Just had two of my biggest clients cut down on their requirements - need advice on next steps

We're in the software development space, and staff augmentation for product development/software development is a core part of our offerings.


I spent a significant part of Q4 on two things -


  • 2.5x the team of an existing client resulting in ~2.5x to 3x the revenue (cilent 1)
  • closed a new client where we mapped out a series of projects to start on (some were fixed cost vs another being a monthly retainer) (client 2)


The MRR for this quarter/rest of the year from these two client was looking really good, until client 1 tells me today suddenly (been just a month since we expanded their team), that they cannot continue since their biggest client is churning, and being a small company, they can't really pay us due to cash flow issue. I cannot really enforce our contract here where we have stipulated a minimum of 90 days lock in, bcoz it is not going to help either of us. They can't pay us and if we force them to pay, we lose them forever coz of the experience (we have been working with them for almost a year now - good client overall).


Client 2 - we have a new project (fixed cost) starting soon, but he came to me yest and mentioned that they've gone through the process of acquisition (we knew they were getting acquired over the last 3 months), and the new owners are not too comfortable with them running too many projects at once. They'd like to slow things down, and he has to respect this decision. Our monthly retainer from them has disappeared overnight due to this decision. Same as above, we have a lock-in of 90 days with them, but not worth fighting over (we're already 70 days in) as we have this other project and a potential new project running in parallel.


However, given the above - I have a massive chunk of MRR/ARR missing from my revenue pipeline just like that.


It is quite a disappointing outcome given the amount of work that went into getting these two accounts in place. Have you been in a scenario like this? What would you suggest I do here, and what's the best way to ensure that something like this doesn't happen again?


Overall, both clients have very valid reasons, and I realize that this isn't something that I could have controlled or foreseen, but it'd be nice to know if there's a way to avoid something like this happening in the future.

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Sunbunny31
Politicker
3
Sr Sales Executive 🐰
There's no way to avoid an unforseeable, uncontrollable situation.   Unless you had some kind of knowledge that would be providing you with a reason for concern, this is out of your hands.   So what you seem to be asking is: was there any way for you to have seen this coming?  Maybe.

You might have had reason to suspect something might happen with customer 1 if you knew who their big customer was and were up on the news regarding any disruption, but otherwise, no.

You likewise might have had an idea that an acquisition would be disruptive, but your project is underway, and unless you had reason to suspect the future parent might pull the plug, there's no telling how you avoid this.   You're in sales; you're pursuing and closing this business, and doing your best to stay ahead of disruption.

In short, you're going to spend time on customers and getting them set up, and things happen.  The way to soften the blows are to have a diversified pipeline so that one/two issues don't kill you when they happen.   Nothing you probably don't already know.
LordBusiness
Politicker
1
Chief Revenue Officer
The only way to avoid what you are going throwing is to have 3-5x your targets and goals working at ANYTIME. Most folks settle for what they think will hit their goals. The reality of it that shit happens on 60% of deals, and if you don’t have coverage above that, chances are you’ll miss. (You may get lucky from time to time, but long term- no bueno)
CuriousFox
WR Officer
1
🦊
It sucks man, I know. That's why it's important to not put all of your eggs in one basket. Ya feel me?
Blackwargreymon
Politicker
1
MDR
You might have had reason to suspect something might happen with customer 1 if you knew who their big customer was and were up on the news regarding any disruption, but otherwise, no.
Clashingsoulsspell
Politicker
1
ISR
It sucks man, I know. That's why it's important to not put all of your eggs in one basket. Ya feel me?
Diablo
Politicker
0
Sr. AE
Very unfortunate, few things are inevitable. Keep nurtuting your client, I am sure even if they are loose their biggest one, they will get other as well. Keep patience but also don't be dependent on them
MR.StretchISR
Politicker
0
ISR
There's no way to avoid an unforseeable, uncontrollable situation. Unless you had some kind of knowledge that would be providing you with a reason for concern, this is out of your hands. So what you seem to be asking is: was there any way for you to have seen this coming? Maybe.
Mr.Floaty
Politicker
0
BDR
Frankly, no one cares about our cute messaging, no matter what time of year.
Cyberjarre
Politicker
0
BDR
Frankly, no one cares about our cute messaging, no matter what time of year. Be relevant, be brief, and make your ask clear.
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