How to Calculate Growth Rate: Key Metrics for Decision-Making

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I. The Strategic Value of Growth Rate in Sales
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Growth is more than a number—it’s a compass that helps us make every strategic decision in sales. In a fast-paced B2B world, understanding your company’s growth rate is essential. Whether it’s acquiring customers, increasing revenue, or expanding your pipeline, accurate metrics are critical for sales leaders to recognize trends, prioritize resources, and forecast effectively.

Metrics such as:

• Revenue Growth Rate
  
  
• Churn Rate
  
  
• Lead Velocity Rate (LVR)
  
  
• Customer Acquisition Cost (CAC)
  
  
• Lifetime Value (LTV)
  
  

help define a go-to-market strategy, but increasingly data is available that cannot rely only on analysis.

Do you want to put metrics into action? Discover how OneShot.ai gives your sales team the ability to generate action based on data-backed outbound strategies, easily.

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II. What is Growth Rate? (Definition & Relevance)
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Growth rate is the measure of the percentage up or down change in a specific metric in the business over time. It gives an understanding of how fast a business, product, or customer is growing.

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Types of Growth Rate:

• Year-over-Year (YOY): this metric results in the growth or contraction in comparison to the same period in the previous year.
  
  
• Month-over-Month (MOM): Measures short term growth every month.
  
  
• Quarter-over-Quarter (QOQ): Wider perspective than MOM and best for analyzing strategic shifts.
  
  

Each of these metrics gives businesses a different lens to measure progress. YOY is good for long-term trends with the noise of seasonal effects smoothed out, allowing you to paint a bigger picture for stakeholders. MOM is better for fast-growth startups or companies iterating quickly on their product or GTM strategy. QOQ is a happy medium for B2B companies that set performance KPIs often and cash flows and sales cycles are quarterly.

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Common Growth Rate Metrics:
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• Revenue Growth Rate
  
  
• Customer Growth Rate
  
  
• Monthly Recurring Revenue (MRR) & Annual Recurring Revenue (ARR)
  
  
• Lead Velocity Rate (LVR)
  
  

Revenue Growth Rate shows the company's ability to scale the top line. Customer Growth Rate shows market penetration and demand. MRR and ARR are standard metrics in any recurring revenue business that show predictability and gauge operational performance. LVR helps assess future pipeline health and scalability of sales productivity.

Growth rate is especially important for outbound sales leaders because it tracks how well they have applied their strategies in moving into markets and establishing customer pipelines. By tracking growth rate, you can use it as a benchmark for performance and be able to iterate more effectively on GTM strategies as well as align the team on what’s working.

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III. How to Calculate Growth Rate (Formulas & Examples)
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In essence, growth rate is calculated using the following formula:

Growth Rate (%) = ((New Value - Old Value) / Old Value) x 100

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1. Revenue Growth Rate
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If revenue increased from £100,000 to £150,000 in a quarter:
((150,000 - 100,000) / 100,000) x 100 = 50% Revenue Growth Rate
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Revenue Growth Rate (RGR) is probably the most cited performance metric in any business context. It exemplifies the increase in total revenue earned in a defined time period and gives you a real and clear view into the performance of your sales or monetization strategy.
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This metric becomes even more powerful layered in with contextual variables such as length of sales cycle, market conditions, product change, pricing, and strategy.
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A robust RGR typically suggests that customers are being acquired and upsold, or that churn is decreasing. It is, however, valuable to also consider the quality of that revenue:

• Is it primarily from one-time sales, or is it sustainable revenue via subscriptions?
  
  
• Is the overall margin improving at scale, or is it lessening due to the costs of acquisition?
  
  

Lastly, understanding the inputs that are driving this growth (price increase, promotion, entering new market, channels, etc.) will allow you to orient future improvements across the segments.
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Ultimately, RGR is not merely a number. It is a signal.
A jump of 50% either means you nailed product-market fit or that you had a single purchase from an enterprise client. In either case, the careful tracking of RGR provides growth strategies that are based on actual and measurable data.

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2. Customer Growth Rate
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Customer Growth Rate (CGR) is a nice way to see the growth of your customer base in a defined time frame. CGR is a good indicator of market demand, brand legitimacy, and customer acquisition efforts all at once.
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Formula:
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CGR = ((New Customers - Old Customers) / Old Customers) * 100%
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Example:
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If your last quarter had 1,000 customers and now you have 1,250 customers:
((1,250 - 1,000) / 1,000) * 100% = 25% Customer Growth Rate
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Unlike revenue, which can be manipulated based on pricing or upselling, CGR is purely volume. When you have a high CGR, it means that your methods to drive leads, sales processes, and brand awareness are being converted to actual customers.
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Nevertheless, raw customer growth can sometimes be deceptive when taken out of context. If your churn is on the rise, then your net customer growth isn't very meaningful. This is why it is important to track both CGR and additional metrics, such as:
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• Churn Rate
  
  
• Customer Lifetime Value (CLTV)
  
  

CGR can also give insight into your product-market fit. Sustained growth over time shows that you're actually solving a real problem for an audience. If your growth comes with a spike during campaigns and then plateaus, consider assessing the success of your retention and onboarding efforts.
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CGR by segment can even tell a deeper story:

• Is CGR in the Enterprise segment rising at a quicker pace than in SMBs?
  
