Planet Client | CASE STUDY: How to diversify a client base

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MITCHELL Charlesworth is a chartered accountancy practice with offices in the North West of England and more than 100 years' experience. The company became aware of the need to maintain a competitive edge in an increasingly brutal market, and so launched a small-business development service two years ago.

This new service has seen profitability per customer increase and has also boosted business volumes. Business development manager Greg Harris explains how it was done.

How to diversify a client base: 1. Research the market
"Even well-established businesses like ours have to evolve. Most chartered accountants offer the same suite of services, such as tax planning and payroll services. Although we were confident ours were some of the best around, we wanted to offer something that would add value for our clients.

"The first step was consulting existing clients. Through listening to feedback, we identified a market for a trusted business development service that leveraged the chartered accountancy 'brand'. We also researched our competitors and found that there were only two other practices in our area offering a similar service."

How to diversify a client base: 2. Use what you’ve got
"Through talking to clients, we realized many small and medium enterprises (Sees) need specialist help in developing and growing their businesses, but often don't know who to trust. Small firms tend to be wary of anyone who styles himself or herself as a general business consultant. They think that they'll end up spending a lot of money for promises that aren't ultimately delivered.

"In launching our own business development service we already had the advantage of the chartered accountancy brand behind us. It represents an assurance of quality that helps small business owners overcome their qualms. This meant we could logically offer new products and services to our existing customer base, that were natural extensions of our accounting services, without our customers being surprised or concerned."

How to diversify a client base: 3. Value existing clients
"We initially thought the new service would expand our business by attracting new clients. In practice, I'd say about 75 per cent of the increase in business volume we've experienced has come from existing clients, although having the service in our portfolio does help to attract new clients. The cost of marketing to existing customers is obviously lower than recruiting new ones as well."

BUSINESS DIVERSIFICATION TOP TIPS

1. Research heavily among customers and competitors.

2.Allocate resources to launching and marketing your new product or service.
3.Make sure your business structure can cope with the increased demand you hope to generate.
4.All diversification strategies carry some risk, but there’s a need to be bold. A launch event will create a great impact, and an initial marketing push.
5.Include internal training as part of the diversification process from day one.

This case study was sourced by UK government-funded advisory body Businesslink, a free business advice and support service for small to medium sized enterprises (SMEs).