Blog · Board and management reporting
The complete customer concentration calculation on ten customers small enough to check by hand: the revenue per customer, the sorted shares, top-one, top-three and top-five share, the count to half, the Herfindahl index as the sum of squared shares, the same measures last year for the trend, the per-rep split that shows a rep whose count to half is one, and the identity, so a reader can reproduce every figure and then run it on their own export.
Concentration is three measures on a sorted list, and on ten customers all three can be computed by hand in a minute. This page works them, this year against last, and splits by rep to show what the company table hides.
| Rank | Customer | Revenue | Share | Cumulative | Rep |
|---|---|---|---|---|---|
| 1 | F | $450,000 | 23.0% | 23.0% | R-1 |
| 2 | A | $310,000 | 15.9% | 38.9% | R-2 |
| 3 | E | $270,000 | 13.8% | 52.7% | R-1 |
| 4 | I | $210,000 | 10.7% | 63.4% | R-2 |
| 5 | G | $200,000 | 10.2% | 73.7% | R-3 |
| 6 | C | $160,000 | 8.2% | 81.8% | R-3 |
| 7 | B | $140,000 | 7.2% | 89.0% | R-2 |
| 8 | J | $95,000 | 4.9% | 93.9% | R-3 |
| 9 | D | $90,000 | 4.6% | 98.5% | R-2 |
| 10 | H | $30,000 | 1.5% | 100% | R-3 |
| Total | $1,955,000 | 100% |
Top-one share = 450,000 ÷ 1,955,000 = 23.0% Top-three share = (450 + 310 + 270) ÷ 1,955 = 52.7% Top-five share = 73.7% Count to half = 3 (cumulative first reaches 50% at E) Herfindahl = 0.230² + 0.159² + 0.138² + 0.107² + 0.102² + 0.082² + 0.072² + 0.049² + 0.046² + 0.015² = 0.0529 + 0.0253 + 0.0190 + 0.0114 + 0.0104 + 0.0067 + 0.0052 + 0.0024 + 0.0021 + 0.0002 = 0.136
| Measure | Last year | This year |
|---|---|---|
| Top-one | 19.0% | 23.0% |
| Top-three | 44.1% | 52.7% |
| Count to half | 4 | 3 |
| Herfindahl | 0.118 | 0.136 |
| Customers | 10 | 10 |
Every measure rose with the same ten customers. F and E grew; the rest did not. That is the finding, before any level is judged.
| Rep | Customers | Revenue | Top-one share of rep's book | Count to half |
|---|---|---|---|---|
| R-1 | F, E | $720,000 | 62.5% | 1 |
| R-2 | A, I, B, D | $750,000 | 41.3% | 2 |
| R-3 | G, C, J, H | $485,000 | 41.2% | 2 |
Rep R-1's book is two customers and the larger is nearly two thirds of it. The company table said 23 percent.
Σ customers = $1,955,000 = ledger Σ reps = 720 + 750 + 485 = $1,955,000
Level read first. "Is 52.7 high?" The rise from 44.1 is the finding.
Duplicate customer. If A were also recorded as A2 with $100,000 split off, top-one would read 21 percent and concentration would look lower than it is; the identity would catch a total above the ledger.
Company view only. R-1's one relationship invisible.
Index read alone. 0.136 means little; the rise from 0.118 does.
The same sorted list, per company, per segment and per rep, trended, with the roll-up checked. Covirage runs it on the ledger every quarter. The customer concentration guide covers the measures, and the concentration reading guide covers reading them at scale.
Because each is read by someone different. Top-n share is what a board reads; the index is what trends cleanly; count to half is what a sales leader acts on, because it is a number of relationships. On ten customers all three take a minute.
The sum of squared shares. Ten equal customers give 0.10; one customer with everything gives 1.00. It is sensitive to the largest, which is why it trends well. The level is hard to read alone; the direction is not.
Because the company's largest customer at 22 percent is one rep's at 71 percent. That rep's number is one relationship, and the company-level table cannot show it.