Conversely, the growth rate is how many new customers you've acquired.
As its name suggests, growth rate as a KPI focuses on how much you've grown as a company in a given time period. It is the complete opposite of churn rate, and as a result, you want this number to be high, as high implies good growth and new customers added.
By comparing churn rate to growth rate, a business can determine if there was overall growth or loss during a specific time period. The ideal situation is a low churn rate and a high growth rate, so if a company lost 100 subscribers but gained 110, the net gain is 10. Conversely, if a company added only 100 subscribers and lost 110, the net loss is 10, and there was no growth in that time period, only loss.
As you can imagine, keeping an eye on these sales metrics
is absolutely critical for any company interested in succeeding.
Ensuring that the growth rate is higher than the churn rate as much as possible will keep companies afloat, whereas the reverse will result in declining revenue and profit. Keeping track of these KPIs can mean the difference between staying open and closing down the entire organization.
Businesses cannot operate successfully without having these figures, as they help to provide a strategic plan to gain new customers and, to course, correct customer service as needed.
Customer acquisition is also associated with costs as part of the overall process. It should always be noted whether customer churn affects how much you gain from your acquisition costs. If you're not seeing enough coming back, it is time to reconsider the sales process
and your spending.