Customer Concentration Risk

Percentage of revenue from top customers indicating dependency risk

FORMULA

Concentration Risk = (Revenue from Top N Customers / Total Revenue) × 100


Alternate Calculations

Top 5 Customers(Top 5 Customer Revenue / Total Revenue) × 100
Top 10 Customers(Top 10 Customer Revenue / Total Revenue) × 100

What is Customer Concentration Risk?

Customer Concentration Risk measures what percentage of revenue comes from a small number of customers, identifying over-dependence on specific accounts. High concentration creates risk if a customer churns. Typically expressed as percentage of revenue from top 5, 10, or 20 customers. Lower concentration indicates healthier revenue diversification. Common benchmarks: top 5 customers should represent less than 25-30% of revenue.

Chart

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110,000top5 · JunCustomer Concentration Risk
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Sample Data

monthtop5top10totaltop5Risktop10Risk
Jan75,000105,000450,00016.723.3
Feb82,000115,000480,00017.123.96
Mar88,000122,000510,00017.323.92
Apr95,000132,000560,0001723.6
May102,000142,000620,00016.522.9
Jun110,000152,000685,00016.122.2

Required Data Columns

Top 5 RevenueTop 10 RevenueTotal Revenue