How Can a Business Manage Customer Concentration Risk?
To manage customer concentration risk, businesses can adopt several strategies:
1. Diversification: Focus on acquiring new customers to reduce dependency on a few. 2. Customer Retention: Implement strong customer retention strategies to keep existing customers. 3. Product Diversification: Expand product lines to attract a broader customer base. 4. Market Expansion: Enter new markets to spread revenue sources. 5. Contractual Agreements: Secure long-term contracts with key customers to ensure stability.