Customers Growth Rates: What They are and how to accelerate Them

Growth rate of customers is a test to determine the overall health of your company.

Much like your favourite houseplant, you can understand a lot about your growth in your business from your customers growth rate. The higher your customer growth rate, the better prospects for your company.

The following information will help you to know about growing customer rates, as well as the method of calculating your customer growth rate and strategies to increase the growth of your customers in your company.

  Skip ahead:  

•         What's the the growth rate?
•         Why is it crucial to measure the rate of growth in customers?
•         The effect of the growth rate of customers' on the ARR
•         How to calculate customer growth rate
•         3 factors that affect the rate of growth for customers
•         What factors can adversely affect the growth of customers?
• 5 ways to boost the rate of growth of customers
•         The significance of education for customers in promoting growing the customer base

What is the customer growth rate?

A customer's growth rate is one of the most important metrics used to gauge the rate that a business acquires and maintains its customers with their product or service. The rate of growth in your customer base is a key indicator of the overall health of your company - a positive growth rate shows there is demand for your product and your customer base is growing.

Why is it crucial to measure the growth of your customers?

Your customer growth rate is an important performance indicator (KPI) that you could use to determine the level of the demand for your item or service within a given time period.

The following are five top ways to measure increase in customer satisfaction for your business.

The most important indicator of company health

Your rate of customer growth is an important indicator for the health of your company. An enlightened business should have a good customer increase rate that indicates there's a consumer demand for your goods and services - and that you're able to convert that demand into paying customers in your book.

1. Predict recurring revenue
     The growth of customers is a useful measure to predict annual recurring revenue (ARR) for subscription-based businesses. If the number of customers you have increases then your revenue will increase. When you monitor your customer's increase rate over time, you can more accurately assess the growth of your revenue month-on-month and make predictions for the future.
2. Changes in the seasonal track
     If you can track your growth over time, you can get a better understanding of how customer growth shifts through the year, allowing you to predict and track seasonal changes. This can help you plan your customer engagement strategies better all through the year.
3. Understand customer engagement
     The high growth rate of customers suggests high levels of customer engagement, both from your audience and your customers. It could be due to several factors, including your marketing strategies, customers' education and your the positioning. If your customer base is increasing, that's a good sign for customer engagement. And the opposite is true also.
4. Attract investors
     If you're hoping to draw the attention of investors, high customer growth rates can be a good indicator for investors that your company has potential for growth. This will be one of many factors investors might consider.

How to calculate your customer's growth rate

In order to calculate the rate of growth for customers in your organization You must have data on how many customers you're adding every month.

Below are some metrics that you will have to keep track of:

• customers at the end of Month: This represents the number of clients your company has at the close of a given period - typically for a single each calendar month.
• Customer at the Beginning of the Month Total quantity of customers your business will have at the beginning of any given time period, generally, a calendar month.

Once you've gathered this information You can then employ the formula following to find out your customer increase rate.

Customer growth rate formula

The rate of growth for customers calculation is:

  Customer Growth Rate = ((Number of Customer at End of Month / Number of customers at the beginning of month) / Number of Customers at the Start of Month) * 100  

Here's a worked example of the formula in action:

If your business was able to count 5,000 customers at start of January and 5,500 towards the close of January, the formula to calculate customer growth could look similar to this.

Customer Growth Rate is ((5,500 + 5500) / 5,000) * 100 = 10 10%

If you take this as an example, your increase in customer numbers is 10 per cent, meaning that you have seen a 10% increase in customer numbers in the month of January. Not a bad start to the year.

Three factors influence the growth of customers

There are several factors that will affect the increase in any period. Below are three factors to consider.

• Strategies for acquisition: Depending on the acquisition strategies your business is using, your customer growth rate may fluctuate between up and down.
• Customer retention: To increase your customer base, you need to be retaining the customers you're acquiring. If your customers are churning and losing customers, this will impact the growth of your customers.
• Market conditions External factors that also impact customer growth, which include variations in seasons, changes in industry trends competitiveness, the economic environment. Some of these may be out of the scope of.

What can negatively impact customer growth?

There is also a variety of typical headwinds that impact customer growth rate in your business. Here are 3 factors that keep customer growth rates at a minimum.

