E-commerce · Economics

Customer concentration economics

Published · Reviewed by The Diligence Standard Team · Updated

Customer concentration should be measured by revenue, contribution and dependence on common acquisition sources.

Records to reconcile

  • Customer-level sales
  • Customer contribution
  • Source and contract data

Warning signal

Apparently diversified customers originate from one partner, audience or marketplace.

Transaction impact

Loss of one source can affect many customers simultaneously.

Response

Measure direct and correlated concentration and adjust transition protection.