What is one of the most worrying things for any business owner? Some may say losing an employee, or being tight on cash. These and other points would be correct.

Another, and also the topic of this blog, is the loss of a major client and how to replace that lost revenue. My focus of this piece will be on driving new revenues to make up the loss versus analyzing why the business was lost in the first place.

We recently had a client of ours with multiple divisions who lost a major piece of business in one of their divisions, not catastrophic by any means, but significant enough as it amounted to 10% to 15% of the division’s revenue annually. For this particular client, we work for another division and had been made aware of the loss of this piece of business. Our client had tried a variety of ways to keep the business and met with the customer a number of times to discuss their particular choice, ultimately to no avail. Rather than giving the business to a competitor, their client had decided to bring the business in house vs outsource.

So, our client approached us and asked us if we could help to drive new revenues in the division we are active in to make up the losses plus carry on with our initial goals. We said, absolutely, we can give it a shot. We needed to understand what we needed to do to meet the lost revenue and get a plan in place. Here is what we did.

Understand the loss and break it down into manageable monthly targets

Our customer had lost revenue totalling $500,000 annually which worked out to be just under $42,000 monthly. Our average annual sale (which was really an annuity stream) was $18,000. Broken out monthly this worked out to be $1,500. So our monthly, more tangible target is to achieve $42,000 / $1,500 equaling 28 new sales. Again the benefit of our situation was that once we sold the client, the monthly / annual revenue from a client generally continued for years.

Develop a plan and set timelines

Our client knew that simply generating 28 new sales would not happen overnight and we would need some time, probably 6 to 12 months in total to get there. So we had to allocate additional time and resources to make this happen. On our current work schedule we were bringing in about 40 new clients per year, so to do another 28 would require about 70% more time. In our case, there really wasn’t a way to streamline resources or use them more effectively. It was a matter of pounding the pavement more to drive more leads and market penetration leading to more closes. Given we were already bringing on 40 new clients per year, we knew it was achievable.

Execute

Most of selling is doing. Rather than sit and further strategize and mull the loss, we needed to get to work and start selling. In addition to traditional B2B sales efforts (calling and emailing), we decided to better leverage content marketing and put an inbound lead generation strategy together to help drive new prospects to the website.

After, 4 months into the effort, I am happy to say we are halfway to our target and are on plan to achieving our sales goal.

Outside of this situation, there are also a number of things an organization can consider to replace lost revenue due to a client loss or even economic industry changes. A few suggestions include:

Identify upselling opportunities with existing customers

One way to drive new sales growth could be through upselling existing customers to increase their sales volume or offering a new product or service driving a new revenue stream. This would be considered the low-hanging fruit as customers don’t have to be acquired, rather just leveraged and more proactively sold to.

Look at new geographic markets

When looking to replace lost revenues, one idea is to look at new geographic markets to identify new business opportunities. In some cases, this could mean other cities and provinces, but in others it can mean other countries too. In these situations, you need to consider your paths to market. Do you sell direct, through a channel, both?

Identify a new revenue stream that leverages core competencies

Are you able to take your core strengths or expertise areas and build a new solution (even through a partner) that can help you find new sources of revenue in your industry? As an example, we have a client that is in a commodity industry that has gone through a major change where prices for the commodity have fallen through the floor.

In this case, through conversation with clients and prospects, our customer knew that his customers were looking to save money wherever they could. He was able to build a partnership with another firm, that leveraged his expertise and that of the partner firm to provide his clients with a 50% cost reduction in key maintenance services that had to be performed regardless of market conditions.

Ramp up content marketing and inbound lead generation efforts

One of the most cost-effective means of driving new leads is through proactive content marketing including blogging and social media management. We have found that developing and executing on a content marketing program drives tangible results and keeps fresh leads coming in. For one client, our content marketing and inbound lead generation efforts have yielded 12 to 15 leads per month. For another firm, the efforts have yielded 40 to 50 leads per month.

If you are in need of assistance from a sales and marketing perspective, feel free to contact me. I would be happy to see if we can help. Alternatively, if you are simply looking for a source of excellent sales and marketing information, sign up for our newsletter or follow us on Twitter.