Customer Concentration

Customer Concentration measures the percentage of a company's revenue generated by its largest customers.

It can be evaluated for an individual customer or across a group of the largest customers to understand how dependent the business is on a relatively small portion of its customer base.

Higher Customer Concentration increases the potential impact of losing or downsizing a major customer. Lower concentration generally indicates a more diversified revenue base and reduces the financial impact of any single customer relationship.

Concentration should be evaluated alongside customer quality, contract duration, retention, and the strategic importance of the underlying relationships. High concentration can be more significant when major customers have short contracts or limited switching costs.

MetricFrame calculates each customer's share of total Run-Rate Revenue and provides customer-level views using both Run-Rate Revenue and TTM Revenue. It also calculates Run-Rate Revenue Distribution to show how the entire customer base is distributed across revenue bands.