When companies sell services, this is one of the biggest questions. They either serve bigger clients or they go with smaller clients. There are both advantages and disadvantages to both approaches. The general thought is that instead of dealing with multiple smaller clients, it can be better to get one bigger client so that the revenue can be bigger.
However, there are other advantages to having smaller clients instead of larger clients. In this article, we are going to see this in detail.
Large clients for the business
From the looks of it, it can be a great solution to get larger clients because larger clients are good in terms of revenue. However, the challenge with larger clients is that we must go through many legal formalities and paperwork. I remember working for one of the biggest clients in my career and it was for a secure bank. To do that, I had to sign a lot of NDA and other papers to make sure that I didn't do anything with the data I was exposed to. Only after signing these papers, I was allowed to work on that project.
This is one of the formalities we have to follow with larger clients. They also hold us accountable and we will not be able to do things that are not in the contract with them. Sometimes it is a good thing to get a large client. We might be working with 100 small clients and working with all 100 can be equivalent to just one large client which can give the same amount of revenue. But revenue alone is not the biggest thing here. There are so many other factors we have to take into consideration.
Small clients
Small clients are easy to handle. One biggest advantage with small clients is that we don't have to do big paper works with them. The contracts with them are also very easy and we can follow a standard contracting procedure. Sometimes if we don't provide services up to the mark, we don't have to worry about the revenue or worry about losing the client. Though it will affect the company's reputation, there will not be any big impact.
The volume of the clients will be high even though the data in that client will be small. Ultimately if the SaaS is based on the volume of data, then it will not matter if we have a small client or a big client because based on the service we provide, the revenue is going to happen.
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