We recently interviewed Eric Lawton of Impact Financial Wealth Management about the intangibles that drive business value. In a previous post we covered human capital. This time the focus is on customer capital and why it’s one of the most powerful yet overlooked assets in your business.

What Is Customer Capital?

Customer capital refers to the strength of your company’s relationships with its cutomers. It’s not just about having a long list of customers, but about understanding:
• Who you serve best
• Where you dominate your market
• Which products or services drive profitability

When buyers evaluate your business, they’re looking closely at how well you know your customers, how much those customers rely on you, and how difficult it would be for them to go elsewhere. In other words, what’s the stickiness factor?

Do You Know Where You Excel?

Many companies try to be everything to everyone. But when you drill down and analyze which customers and products are most profitable, a different picture often emerges. Sellers should regularly evaluate customer profitability and product margins. By identifying your highest-margin areas and focusing there, you can drive more value with less effort and make your business more attractive to buyers.

If you dominate one or two areas in your market, that becomes a magnet. Buyers see that dominance and know there’s a clear path to scalability and success.

Buyers Want to See Indispensability

Buyers also want to know: are you indispensable to your customers? In industries like aerospace, concentration is common. One customer might represent 60 percent or more of your revenue. That sounds risky at first glance, but the key is demonstrating why that customer relationship is unshakable. What we often call this the “stickiness factor”.

As Keith explains, if your company is deeply embedded in your customer’s operations — providing engineering support, design collaboration, or innovation — you’re more than just a vendor. You’re a partner in their success.

That kind of integration makes your company indispensable. And when a buyer sees that, it reduces risk and increases confidence in your long-term value.

Real-World Example: When Profitability Analysis Pays Off

There is an example of a client whose largest customer made up 70 percent of the business. But margins were low, dragging down the company’s EBITDA. After doing a SKU-level profitability analysis, the team discovered that 20 percent of the products were barely breaking even.

Rather than accept that as the norm, they went back to the customer with the data. They explained that unless prices were raised, they couldn’t continue producing those products. The customer chose to pay more rather than switch vendors because moving production elsewhere would be time-consuming and costly.
The takeaway: when you are truly indispensable, customers will do what it takes to keep working with you.

Certain Members of Osage Advisors are Registered Representatives of and conduct securities transactions through StillPoint Capital, LLC, Tampa, FL. Osage and StillPoint are not affiliated.

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