  
• Is the uptick of new customers coming more from a specific geography, industry, or marketing channel?
  
  

This information will better inform your GTM strategy, as well as your product roadmap moving forward.
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In outbound sales, CGR shows how effective your outbound sales team is at transforming their targeted approaches into actual relationships. With the use of tools like OneShot.ai, outbound sales teams are able to automate personalization, prioritize high-fit leads, and scale activities that actually move the needle.
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In the end, CGR is the pulse of your customer acquisition engine; measuring and optimizing CGR will help ensure your pipeline is healthy, both now and in the coming quarters.

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3. Monthly Recurring Revenue (MRR) / Annual Recurring Revenue (ARR)
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MRR and ARR are the gold standards for tracking predictable revenue in subscription businesses, indicating the recurring revenue you can expect to realize either monthly or annually, offering a glimpse into your financial stability and future growth.
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• MRR = Total monthly subscription revenue from all active customers
  
  
• ARR = MRR × 12

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Monthly Recurring Revenue (MRR) & Annual Recurring Revenue (ARR)
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Having 500 customers each paying £100 per month translates to £50,000 in MRR. When that figure is multiplied by 12, you receive an annual MRR of £600,000. An increase in MRR/ARR means you are not only bringing in customers, but they are also being retained. This is important when it comes to SaaS businesses, as long-term retention helps drive profitability. MRR also helps identify trends for expansion (upsells, cross-sells), contraction (downgrades), and churn.
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There are a few different types of MRR to keep track of:

• New MRR: Revenue from new customers
  
  
• Expansion MRR: Additional revenue from existing customers
  
  
• Churned MRR: Lost revenue from cancellations/downgrades
  
  
• Net New MRR: (New + Expansion - Churned)

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Understanding the behaviors of each MRR type will allow you to build and optimize your customer success tactics. If Expansion MRR is high, customers are finding even more value out of your product. If Churned MRR is significant, it may be time to review your onboarding, support, or the usability of your product.
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With outbound sales, MRR and ARR are a direct reflection into how your team is driving sustained revenue. A big spike in MRR from outbound deals shows that your messaging and targeting is in alignment with the market.
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With recurring MRR, forecasting becomes much easier. Investors want to see this number because it indicates reliability of revenue. This also makes life easier for internal teams trying to predict budgets, staffing, and growth campaigns.
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In summary, MRR and ARR are not just financial metrics; they are tactical instruments to help unify departments, set achievable targets, and promote sales maturity you can track.

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4. Lead Velocity Rate (LVR)
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Lead Velocity Rate measures the month-over-month growth in qualified leads entering your pipeline. Unlike many lagging indicators we discussed earlier, such as revenue, LVR provides a forward-looking indicator of your sales momentum.
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LVR (%) = ((Current Month’s Qualified Leads – Prior Month’s Qualified Leads) / Prior Month’s Qualified Leads) × 100
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For example, the previous month you had 200 qualified leads. This month you have 250 qualified leads. LVR would be calculated this way:
((250 – 200) / 200) × 100 = 25% Lead Velocity Rate
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LVR is powerful for a number of reasons, but most importantly because it’s a predictor of your anticipated growth. If leads in your pipeline are consistently rising, then typically, revenue too, will follow. LVR is another sales leader tool for forecasting performance, providing notice for capacity planning and resource allocations.
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What constitutes a qualified lead is subject to your criteria—budget, authority, need, and timeline (BANT), intent signals, engagement scores, or CRM activity. Just be sure that you apply your qualifications consistently, otherwise you could find yourself with misleading LVR results.
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Outbound sales can greatly affect LVR. High-performing outbound teams do not simply increase volume, they increase quality. Tools like OneShot.ai helps enrich data, identify leads consistent with your ideal customer profile, and automates outreach with personalization – making sure that while your leads are growing fast, they are also meaningful.
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Furthermore, LVR can be distinguished by the source of the lead, campaign, or vertical. This allows you to double down on what is driving results and iterate on what is not.

