Reader Nic Justice wrote with this feedback on my previous email:
Unhealthy amounts of repeating business seems counterintuitive to me. Repeat business seems like a good thing from where I am sitting.
Yes, I’ll admit at first blush my statement about “unhealthy amounts of repeat business” sounds crazy. After all, isn’t that the dream? To have a handful of good clients with deep pockets, steadily awarding you projects?
No, that’s not the dream. The dream is to be great. To develop your Genius/expertise for which your firm is highly sought-after. To create a reputation for being the absolute best at what (and why) you do it.
To create the future. Your future.
(And don’t even get me started talking about the myth of retainers. Ugh!)
To help, let’s take a cursory glance at the pros and cons of repeat business:
Repeat business: pros
- Steady cash
Repeat business: cons
- Reactionary: you are simply reacting to the future, not creating it
- Stale portfolio: your reputation shrinks instead of expands
- Overly service-oriented offering: you devolve into an order-taker instead of a leader
- Focus on efficiency over innovation: you stop developing deep expertise
- Exposure: when clients leave, you don’t know how to replace them
Clearly, that one big pro doesn’t offset those many cons.
So what is “healthy?” Looking at annual revenue, my observation is that strong, dynamic creative firms can achieve a mix of about 40% new (outbound) business, 40% repeat business, and 20% referral (inbound) business.
Your mileage may vary.