Bill CanadyCEO & Founder, The 80/20 Institute · Be a Great CEO: Learn how to Fix it, Grow it, & Sell it.

Your Customers Are LOSING You Money! (The Profit Curve Explained) #shorts

15 Aug 2026 · 1 min

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In this short, Bill Canady explains how to construct and interpret a profit curve to reveal the profit contribution of different customer segments. He instructs viewers to sort customers from most to least profitable, then plot cumulative profit. The resulting curve typically shows a steep rise in the top 20‑25% of customers accounting for over 100% of annual profit, a middle segment that merely covers its own costs, and a trailing segment that actually erodes profit by returning 5‑30% of earnings. Canady emphasizes that this shape is common across businesses and that visualizing it makes strategic decisions about customer management clear.

Chapters

Before I name the boxes, run the profit curve once because seeing the shape is what makes the boxes obvious. Take your customers, sort best to worst on profit, and add them up cumulatively. The line climbs steeply through the first quintile, and by the time you're through the top 20 or 25% of accounts, you're already above 100% of the profit that the company earns in a year. That's the middle of your book, the accounts that essentially cover their own costs and nothing else. And then in the last stretch, it turns down and gives back somewhere between 5% and 30% of what you made. Every business I have run on this has this shape. Yours will too.