Lack of customer engagement

A low level of customer engagement could adversely affect the growth rate of customers through affecting customer acquisition, retention expansion and advocacy.

If customers aren't fully engaged with your product and your company, you'll struggle to keep your customer growth rate increasing. It could be because of many different reasons such as poor user experiences, inadequate customer support, or the absence of onboarding or customer education.

Customer churn is high

If you just focus only on the amount of customers who come through your door and you don't get the full picture. You also need to take an examination of the amount of clients that have decided to leave following their signing or are choosing to not renew their contract.

Customer churn can have significant influence on your customers' growth rate. It's important to know the churn rate of your customers with respect to your overall customer growth rate so that you can know the overall general health of your company and to shift your focus from customer acquisition to customer retention.

To understand the nature of customer churn in your organization Utilize the formula below to estimate churn among customers:

  Customer Churn = (Lost Customers / Total Customers at the Beginning of the Time Period) 100  

Poor customer success

If your customers aren't hitting their goals with your products this could affect your growth rate for customers. A poor customer experience can impact your customer increase rates in a number of different ways, including:

• A lower number of referrals: If your clients aren't getting what they expect with your service or product you offer, they're not likely to refer them to friends or colleagues. A lower number of referrals will mean fewer customers.
• A lower level of brand loyalty: When your customers are happy and happy, they're more likely post their triumphs, leave positive reviews, and post on social media about your product. However, just like referrals, your customers are also less likely to turn into brand advocates if they're not succeeding.
• Lower renewals: At its maximum failure to satisfy customers could negatively affect renewals, which can lead to a higher rate of churn. This could have a huge impact on your customer growth rate if you don't take care to control it.

Success for customers is a key factor in helping to increase customer growth rates - especially with regards to retention and advocacy.

6 ways to boost the rate of growth for customers

There are a few strategies that you can employ to increase the growth rate of your customers - and increase recurring revenue for your business.

   1. Enhance the channels you use to acquire customers

 The acquisition of customers is an important aspect that affects the rate of growth for customers. To boost your customer growth, look at your customer acquisition channels and the way you advertise your products and services.It is time to test out different channels for customer acquisition or shift your focus and budget towards the channel which is delivering the highest return on investment. For example, if you're seeing the best results from organic search is a great indicator to invest more into your SEO and contents. Check out what's performing for you.

  2. Leverage customer referrals

A really effective way to increase customer growth rate is to leverage current customers to obtain more referrals and transform them into brand ambassadors.

Here are a few tips to help you do precisely this.

• Use customer education: IDC observed that referrals were number three of the most frequently reported benefits of customer education programs. When you help customers understand the value of your product and services, they're likely to suggest you to their peers.
• Develop a referral plan: Build a formal customer referral program to make receiving referrals simpler and more efficient. You can create templates for referrals that allow your clients to refer customers quick.
• Offer incentives: Incentivize your clients to send to their colleagues and friends by offering extra incentives within your referral program, with rewards such as coupons, freebies, merch and much many more.

Customers you already have can be your most valuable assets. Utilize them to acquire more customers - and increase your increase rate.

  3. Make use of social proof

Social proof is an effective marketing and sales technique to get more customers on your list - it's the most important tool for subscription-based firms. Prospective customers need to know who's already enjoying your product and using it before they buy.

Here are some ways to use social proof to boost the growth of your customers:

• Highlight your existing customers: Use social evidence from existing customers - like testimonials, logos of customers, as well as case studies, across all channels of marketing to aid in acquiring customers.
• Get user-generated content: Happy customers are your secret weapon. Use UGC including video reviews, suggestions and other community-generated content to create human-to-human bonds with prospective clients.
• Show off integrations When your product is integrated with another product, make sure you highlight the integrations to establish confidence and trust among your audience. Don't forget to inform the existing customers about it too.

Social proof can be employed to gain and keep clients, increase the number of referrals and support, as well as help increase the number of customers you serve over time.

  4. Customer onboarding at Streamline

The first impressions count. As new customers come into your business, provide a comprehensive onboarding program to make sure they get on the right track with your offerings.

The best customer onboarding programs are slick, seamless, and timely. Create memorable learning experiences starting beginning from the first day to let customers understand what's possible through your offerings and services and encourage them to be inspired.

