What is Customer Growth Rate

Customer growth rate refers to the speed at which you acquire new customers for your product or company. It’s a critical KPI when evaluating the overall growth of your business. A positive growth rate signals that there’s market demand for your product and that you're successfully tapping into that demand. Since this metric focuses on new customer acquisition, it can be used to forecast your company's financial future and serves as a reliable indicator of increasing market share.

How to calculate customer growth rate?

A quick way to calculate customer growth rate would be:

This formula provides a quick, numerical value to assess your customer growth. In SaaS, the most relevant metrics are often evaluated on a monthly or yearly basis to track B2B customer growth over time. However, relying solely on this calculation won’t give you the full picture. It’s essential to incorporate other metrics for a more comprehensive understanding.

Other metrics to complement customer growth rate

The average customer growth rate alone is not a reliable indicator of the health of your company on its own but coupled with the right metrics, it can provide a clearer overview.

Churn rate: Churn rate is the percentage of customers lost over a specific period. It’s calculated as: (NumberofCustomersLost/TotalCustomers)×100Together with the customer growth rate, the churn rate helps you calculate net growth. A high churn rate can offset growth, so tracking both metrics allows you to see the full picture of customer retention.
NPS:
NPS measures customer satisfaction and the likelihood of customers recommending your product. Tracking NPS alongside customer growth rate helps you assess how happy your new customers are and whether they’ll remain loyal after signing up.
LTV: LTV or lifetime value elucidates the total amount of money a customer spends on your product throughout their entire duration with you. Deriving additional revenue from existing customers is the only other way apart from new customer acquisition to increase revenues. An increasing LTV indicates that your customers see the value in your product and are likely to make repeat purchases. LTV and customer growth rate together provide a clearer picture of the future revenue projections for your product.

Things to keep in mind while looking at the customer growth rate

Evaluate your dataset. Always check the sanity of the data that you’re using to calculate the customer growth rate. If you’re using the total number of accounts or signups, make sure there are no test accounts or duplicate accounts included in this data.
Time Period. The monthly customer growth rate is generally a good metric to evaluate the rate of new customer acquisition. However, if you’re using an annualized customer growth rate then any seasonal fluctuations in the demand for your product may not be visible. Moreover, long time periods end up hiding insightful granularities that might be important for your business. Thus, it would be a good idea to use the smallest relevant time period to calculate the growth rate and then create a line chart or a column chart to represent this data over a longer period of time.
Falling growth rate. A falling growth rate doesn't always represent a reduced demand for your product or a slowdown in new customer acquisition. It all depends on what number of customers you start your calculation with. For example, if you add 20 customers over 100 initial customers then that’s a 20% growth rate but if you add 20 customers over 1000 initial customers then that’s only a 2% growth rate. In this case, the number of customers you acquired was the same but the customer growth rate varied significantly based on the count of your initial customers. Thus, over time, most companies face a declining growth rate since they have a larger existing customer base but this doesn’t mean that the absolute growth of the company is slowing down. Always take a look at the absolute customer count to verify if a falling growth rate actually reflects a slowdown in the rate of new customer acquisition. As companies capture more market share, their new customer growth rate may slow down organically.

The Benefits of EverAfter’s Customer-Facing Interface for Growth

EverAfter’s Customer-Facing Interface is an excellent tool for accelerating and managing customer growth. Here’s how it supports your growth strategy:

Improved Customer Onboarding: EverAfter personalizes and automates the onboarding process, ensuring new customers experience a seamless transition from prospect to active user. This not only helps reduce churn but also fosters early-stage customer satisfaction, contributing to a higher growth rate.
Enhanced Customer Engagement: With EverAfter’s interface, you can create a shared, collaborative space with your customers. By integrating mutual action plans, success criteria, and relevant resources, you keep customers engaged throughout their journey, improving retention and encouraging advocacy, which supports customer growth.
Real-Time Insights: The platform offers real-time tracking of customer engagement. This helps you quickly identify and address any issues or concerns, ensuring customers remain satisfied. By staying proactive, EverAfter can help maintain strong growth momentum.
Personalized Experience: EverAfter allows you to tailor the customer journey to individual needs. Whether it's personalized content, specific case studies, or segmented messaging, these personalized touches help drive deeper customer relationships and improve retention, which contributes to long-term growth.
Customer Success Automation: EverAfter enables automation and segmentation for customer success teams, ensuring the right customers receive the right information at the right time. This reduces the workload on your teams and helps scale your efforts as your customer base grows.

By using EverAfter’s interface to create more engaging, transparent, and seamless customer experiences, businesses can accelerate customer acquisition while improving retention—ultimately boosting their overall customer growth rate.