Archived research. The era-1 framework is part of the Runchey Research archive (methodology era 1) and is no longer actively updated. Everything remains published at its original URL. Browse the archive
Customer Concentration
Is revenue dependent on a small number of customers?
Assessment Spectrum
Assessment Labels
Every analysis assigns one of 4 categorical labels to this signal. Labels represent a spectrum from best to worst assessment.
No customer represents more than 10% of revenue. Loss of any single customer wouldn't materially impact the business.
Some customer concentration exists but is manageable. Top customers represent 10-25% of revenue individually.
Significant dependency on a small number of customers. Top customers represent 25-50% of revenue. Loss would materially impair results.
Revenue is dominated by one or few customers representing >50%. Business viability depends on maintaining these relationships.
What This Signal Captures
Emerges From
This derived signal emerges from analysis synthesis within these lenses when company-specific patterns warrant the additional categorization.
How to Interpret
Customer concentration creates dependency risk where the loss of key relationships materially impacts results. In government-facing businesses, state agencies often function as monopsonist buyers with outsized influence.