Investor's wiki

Client Base

Client Base

What Is a Client Base?

A client base is a company's primary source of business and revenue. A client base comprises of the current customers paying for the products, or services. A client base can be recognized or defined in numerous ways relying upon the type of industry. Existing clients may likewise be quick to be sold new offerings.

Understanding a Client Base

Tracking down new customers and keeping up with the existing client base is a major initiative for any business since, without clients, the business can't earn revenue. Strategies companies use to increase this base incorporate networking, word-of-mouth marketing, and references, fostering a strength or area of mastery, keeping in contact with existing clients, showing appreciation for clients, and reliably meeting or surpassing expectations.

Businesses that basically offer professional types of assistance, for example, financial planning will generally utilize the term "client base," while businesses that principally give products will quite often utilize the term "customers." For instance, a financial organizer's client base would comprise of the relative multitude of individuals who have joined to have their money managed. A CPA's client base would incorporate individuals in general and businesses that pay to have their tax returns prepared.

How Businesses Approach Their Client Base

An existing client base is the means of generating the majority of revenue for a company and subsequently, attracts a lot of consideration from management. A business that spends too much time prospecting for new clients while overlooking its existing clients runs the risk of losing its client base.

It's definitely more costly to get another client than it is to keep a current client blissful. It's likewise undeniably more profitable to keep up with and grow a company's client base. In a study from the Harvard Business Review, counseling firm Bain and Company found that "Expanding customer retention rates by 5% increases profits by 25% to 95%."

A client base can likewise allude to a targeted prospect list that a company wishes to attract. As a company explores, creates, and plans to put up a product or service for sale to the public, attracting the consideration of a potential client base is of paramount significance. The new product needs to reply, help, or resolve a pain point or need for the target client base.

Companies utilize their existing client base as a model to determine the possible progress of another product. For instance, utilizing the data from the company's client base demographics like age, location, income, or orientation, the company can determine the level of progress of existing products inside every demographic. From that point, companies can target new demographics that have comparable cosmetics while venturing into new markets or offering another product. Likewise, an existing client base can act as a center group, in which the company can receive important feedback with respect to another product before offering it to the market.

The capability of progress for a service or product is often based on the size and the cosmetics of the expected client base that the company is prospecting or targeting. Luxury things, for instance, are for the most part targeted at a client base with the financial resources and readiness to pay a premium for an excellent product or service. A company offering a top of the line product, like a watch or a limited release vehicle, may target its marketing initiatives to arrive at prospective clients that have historical spending designs or are probably going to spend on those products.

Advertising and marketing to grow a client base could incorporate TV and radio advertising as well as social media marketing efforts. An auto company could engage in film advertising, for instance, targeting fans of race-vehicle motion pictures assuming that that client base is probably going to buy a games vehicle.

Illustration of a Client Base

Bank of America Corporation (NYSE: BAC) is one of the biggest banks in the U.S. also, services different types of clients and demographics. For a company of such size, one could think that they don't have a targeted client base. Nonetheless, the bank has a client base that incorporates the two consumers and businesses.

As per the bank's website, its client base incorporates:

  • Consumers or retail clients
  • Small businesses that need loans and business credit cards
  • Wealth Management through Merrill Wealth Management
  • Corporate or commercial banking, which is for bigger companies where they give investment and cash management services.

Every one of the above types of clients make up the client base for the bank. Every division could have a separate strategy for keeping up with their existing client base and targeting new ones based on their current clients' ways of behaving, financial situation, goals, and necessities.


  • Creating, holding, and growing its client base is a key business goal.
  • A client base can be generalized or targeted relying upon the type of business or product.
  • A client base is a firm's core group of customers who drive revenues and profits.