We cannot easily dilute our largest customer who represents thirty percent of our revenue before we sell. How do we restructure our account management team and operational delivery so a buyer does not see this concentration as an existential risk?

Question

Tyler Smith · Accepted Answer

A single customer representing thirty percent of your revenue is a major value killer, but you do not have to accept a massive haircut on your multiple. You cannot easily dilute this concentration overnight, but you can systematically de-risk the relationship in the eyes of a buyer.

Buyers fear that when you exit, the relationship will walk out the door with you. To neutralize this fear, use your EOS Accountability Chart to institutionalize the account. You must immediately step out of the primary relationship role. Transition the day-to-day management of this client to an account manager who GWCs the seat.

Next, schedule a Thinking Time session to map out the operational touchpoints. Ask yourself: How might we deeply integrate our delivery systems with this client's daily operations so that replacing us would cause them major operational disruption?

Implement automated reporting and shared communication channels that embed your business into their workflow. Bring this initiative to your weekly Level 10 Meeting and set a firm-wide Rock to complete this system integration.

When you enter diligence, show the buyer that you have not spoken to the client's executive team in six months, yet the account is growing and highly satisfied. By proving that the client is bound to your operational systems and your team, rather than your personal presence, you disarm the buyer's concentration discount and defend your enterprise value.