A good business strategy is to secure repeat business or long running contracts from a good client, says Jenny Retief, CEO of the Riversands Incubation Hub.
Long-term contracts are profitable because they often cost less than sourcing new clients, says Retief.
“There is inevitably an extra investment of time needed to establish a new relationship.”
She adds: “Of course it’s important to keep adding new clients so the business is not dependent entirely on one or two contracts.”
The ideal mixture, says Retief, is a mix of long- and short-term contracts.
Retief gives the advantages of both.
– A base of long-term contracts or repeat business will provide a solid foundation with a more predictable workload and income.
– From that base it becomes possible expand, taking on additional short-term projects to prove the business’s value to a new client.
– It gives you a chance to create a good impression and to build relationships with a new clients. Most clients, and especially corporates, would want to experience products or services before committing long term contract.
In addition to repeat business, referrals are also a good way to measure if you clients are happy with you.
To increase both your referrals and repeat business Retief has this advice:
– Find out why your business is not getting repeat business and referrals.
– Track all referrals and repeat business as a key metric of the business’ quality and delivery.
– Protect the business with a sound legal contract. A longer-term project needs to be cemented.
– Be afraid to call up customers to ask about their perceptions and their experience when dealing with the business. That feedback is precious information.
– Become defensive if it isn’t all complimentary; it’s important to act on the information to build a better business. In this way, customers will gain respect for the business.