ARC Grid: Introduction

The fundamentals of the framework—how it works, why it matters, and what it reveals about revenue structure.

Every business carries an invisible map of its revenue. Look closely at the sales data, and patterns emerge.

Sometimes a handful of customers carry the weight of the business. Sometimes revenue is spread thin but wide. In rare cases, the distribution is evenly balanced.

This distribution is not random. It defines the power structure of your business:

  • Who holds leverage in negotiations.
  • Where true profitability lies.
  • How resilient you are to shocks.
  • Whether your business can scale or is already at risk.

And here is the truth: every business, regardless of size or sector, sits somewhere on this map.

That's why we created the ARC Grid, a lens to map Account–Revenue Concentration and decode what to do next.

The Scales of the ARC Grid

The ARC Grid is built on two dimensions that exist in every business:

1. Customer Base Distribution (Horizontal Axis)

  • Narrow: Revenue depends on a small number of accounts. Example: A B2B tech company with only 12 enterprise clients.
  • Broad: Revenue is spread across a wide base. Example: An FMCG brand serving 50,000 retail buyers.

Why it matters: A narrow base creates focus but high risk. A broad base creates stability but low leverage.

2. Revenue Contribution (Vertical Axis)

  • Even: Customers contribute relatively equally to revenue. Example: A consulting firm where 100 clients each provide ~1% of revenue.
  • Concentrated: A small subset contributes disproportionately. Example: A SaaS company where 3 accounts drive 55% of ARR.

Why it matters: Even contribution provides balance but may limit growth. Concentration fuels growth engines but creates dependencies.

These two scales are not good or bad in isolation. Each carries trade-offs: focus vs spread, stability vs vulnerability.

It's their combination that defines which quadrant your business falls into, and what you should do about it.

The 8 Parameters of the ARC Grid

Every quadrant is assessed through 8 fixed parameters, a diagnostic checklist for leaders:

  1. Reality – What the distribution looks like. (Shows you the surface truth.)
  2. Profitability – Where margins concentrate. (Reveals where profit lives.)
  3. Risks – Vulnerabilities built into the structure. (Exposes fragility.)
  4. Opportunities – Untapped levers. (Points to where growth can come from.)
  5. Bargaining Power – Who controls terms. (Defines leverage in the relationship.)
  6. Resilience – How well shocks can be absorbed. (Tests survival strength.)
  7. Scalability / Trajectory – The position's growth potential. (Shows the path forward.)
  8. Approach – What actions to take. (Answers the question: so what now?)

Via these parameters, you can assess not just where you are, but what it means. The 8 Parameters enable leaders to look deeper, into leverage, margins, resilience, and scalability.

The ARC Grid Quadrants

(Customer Base Distribution × Revenue Contribution)

Top-Left

Heavy Weights
(Narrow + Concentrated)

Few customers, but a few whales dominate.

Top-Right

Whales & Minnows
(Broad + Concentrated)

Broad base, but a few whales dominate.

Bottom-Left

Balanced Power
(Narrow + Even)

Narrow base, even revenue share.

Bottom-Right

Democratized Market
(Broad + Even)

Broad base, spread wide and even.

This 2×2 may look simple, but the implications run deep. Each quadrant has its own vulnerabilities, opportunities, and required strategy.

Quadrant Playbook (8 Parameters Each)

Top-Left: Heavy Weights (Narrow + Concentrated)

A common pattern: 30% of customers generate 70% of revenue.

Example: An enterprise SaaS company where two key clients contribute 60% of revenue.

  1. Reality – Heavy dependence on a few accounts.
  2. Profitability – Big customers bring high margins. The "70% others" can yield higher margins if filtered.
  3. Risks – Losing any whale crushes revenue. Weak negotiating position.
  4. Opportunities – Use the 30% as stable cash engines. Refine the 70% into profit divers.
  5. Bargaining Power – Depends on share of customer turnover. If you're 5% of their spend, they hold leverage; if you're 60%, you hold leverage.
  6. Resilience – Low. One exit can shock the system.
  7. Scalability – Sustainable only if industry is slow or norm. Otherwise, urgent need to broaden base.
  8. Approach – Guard the 30% flawlessly. Filter the 70% carefully. Rebalance dependence over time.

Top-Right: Whales & Minnows (Broad + Concentrated)

A broad customer base, with concentrated revenue.

Example: An e-commerce marketplace with 10,000 sellers, but 15 top brands account for half of GMV.

  1. Reality – Large base, but whales overshadow minnows.
  2. Profitability – Margins skewed toward whales. Minnows are more margin-rich.
  3. Risks – Resource drain on whales, neglect of minnows. Still vulnerable to whale exits.
  4. Opportunities – Scale minnows into mid-tier contributors. Test innovation across base.
  5. Bargaining Power – Whales dominate if you're a small % of their turnover. Minnows offer leverage where you are significant.
  6. Resilience – Medium. Base cushions shocks, but whale exits still hurt.
  7. Scalability – Strong, if minnows are nurtured. Can evolve into sustainable growth.
  8. Approach – Tier customers (A/B/C). Service whales efficiently, not indulgently.

Bottom-Left: Balanced Power (Narrow + Even)

Few customers, but each contributes meaningfully.

Example: A design studio with 8 clients, each making up 10–15% of revenue.

  1. Reality – Narrow base, fairly equal distribution.
  2. Profitability – Stable margins if managed tightly.
  3. Risks – Less vulnerable to one exit, but still immediately felt.
  4. Opportunities – Deepen partnerships (co-create, loyalty programs, joint planning).
  5. Bargaining Power – Mutual dependence; each side matters.
  6. Resilience – Low. Fragile to single exits.
  7. Scalability / Trajectory – Not scalable without expanding the base.
  8. Approach – Protect relationships fiercely while building pipeline for diversification.

Bottom-Right: Democratized Market (Broad + Even)

The ideal quadrant: broad and even spread.

Example: A subscription business with 5,000 customers, no single account contributing more than 2% of revenue.

  1. Reality – No dominant accounts; spread is wide and even.
  2. Profitability – Margins depend on system efficiency. Costs rise if servicing isn't standardized.
  3. Risks – Complexity drag. Too many accounts can become unmanageable.
  4. Opportunities – High resilience. Sustainable if you can automate most of it.
  5. Bargaining Power – Strong. No single account dictates terms.
  6. Resilience – High. Losing a few accounts has minimal effect.
  7. Scalability / Trajectory – Highly scalable. Standardize offerings, automate servicing, use analytics to upsell and cross-sell.
  8. Approach – Standardize offerings, automate servicing, use analytics to upsell and cross-sell.

The Takeaway

The ARC Grid isn't about good or bad companies. It's about clarity.

  • Are you dependent on a few?
  • Are you balanced but fragile?
  • Are you broad but still dominated?
  • Or are you resilient with distributed strength?

Every business sits somewhere on this grid. The critical insight is not where you are, but what you do about it.

The ARC Grid turns raw sales data into a mirror. It reveals your leverage, your risks, your resilience, and your path forward.

The real question is: Do you know your ARC, and are you acting on it?

Ready to discover your position?

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