Gettler: Bank on breadth so you can sleep easy

Make sure your business is not dependent on one customer

AdventOne knows all about big customers. An IBM reseller that deals in enterprise software, AdventOne's customer base includes corporations, government agencies and small businesses. As company chairman Robert Bassat puts it, it's the mix that's important.

"We deal with companies that have 10 people and we deal with companies that have several thousand," Basset says.

For AdventOne, the idea of having any customer accounting for 25 percent of turnover is just wrong, no matter how big or lucrative that customer might be.

"We have a lot of big customers and we're very delighted to have a lot of big customers," Bassat says. "What you don't want to be is dependent on one.

"If we had a customer who represented 80 percent of our business and we lost them, we'd lose 80 percent of our business.

"I don't think we ever got more than 10 percent from any one of our customers."

As Bassat sees it, it's just a matter of common sense. He says it's like investing - you wouldn't want to want to have all your money in one sector or company.

"The reality is that's true of anything in life," he says "You don't want to be dependent on a single source of revenue.
"You wouldn't want to have 90 percent of your shares in BHP and have the mining tax announced."

The company's strategy is geared around creating a customer base that's diverse. For AdventOne, big customers are welcomed but other parts of the business are just as important, perhaps even more so.

Bassat says: "We don't sell a single product, we sell multiple products. We are constantly monitoring our business and asking what we need to do.

"And you have to be diversified in your customer set. If a big customer walks in tomorrow and wants to represent 30 percent of our business, we would do something about trying to grow the other part of the business but we would not knock back the customer. 

"We have the business running today, if a new customer came in, we would love them to death and we would also try to grow other parts of our business.

We would focus on growing our other customers."

Every customer provides an opportunity for growth, he says. But that's true of all customers, large and small.

"Any customer gives you the ability to grow other customers, be it through references, through being able to provide you with a revenue stream to grow the business. That's true of a large customer or a combination of small customers."

He says AdventOne was headed in this direction right from the start.

"In the first few months we had never had a single big customer. If anything, we had lots of small customers in the early days. It took a while before big customers felt they could do business with [us]. We started with several small customers and a small amount of business in big customers and that grew, but then the business was growing too.

"Whether that was through luck or good management, we have never had that problem."

The key to all this is developing very strong relationships with customers, getting to know what they need and servicing them. This ensures that relationships with big customers are kept on an even keel.

Indeed, relationships represent the most critical part of the AdventOne business strategy. "Some companies work on transactional volumes. We work on relationships," he says.

"We are very focused on the relationship rather than the transaction. It comes as a cost to the business but it pays in the long term," he says.

AdventOne account managers and support staff are there to work with the big customers. The relationships with big customers, who have more complex needs and systems, are very different. Account managers and their support teams need to be right across that.

"You have got more people to deal with in a large customer," he says. "You have to understand what people's roles are and make sure you are talking to the right person in a particular role whereas with a small customer, you are talking to one or two people."

"Our support staff generates quite bit of business too," he says. "They see opportunities to improve operational aspects of the customer's infrastructure and the suggestion goes up the tree and comes back in the form of increased business for us.

"It's about under-promising and over-delivering rather than the other way around. If you promise 10, you deliver 11 so you get a satisfied customer. You don't promise 10 and deliver eight. It's a cultural attitude in the company. We take our customer commitment very seriously.

"It doesn't matter if they are big, small or government."