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Growth Rate

What is your growth rate?

Your growth rate is the percentage increase of a metric over time. You could calculate the growth rate of your customer base, net sales or number of products offered through your store. To measure your growth rate for a chosen metric, subtract the past value from the current value, then divide by the past value and multiply by 100. ((Vcurrent - Vpast) / Vpast) x 100 = Growth Rate. Let's say your number of monthly customers increase from 1000 to 2000 over the previous month. Popping this information into the formula yields a 100% growth rate.

Why is it important to measure growth rate?

Analyzing the growth rate of various metrics allows you to take stock of your business' current momentum and consider what might be the driving factors behind this growth. Is there a spike in your customer base after a marketing campaign or the opening of a new sales channel? Knowing that the spike in visitors and purchases on your site were due to a single event can let you predict the effects of similar events or a leveling off of traffic. Growth measurements keep your finger on the pulse of your business and cut down on surprises.