that is not for this discussion. It just does.  Not only do these clients represent the bulk of your revenue, but any changes to them represent the bulk of the changes to your total revenue. Lose one of these, and a lot more of the others have to grow to make up your numbers.  Therefore, the answer is to rank them in order of biggest revenue to lowest revenue.  Those with the biggest revenue are at the top of the list. Identify the top 20% and put them on your list of regularly contacted customers. If you are new to the assignment, you contact them first.</p>
<p>The growth rate is actually more important when you consider that most businesses want to continue to grow. However, an interesting thing happens to many businesses when they reach a certain point. They stop growing. They might maintain their level of business: gaining customers as fast as they lose them; but they do not grow.  You might find that a lot of your top clients fall into this range.  Those top clients will maintain your level of revenue, but when you are given growth goals, where do you find them?</p>
<p>The answer is to try to rank your clients by growth over the previous year.  You will probably find a big difference in the tables with that of your largest clients.  Those at the top of this list, but at the middle or bottom of your total revenue list are those up-and-comers; those clients that are rising stars and will help you in the future.  Identify the top group that represents either 80% of your total growth, or 100% of your targeted growth (whichever is more manageable).</p>
<p>Finally, there are always exceptions. You have a client that is very small with your company, but a large customer with a competitor. There may be an opportunity to take them away from that other company.  You could have a small client that is made of people from another large company. They broke away to start their own business. They have contacts, knowledge (experience) and some cash. They just need time and some help and they will grow.   This third list is hard to quantify and identify. The key thing is to go through every client in your list at least once and just understand a little history about them. What is their current situation and can you exploit it?  Are there synergies with your previous two lists?  If not, then add these clients as special projects. You evaluate them over time, and if they prove out, then you continue to follow them; otherwise you drop them and focus on your previous two lists.</p>
<p>In a nutshell you have three lists: biggest revenue, biggest growth, and biggest opportunities.  These clients get most of your attention. Every now and then you evaluate the other clients to see if they fall into opportunity. Remember, they are already no in revenue or growth so they have to be opportunity.</p>
<p>Of course, every quarter you do a check to see if everyone stays in revenue and growth. Typically, you will not see much change over quarter by quarter, but year by year you might see some significant shifts.  Since you are looking at which clients switch from low revenue to high revenue, or low growth to high growth, and only concerned with the crossover you will typically only see a small percentage of clients change in this list.</p>
<p>This way you can manage your priorities, maintain your revenue, and grow your company.</p>



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