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IV. Why LVR Is Not Enough: The Need for a Holistic Lens
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While Lead Velocity Rate gives you an exciting glimpse into the future health of your pipeline, it’s a fraction of the insights. Growth does not come from volume, it comes from the ability to convert that volume into customers who are loyal and profitable.
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This is why understanding Churn Rate, Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV) is just as important. These metrics allow you to measure:

• Retention: Will you keep those customers you worked so hard to acquire?
  
  
• Efficiency: How much do you invest to acquire an individual customer?
  
  
• Value: How much revenue can you expect from an individual customer over time?
  
  

These metrics inform the tenets of a sustainable growth strategy. A high LVR along with high churn or high CAC can indicate problems. A reduced LTV along with low CAC indicates a business at scale.

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(V) Churn Rate: Measuring Customer Retention
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Churn Rate is the percentage of customers that stop doing business with you over a given period. It's an important indicator of customer satisfaction, suitability of product environment, and operations health.
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Churn Rate (%) = (Lost Customers During Period / Total Customers at Start of Period) × 100
Example: At the beginning of the month you have 500 customers and lose 25:
(25 / 500) × 100 = 5% Churn Rate
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An above-average churn rate implies that your business is losing customers at a rapid pace, and in many cases, faster than it is acquiring them. This worsening of customer growth negatively contributes to annual growth figures but also serves to increase your Customer Acquisition Cost (CAC), as you are forced to focus time and effort on replacing the lost revenue.
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Churn generally comes in two forms:

• Customer Churn (number of customers lost)
  
  
• Revenue Churn (value of lost MRR/ARR)
  
  

Revenue Churn is especially pertinent for SaaS companies because losing a high-paying customer is worse than losing multiple low-paying customers.
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Out of the box, outbound sales teams can mitigate churn by ensuring a good fit during acquisition of new customers, which requires attempting to look past firmographics and delve into actual pain points, intent signals, and readiness to buy. The closer your acquisition pitch aligns with what a prospects actual needs are, the more likely they will stick around.
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Churn analysis is also valuable for product and support teams. When you understand when and why customers churn (e.g., bad onboarding, lack of features, bad support), you can proactively solve risk factors.
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A decrease in churn signals a level of maturity and sustainability. It tells investors and stakeholders that you are creating value not just by acquiring customers, but retaining customer value. Outbound sales reps are paramount in this because they are bringing in customers with high fit that are likely to stay and grow.
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Churn is not just a metric for reacting; it is a strategic metric. The lower your churn, the better your position for exponential growth.

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VI. Customer Acquisition Cost (CAC): Understanding Efficiency
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Customer Acquisition Cost, or CAC, is the general running cost of acquiring a new customer. It is a core KPI to measure the effectiveness of marketing and sales resources.
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CAC = Total Sales & Marketing Cost / New Customers Acquired

Example: If you spent £50,000 on sales and marketing in a quarter and generated 500 customers:
£50,000 / 500 customers = £100 CAC
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A low CAC suggests that you have an efficient customer acquisition "machine." A higher CAC may indicate inefficiencies in targeting, the length of the sales cycle, and/or messaging.
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CAC can be particularly useful when considered alongside other metrics, such as LTV (Lifetime Value). A strong LTV:CAC ratio, usually 3:1 or higher, will indicate strong, sustainable growth.
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It is also important to keep track of Blended CAC (the combined cost of inbound and outbound efforts) and Payback Period (how long it takes to recover the CAC from the revenue a customer provides). This provides a better overall sense of the effectiveness of your investment into a profit.

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VII. Lifetime Value (LTV): Predicting Long-Term Revenue
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Lifetime Value (LTV) is the projected total revenue from a customer over their entire relationship with your business. It helps predict revenue, prioritize retention, and evaluate the return on investment of your sales efforts.
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LTV = Average Revenue Per User (ARPU) × Gross Margin × Average Customer Lifespan

Example: ARPU = £100/month, Gross Margin = 80%, Avg. Lifespan = 24 months
LTV = 100 × 0.8 × 24 = £1,920
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A high LTV indicates that your product is providing long-term value to your customers and encouraging them to continue payment over an extended time.
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When compared to your CAC, LTV informs you whether your marketing efforts are earning a profit.
Example: If CAC = £100, and LTV = £1,920 → strong ROI.
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LTV gives you insight into who your best customers are. What segments of your customers generate the most lifetime revenue? What are the behaviours associated with those segments? Which industries or deal sizes correlate with longer lifetime revenue?
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Armed with these insights, outbound sales teams can target warm leads based on similarities to their high LTV customers. LTV also drives strategy across departments.

• Product leaders can align their roadmap to focus on features that generate retention.
  
