Transformative Month Over Month Growth Strategies for Modern Enterprises

1. Absolute tiny numbers represented by growth

It is quite simple to demonstrate impressive growth stats with tiny numbers. Any change will be significantly more dramatic if it is based on a tiny absolute foundation.

It may be tempting to leverage MoM growth in the early stages of our firm, but try to avoid doing so. It is preferable to be realistic and provide absolute numbers. Instead of displaying a 20% increase on 100 users, show this as 20 new users in a month.

Once our company reaches a certain size, it will be difficult to sustain those first artificially high growth rates, and who wants to indicate that their growth rates are steadily decreasing?

If we have received or are attempting to get investment from venture capital or angel investors, it is a better strategy to only introduce growth figures once we have scaled past a certain size.

Until then stick to absolute figures so that we don’t set ourself up for a downward growth graph and some unnecessary explaining.

2. Inconsistent growth rates

So, we know that compound growth rates flatten our monthly increase over a certain time period into a fixed percentage. If our monthly growth rates fluctuate a lot, we might want to express our compound growth rate as a range to be more accurate when reporting to investors or our board.

3. Using compound growth rates to describe declining linear growth rates

The compound growth rate for the months in the table below is 12%. That is a deceptive statement because the growth rate is lowering on a monthly basis. It decreased from 20% to 17%, then to 14% and finally to 12%. Don’t make the mistake of inflating your growth stats, even if it’s unintentional. It constantly makes an appearance in the end. 

Adding 1,000 per month is a linear growth, meaning that the percentage increase Month over Month is decreasing in each period.

If we notice that our growth is decreasing in a linear fashion rather than exponentially, use this information to investigate why this is happening and to devise a better growth model.

4. Vanity Metrics

Don’t bother with vanity metrics that aren’t important to our investors, accounting staff, or board of directors. Depending on our company strategy, we will have many key performance indicators (KPIs) that are directly tied to revenue and growth. Maintain our focus on the measures that are important.

Growth numbers for measures like traffic or bounce rates may be relevant at the top of the funnel or at the campaign level, but they have no direct influence on our business’s performance. The following are some metric blunders to avoid:

• To demonstrate a larger number, we are focusing on page views rather than active users
• Reporting on newsletter subscribers rather than subscribers
• Showing growth of total users instead of active users

5. CMGR is used to calculate the month-over-month growth rate

Unfortunately, this one does not work backwards. So, we know that we can include MoM data into our CMGR formula, which shows the growth that has occurred over a specific time period and flattens the oscillations between months.

However, if we try to go backward to deduce the growth difference of a certain month or months based on our CMGR, chances are we’ll get a huge discrepancy between what we get and what the original individual MoM was.