Formula
Revenue from top N customers / Total revenue x 100
How to measure
Rank customers by revenue contribution and sum the top 5 or 10 customers' revenue, then divide by total revenue.
Why track it
High concentration signals real business risk, since losing just one or two large accounts could meaningfully damage the company's revenue.
Example
A company discovers its top 3 customers make up 40% of total revenue, prompting a push to diversify its customer base.