Customer Concentration Risk

How dependent the business is on individual customers — measured against industry-agnostic risk thresholds.

Customer band

Medium

21–100 customers

Top customer

20%

20% — limit 15%

Top 3 combined

36%

36% — within limit

HHI score

750

Unconcentrated

Medium band thresholds

Industry-agnostic benchmarks for a business with 21–100 customers.

40 active customers

Metric	Threshold	Actual	Status
Single customer max	≤ 15%	20%	Exceeded
Top 3 combined max	≤ 40%	36%	Within limit
Top 5 combined max	≤ 55%	49%	Within limit
HHI	< 1,500	750	Unconcentrated

Revenue by Customer

Exceeds thresholdApproaching limitWithin rangeSingle client limitCumulative %

Customers ranked by revenue. Bars coloured red when they exceed the single-customer threshold for your band (15%).

Path to a healthier distribution

Among Medium businesses, it is common for any single customer to represent no more than 15% of total revenue. DIISR - Small Business Services currently represents 20%.

Growing other clients

Clients like ABC Furniture, Ridgeway University, Petrie McLoud Watson & Associates and 36 more currently contribute $66,878 combined. For DIISR - Small Business Services's share to reach the 15% benchmark, those other clients would need to contribute $94,611 — an increase of $27,733.

Total revenue would reach $111,307, with DIISR - Small Business Services contributing $16,696 as now.

Businesses commonly approach this by growing revenue from other clients over time — strategies for doing so are outlined in the Growth Hub below.

Growth Hub — Client Diversification

Businesses looking to broaden their client base commonly explore these channels.

Google Local Services Ads

Appear at the top of Google when local customers search for your service. Pay per verified lead, not per click — effective for all trade and service businesses.

Avg. 4–8× return on spend for local services

Meta Local Targeting

Reach prospective customers in your service area before they start searching. Effective for project-based work, seasonal campaigns, and building brand recognition.

Avg. $35–80 cost per qualified lead

Past Customer Follow-up

Structured outreach to past clients for repeat work and referrals. The warmest leads available — referrals close at 3× the rate of cold leads.

Lowest cost per acquisition of any channel

Trade Partnership Referrals

Formalise referral relationships with complementary trades — e.g. plumber ↔ electrician ↔ builder. Structured agreements with mutual referral tracking.

Zero ad spend; qualified warm leads

Olytics can manage these campaigns for you — strategy, execution, and reporting included. You approve spend.

Metric definitions

Single Customer Max %

A reference level for the maximum revenue share commonly seen from any single customer in well-diversified businesses at this scale. When concentration exceeds this level, a single client departure could materially affect total revenue.

Top 3 / Top 5 Max %

A reference level for the combined revenue share of the 3 or 5 largest customers. Indicates whether concentration is spread across a few large clients or more evenly distributed.

HHI (Herfindahl-Hirschman Index)

Sum of squared revenue shares (each as a whole number, e.g. 74² + 15² + 11² = 5,702). Below 1,500 is unconcentrated. Above 2,500 is highly concentrated. Used by regulators and lenders globally.

Data covers the last 12 months from your connected Xero account. Thresholds are industry-agnostic SME concentration risk benchmarks. This is observational analysis — not financial advice.