A Regional IT Firm Lost Its Largest Client and Redirected Staff Time to Local Nonprofits
A five-employee managed services provider in the Midwest lost a client that represented nearly 40 percent of its annual revenue in early 2022. The contract ended after a merger left the customer’s IT decisions in the hands of a parent company that used a national vendor. The firm had relied on a narrow base of mid-sized accounts, most acquired through cold outreach and paid search ads.
The owner reviewed the pipeline in the days following the loss. Three proposals were pending, but none were expected to close before the second quarter. Two staff members had availability that would normally be filled by the lost client’s help desk work. The firm had enough cash to cover payroll for roughly four months without new revenue.
A Temporary Assignment That Changed Referral Patterns
The owner asked one of the available technicians to volunteer eight hours per week with a local food bank that had previously requested pro bono support for its donation tracking software.
The technician spent March and April:
- Troubleshooting database errors
- Training staff on a donor management platform
A board member at the food bank mentioned the work to a colleague who owned a regional logistics company.
That logistics company reached out in May. The initial conversation did not include a request for proposal. The operations manager said the referral came with enough trust that the firm was invited to audit the company’s network without a competitive bid.
The contract, signed in June, was worth approximately 60 percent of the revenue lost four months earlier.
How Patterns Shifted Across the Client Base
The firm began allocating staff volunteer time as a standard practice.
- Two employees joined the board of a workforce development nonprofit.
- Another spent time each month helping a community health clinic migrate its patient portal to a more secure platform.
The owner tracked where new inquiries originated and noted that five of the next eight clients in 2022 and 2023 came through introductions tied to nonprofit relationships.
According to research from the U.S. Small Business Administration, small businesses that build trust through sustained community engagement often see improved customer retention and referral rates.
Impact on client metrics:
- Client turnover, which had averaged 18 percent annually, dropped to 7 percent by the end of 2023.
- Average deal size increased from about $32,000 to $47,000 as referred clients tended to request broader service packages.
One logistics client later expanded its contract to include cybersecurity monitoring after the firm identified a vulnerability during a routine review. The client’s CFO said the recommendation, which was not part of the original scope, reinforced the firm’s reliability.
That trust had been built in part because the introduction came from someone the CFO knew personally.
The Role of Scheduling and Documentation Systems
The firm used scheduling software to block volunteer hours in the same system that managed client work. This prevented double-booking and ensured nonprofit commitments were treated with the same operational discipline as paid projects.
Staff logged volunteer activities in a shared project tracker, which allowed the owner to:
- Monitor total volunteer hours
- Identify which relationships generated business inquiries
The Internal Revenue Service provides guidelines for documenting volunteer work, which can be relevant for certain business deductions. The firm did not treat volunteer time as a marketing expense but tracked it alongside other operational data to assess resource allocation.
Financial Recovery and Sustained Practice
By the end of 2023, the firm’s revenue had grown 22 percent beyond its pre-loss baseline. The owner attributed much of that growth to deals that originated through nonprofit networks.
The firm continued to set aside roughly 10 percent of staff capacity for community work, a level that did not require hiring additional employees.
The initial crisis forced a reallocation of idle time that the firm later formalized into its operating model. The SCORE Association, which mentors small businesses, notes that diversified lead sources reduce vulnerability to single-client dependence, a risk the firm had learned to manage only after experiencing significant loss.
The volunteer work became a repeatable channel, though the firm never framed it publicly as a marketing tactic.
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