Money 2.0 Conference - Frequently Asked Questions(FAQs)

As Money 2.0 Conference is an in-person event, we are rising up to the COVID-19 challenge and are taking a host of steps to ensure adherence to safety and health regulations set forth by local and state authorities. Know More

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The Power Of Diversifying Your Client Base

To stay ahead of the competition in today's business world, you must constantly strategize, which includes diversifying your client base. This is especially important for the key stakeholders in the finance industry. Relying solely on one group of clients can quickly expose your business book to risk. If your single client group suddenly withdraws, your profit will most likely fluctuate. Similarly, market changes may impact your margins, pricing, and bottom line.

For these reasons, experts from Money 2.0 Conference, a global finance event, suggest agents must have a solid client diversification strategy in place. Client diversification entails developing and implementing a client growth strategy, which includes broadening your client base.

The adage "don't put all of your eggs in one basket" may be outdated today, but the wisdom behind it remains. It's analogous to putting all of a company's sales expectations and potential into a large client. When a company depends on a single large client for most of its revenue, its fate is inextricably linked to the client. Relying on a single large client gives the organization little control over its future and no ability to plan defensive business moves. If the client suffers a slowdown, disaster, or bankruptcy, the business that relied on the client will suffer as well, without the opportunity to take corrective actions.

Where's The Money?

It is not uncommon for a company to offer a discount to a large customer to secure the client's business. While giving discounts to existing customers or prospects can increase sales, a value to just one large client can reduce profits.

When a company relies heavily on a single customer, discounts aren't the only way to lose money and reduce revenues. As discussed at several accounting and finance conferences, the company may also suffer when a client is slow to pay invoices or when that company's demands are reduced. The company may already have spent money on raw materials, training, and labor. However, there is no guarantee that the discounted order will be fulfilled - or that it will be paid if it is fulfilled.

Diversification Of Customer Bases: Not Just For Investment Accounts

It's unlikely that any investor would consider investing all of their money in a single company's stock. Instead, most investors diversify their holdings and invest in various companies across multiple industries to better hedge against losses. A company can evaluate its customer base in the same way. Management may want to ensure that no single customer accounts for more than 25% of the company's annual revenue. As a result, a hedge is formed against a single client's business slowdown, late payment, or total loss while balancing customers who pay full price and those who receive discounts.

Diversification Of Client Base Strategies
Expand Reach

Agents are agents because they excel at their jobs. They are skilled at acquiring clients and expanding their businesses. Conversely, agents can focus on a specific product type and put all their industry eggs in one basket.

Models Of Evaluation

A mode assessment is integral to finding new and diverse clients. A mode assessment is a process of determining the best mode of shipment for a given client.

Stay Informed

Keeping up to date on the state of the supply chain in the United States will aid agents in their efforts to maintain, grow, and diversify their book of business.

Create a list of reliable industry information sources. Then, develop a daily or weekly routine for staying current on significant trends or disruptions that may affect your current and future clients. Explore the relevance of diversification at the upcoming finance leaders' summit - the Money 2.0 Conference.

10/26/2022 - 08:33

Lakshay Mohanpuriya

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Lakshay Mohanpuriya
Author Name
Lakshay
Author Bio

Lakshay has always been drawn to the world of finance. His fascination for it led him to join the organizing committee for the Money 2.0 Conference - an annual conference exploring FinTech trends, showing how to best manage one's money, identifying scams/fraud and fake investments spam, as well as highlighting ways to stay safe.