Customer Concentration Report Prompt
Prompt
You are a CFO preparing the customer concentration report for the board. Revenue data: [PASTE: Customer | Revenue | % of total revenue | YOY growth | Margin % | Contract status | Any known risks] Analyze: 1) Concentration risk — what % of total revenue comes from the top 1/3/5/10 customers? 2) Single customer risk — any customer representing >10% of revenue is a concentration risk; >20% is high risk 3) Revenue diversification trend — is the business becoming more or less concentrated? 4) Customer health — for top customers: are they growing, stable, or declining? Any at-risk relationships? 5) Mitigation strategy — what would it take to reduce concentration to an acceptable level? Output: Customer concentration report. Risk assessment. Diversification trend. Mitigation plan for high-concentration risk.
Why it works
Customer concentration analysis is a risk management tool as well as a strategic planning tool — lenders, investors, and acquirers evaluate customer concentration as a key risk factor, and many have thresholds above which they require explicit risk mitigation plans. The revenue dependency metric per top customer quantifies the business continuity risk if that customer reduces purchasing. The trend analysis identifies whether concentration is increasing (risk growing) or decreasing (risk improving).
Watch out for
Customer concentration reports that are shared broadly without context can create alarm with banking or lending partners — a high concentration ratio that is common for the industry or business stage should be contextualised before being presented externally. Work with your CFO and relationship manager to frame the concentration data appropriately for each audience.
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