Don’t Let One Client Dominate Your Revenue Stream

April 2, 2018


I should have gone out of business just over seven years ago. That’s when I re-learned a lesson I had known all along. Don’t allow one client to dominate your revenue stream so much that losing that client could put your entire business in jeopardy.

It would be nice to say my mistake was a lapse in judgment, but it was a little more than that. It was a strategic error.

A happy client

You see, I had a long history with the client organization and was enamored with everything about it. For that reason, I had made the very strategic decision from the outset that I would allow no distractions to interfere with that relationship. I was going to build my business around that client.

My thinking was that with a happy and satisfied anchor client, I could spread selectively into other areas, but only to the extent that those clients didn’t interfere with said anchor client.

For a couple of years, this seemed like the right strategy. I had turned away several business opportunities, selectively accepting others. This one client remained king in terms of revenue and my priorities.

As a result, I delivered a steady stream of impressive results, and people throughout the client organization were as impressed as a PR consultant could want.

Then something happened. The fickle nature of the client’s C-suite — something that I had heard about periodically — had revealed itself to me suddenly and without warning. The organization’s current chief executive, as he was apparently wont to do, decided one day to shake things up on the communications front. I wish there were a deeper explanation than that but, seven years later, that’s still the most accurate way to describe the head honcho’s decision to put the organization’s PR services up for bid.

Knowing that if my solid track record alone, of which he was well aware, wasn’t enough to prevent him from launching the RFP process, my time would be better spent replacing his business rather than trying to save it.

So, that’s what I did. With 90 days left on our contract, I set about revamping my entire business model and conducting aggressive business development outreach. Thanks to good discipline, some important strategic repositioning and probably a little divine intervention, my business did not miss a beat.

In fact, the following year (without that client) turned out to be my best year ever to that point.

A lesson learned

What did I learn?

  • Never let one client dominate your revenue stream so much so that if you lose that client you can lose your business.
  • Never stop your business development efforts no matter how busy you are with existing clients.
  • Be prepared to make room for new client business even when you are already very busy. Have systems and processes in place for that.

Client satisfaction must always be our highest priority, but we cannot use that to justify not taking on other business. If you have a big client, then the most important thing you can do is take care of that client.

But when one client gets so big that it dominates your revenue stream, you have two options: Pursue the kind of growth that will attract another equally large client, and then continue that cycle; or take a closer look at your operating costs and revenue capacity and seek to rebalance your client mix so that no one client loss can put the entire business at risk.

Tim O'Brien, APR

Tim O’Brien, APR, owns O’Brien Communications, an independent corporate communications practice in Pittsburgh, and hosts the “Shaping Opinion” podcast. Email: Twitter: @OBrienPR.


Gayle Falkenthal says:

Tim, this is a valuable lesson for all independent practitioners. A colleague once relied on a single client for 85 percent of her business. It was a high visibility client in an exciting field. But seemingly overnight, technology changed the marketplace, and the "brand name" multimillion dollar business went bankrupt. It truly seemed to happen overnight. My colleague was stunned, and her business never recovered. Thankfully she reinvented herself in a brand new industry, but it's a cautionary tale.

April 3, 2018

Janine Krasicky Sadaj says:

Great words of advice, Tim. I also learned early on when I first started my firm that in addition to not allowing one client to dominate my attention, it's also important to have a healthy mix of clients in various industries. This helps to minimize risk if the one industry takes an economic hit.

April 4, 2018

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