There are a range of customer onboarding strategies that have excellent effects, for example:

• Self-led online courses
• Video for onboarding
• Knowledge Hub
• Webinars on boarding

Provide your customers with a designated place they can go to discover how to start using your product. They should also most importantly, they should receive personalized support when they're in need. This will help increase customer retention and boost referrals. The result? The good news is that it will boost your growth rate for customers.

  5. Review the positioning of your reviewer and how to communicate benefits

In order to increase the rate of growth for customers within your company, you must conduct a review of your positioning and communication to target your most desirable customers.

This could comprise:

• Defining the characteristics that make your brand distinctive
• Conversation with customers
• Studying how your competitors are up to

You may need to test and modify your message and positioning several times to find what speaks to your audience especially during the first days of offering a new service or product.

  6. Concentrate on the customer's success

Retaining your existing clients is essential to keep the rate of growth for your customers. To increase the number of renewals you can offer, concentrate on providing quick wins to customers as soon as possible in order to make them feel the immediate benefits from your products and solutions.

There's a huge range of strategies for customer success that you can employ to assist your clients achieve their goals and targets which include:

• Customer education: Customer education is a crucial tool that can increase the success of your customers within your company at each step of the journey such as onboarding, acceptance, renewals, and expansion.
• Customer support that is personalized: Sometimes clients may require additional assistance from your team - that's why personalized customer support comes in. If you are able, give omnichannel customer support so customers can be connected via the methods that are most suitable for them. This includes email, live chat, and much more.
• Expanding offers: Timely extensions can increase the success of your customers by providing customers with the tools and features they require to reach their goals. If you're in a strong connection with your clients, you can understand when expansion is the right path for them and use add-ons such as upsells, cross-sells and upsells to help customers get maximum value from your products.

The strategies to help customers succeed include a variety of methods you can boost customer retention by delivering continuous benefits throughout the lifecycle of a customer and not only around renewal time.

The significance of customer education in customer growth

Education of customers is an effective strategy for customer growth - helping you to attract as well as retain more customers. Learn how to use customer education to boost your customer growth rate.

Acquiring customers

An effective customer education plan could attract new customers your organization - while helping them learn something new, improve their capabilities, and meet their objectives.

Through creating content that is educational and targeted to your customers as well as their issues it is possible to set up your products as simple solution to their issues.

The ability to retain and renew

The renewal process is an essential step in the customer journey for any subscription-based business. This is among the most significant factors that affect your customer's growth.

With a comprehensive programme of customer education, you can deliver continuous benefits to your clients through deeply impactful and inspiring educational experiences. If you focus on customer education and education, you will be able to build stronger, longer-lasting relationship with your customers based upon superior service, ongoing quality, and a deeper involvement.

Account expansion

The importance of customer education is to help increase the number of customers who are expanding their business through the provision of timely information to customers that help them get maximum value from your offerings. If you have a successful customer-success program, customer expansion becomes a natural element of your conversation.

It's the reason 51 percent of executives declare that they're investing in the education of customers to expand by 2024 to gain more upsells, cross-sells, and add-ons.

As an example, a customer academy that helps your clients learn to be more effective in their job, then it becomes an opportunity to sell an upgraded product that helps them implement their newly learned skills in practice.

Start tracking your customer growth rate today

The rate of growth of customers plays a big role to play for businesses that rely on recurring revenue. If you're an organization that relies on subscriptions the rate of growth in your customers is an excellent indicator of your annual recurring revenue (ARR ).

The concept is simple: if you gain new customers as well as keep those you already have Your ARR will grow over time, which is good news for your business.

Growth rates of customers give companies insight into their performance. They indicate the number of customers you're acquiring as a percentage of the ones that are turning.

Investing in your customer success is about more than fulfilling expectations. It's about outperforming the expectations of your customers. By enhancing your customer support and services, optimizing onboarding and resources in addition to implementing an education program, you can improve your performance while providing your customers by providing them with self-serve tools as well as individualized learning pathways.

Ready to propel your customer success approach to the next step?

  Find out how your company can use customer education to enhance customer success today.  

  When your customers win the day, your business also wins.  

  Are you prepared to start this journey of transformation?