  
• Marketing can run specialised advertising that targets lookalike audiences on social media.
  
  
• Sales can fine-tune their messaging and sales approach by looking for upsell and cross-sell opportunities that directly impact customer life's lifespan.
  
  

Remember that LTV is not a fixed amount; rather, it is an estimate. It is influenced by customer churn, changes in pricing, and updates in product offerings. Therefore, it should be reassessed and monitored periodically.
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In this way, sales automation software such as OneShot.ai can assist in improving your monthly customer LTV through improved fit between your client and closing, onboarding process, and relationships built with your clients from day one, and again, during the first outreach.

LTV doesn't necessarily have to consider dollars; it considers directional. It indicates whether your growth is shallow and transactional or deep and durable.

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VIII. The Foundation: Growth Metrics as Your Sales Strategy Engine
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Though overall metrics such as Churn Rate, CAC and LTV may appear operational at first glance, they are actually strategic in nature. When accompanied by Revenue Growth Rate, MRR/ARR, Customer Growth Rate, and Lead Velocity Rate, they represent the bedrock of modern, intelligent sales strategy.
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Tracking these metrics in silos is a disservice to the metrics. Using these metric's model together – as part of a real-time, feedback loop at the entity and sales funnel level – the team can:

• Determine the most lucrative segments and most valuable customers
  
  
• Reduce waste in acquisition and double down on targeting based on intent
  
  
• Accurate predicting of revenue based on sales capacity management
  
  
• Proactive managing of retention that coincides with what customers need from you
  
  
• Move budget toward things that create value over the long haul
  
  

What’s the takeaway?
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You can’t grow what you can't measure and you can’t scale what you do not understand.

Whether you’re building the pipeline for next quarter or re-evaluating your GTM motion, growth metrics are not merely a definable set of performance measures to evaluate how your team is focused, rather they serve as catalysts of improved information and decision making—the essential elements of your revenue engine.

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IX. OneShot.ai: Power Your Metrics with Precision
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Outbound success starts with smarter data.
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OneShot.ai provides the additional layer of data to help sales leaders track key growth metrics (and improve these metrics) across the funnel by:

• Bringing high intent leads surfaced by revenue potential and ICP fit
  
  
• Automating personalized messages in outreach - at scale
  
  
• Providing live feedback loops through CRM integrations
  
  
• Equipping your team with informed decision making to help reduce CAC, and forecast LTV
  
  

Whether you are building pipelines, helping accelerated conversions, or helping the platform better retain customers, OneShot.ai will directly help you turn insights into action so organizations do not just scale faster, more intentionally and more precisely.

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🔍 Frequently Asked Questions (FAQs)

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1. How do you calculate growth metrics?

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Growth metrics are calculated using the formula:
Growth Rate = ((Ending Value – Starting Value) / Starting Value) × 100
These metrics can apply to revenue, users, profits, or any other measurable data point over a specific period.

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2. How do you calculate business growth rate?

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To calculate business growth rate:
Growth Rate = ((Current Period Revenue – Previous Period Revenue) / Previous Period Revenue) × 100
This helps you understand how fast your business is expanding in terms of sales, market share, or other KPIs.

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3. What is the formula for list growth rate metric?

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List growth rate is used in email marketing and subscriber tracking.
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Formula:
List Growth Rate = [(New Subscribers – Unsubscribes) / Total Subscribers] × 100
It shows how effectively your audience is growing over time.

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4. What is the formula for growth KPI?

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The formula depends on the KPI you are measuring. A general growth KPI formula is:
Growth KPI = ((New Value – Old Value) / Old Value) × 100
You can use this to track revenue, users, leads, or any core business metric.

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5. How to calculate annual growth rate over multiple years?

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To calculate Compound Annual Growth Rate (CAGR) over multiple years:
CAGR = [(Ending Value / Beginning Value) ^ (1 / Number of Years)] – 1
This smooths out growth over time and is ideal for long-term trend analysis.

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6. How to calculate growth rate in Excel?

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In Excel, use the formula:
=((B2–A2)/A2)*100
Assuming A2 is the old value and B2 is the new value. Excel also allows CAGR calculations using:
=POWER((B2/A2),(1/N))-1
Where N is the number of periods.

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7. What are examples of growth metrics in business?

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Revenue Growth Rate

Customer Acquisition Growth

Website Traffic Growth

User Retention Rate

Monthly Active Users (MAUs) Growth
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These help track both financial and operational performance.

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8. How to calculate growth rate of a company?

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Use revenue or net profit over time:
Growth Rate = ((Revenue This Year – Revenue Last Year) / Revenue Last Year) × 100
Apply this formula to quarterly, annual, or custom timeframes depending on your analysis.

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