Free tool
Customer Concentration Checker
How much of your revenue rests on a few customers? Enter your revenue and your largest customers to see the largest customer's share and the top five's against your thresholds, the effective number of customers, what losing the largest would cost and how much growth elsewhere would bring it back under. No sign-up, and names and figures stay in your browser.
- Largest customer: Customer 1
- Above your 20% threshold
- Top five customers
- Within your 50% threshold
- Effective number of customers
- Your revenue is as concentrated as if it came from this many equal customers
| Customer | Revenue | Share | Running total |
|---|---|---|---|
| 1Customer 1 | €1,840,000 | 23.0% | 23.0% |
| 2Customer 2 | €620,000 | 7.8% | 30.8% |
| 3Customer 3 | €480,000 | 6.0% | 36.8% |
| 4Customer 4 | €400,000 | 5.0% | 41.8% |
| 5Customer 5 | €330,000 | 4.1% | 45.9% |
| 6Customer 6 | €280,000 | 3.5% | 49.4% |
| 7Customer 7 | €240,000 | 3.0% | 52.4% |
| 8Customer 8 | €210,000 | 2.6% | 55.0% |
| 9Customer 9 | €180,000 | 2.3% | 57.3% |
| 10Customer 10 | €160,000 | 2.0% | 59.3% |
| Everyone else | €3,260,000 | 40.8% | 100.0% |
Links carry the figures and thresholds, never the names.
How the checker works
- Shares are each customer's revenue over the last 12 months divided by revenue from all customers over the same months. Customers are ranked largest first, whatever order you enter them in.
- Thresholds are yours to set. The examples, 20% for the largest customer and 50% for the top five, are not benchmarks.
- Effective number of customers is one divided by the sum of the squared shares: the inverse of the Herfindahl-Hirschman index. Customers you leave out are treated as very small, so the true figure can be slightly lower.
- Growth needed is the extra revenue from other customers that would bring the largest customer under your threshold, with its own revenue unchanged.
In the example, an illustrative company with €8.00m of revenue has a largest customer at 23%, past its 20% threshold. Losing that customer would take revenue to €6.16m. Bringing it under 20% at today's level would take €1.20m more from everyone else, almost a fifth more than they bring in now.
A threshold only helps if someone checks it. Stratavor connects read-only to Xero, QuickBooks Online, Sage, NetSuite, Deltek Vantagepoint and HubSpot, measures concentration from the ledger every month, and flags any customer that crosses the threshold your board set in the monthly commentary, alongside the customers who are slipping and the cash and risk measures. The Power BI add-on carries the same figures into Power BI.
Microsoft and Power BI are trademarks of the Microsoft group of companies.
Frequently asked questions
- What is customer concentration?
- How much of your revenue depends on a few customers. It is usually measured as the largest customer's share of revenue over the last 12 months, and the share of the top five or top ten.
- How concentrated is too concentrated?
- Private companies have no rule: the board sets its own thresholds. Listed groups reporting under IFRS 8 must disclose when a single customer provides 10% or more of revenue. The example register in our risk register guide uses 20% for the largest customer. What matters most is that the threshold is written down, measured every month and has an owner.
- What is the effective number of customers?
- One figure for how widely revenue is spread. Square each customer's share of revenue, add the squares and take the reciprocal: this is the inverse of the Herfindahl-Hirschman index. Ten equal customers give ten. One customer with half the revenue and many small ones give about four. The checker uses the customers you enter and treats the rest as very small, so the true figure can be slightly lower.
- What should we do when a customer passes the threshold?
- Put it on the risk register with an owner, a measure and a next step with a date, and review it every month. Then work on both sides: protect the relationship through service, terms and contract length, and grow revenue elsewhere. The checker shows how much more revenue from other customers would bring the largest back under your threshold.
- Are customer names or figures stored?
- No. Everything stays in your browser and nothing is sent to Stratavor. A copied link carries the figures and thresholds but never the names. With analytics consent, we count that the checker was used, without your figures.
- How does Stratavor help?
- Stratavor connects read-only to Xero, QuickBooks Online, Sage, NetSuite, Deltek Vantagepoint and HubSpot, measures concentration from the ledger every month, and flags any customer that crosses the threshold your board set in the monthly commentary, alongside the customers who are slipping and the cash and risk measures. The Power BI add-on carries the same figures into Power BI.
One email a month. Worth opening.
Decoded films on real companies' results, short films on how businesses make and lose money, and guides on customers, competitors, risk, cash and the board pack. No sales emails.
By subscribing you agree to receive the monthly Stratavor digest. Unsubscribe at any time from any email. Privacy policy.