What Is Customer Growth Rate?
Also known as Customer count growth, Logo growth rate, Net customer growth
Customer growth rate is the percentage change in the number of paying customers over a given period, after accounting for both new customers and those who left. It is calculated by subtracting the starting customer count from the ending count and dividing by the starting count. It shows whether the customer base is actually expanding.
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Open the toolCustomer Growth Rate explained
Customer growth rate is a net figure. If you add 85 customers and lose 25 in a quarter, the base grew by 60. Reporting new customers alone hides churn, so always look at the net change and, ideally, the gross adds and losses that sit behind it. That breakdown shows whether growth is coming from strong acquisition, low churn or both.
Customer growth and revenue growth do not always move together. A company moving upmarket might add fewer customers while revenue grows faster, because each new account is bigger. A company adding many small self-serve accounts might show strong customer growth with flat revenue. Reading the two side by side, along with ARPU, explains what is really happening.
For outbound and marketing teams, customer growth rate is a direct measure of acquisition output once churn is accounted for. Tracking new customers by channel and comparing with churned customers by original channel shows which sources build a lasting base. A channel that brings many customers who leave within months adds little to net growth.
Customer Growth Rate formula
Customer growth rate = (Customers at end of period − Customers at start of period) ÷ Customers at start of period × 100
- Customers at end of period
- Paying customers active on the last day of the period, after new customers are added and churned ones removed.
- Customers at start of period
- Paying customers active on the first day of the period, used as the base for the percentage.
Worked example: A company starts the quarter with 400 paying customers. It adds 85 new customers and loses 25, ending with 460. Customer growth rate = (460 − 400) ÷ 400 × 100 = 15% for the quarter.
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Customer Growth Rate example
A B2B scheduling tool ends last year with 1,200 customers and this year with 1,500, a 25% customer growth rate. Revenue grew 40% over the same period because the company started targeting larger teams through outbound, lifting average revenue per account. Customer growth slowed slightly, but the business grew faster overall, which the team explains to its board with both figures.
How to calculate customer growth rate
Set the period
Choose a month, quarter or year and use the same window consistently when comparing growth over time.
Count customers at both ends
Record paying customers on the first and last day of the period. Exclude free users and trials that have not converted.
Calculate the net change
Subtract the starting count from the ending count, then divide by the starting count and multiply by 100.
Break down adds and losses
Report new customers and churned customers separately so you can see whether acquisition or retention is driving the result.
Common mistakes
- Reporting only new customers and ignoring cancellations, which overstates how fast the base is growing.
- Counting free users or trials as customers, which inflates growth with people who are not paying.
- Comparing growth rates across periods of different lengths, such as a month against a quarter.
- Judging growth on customer count alone while ignoring that revenue per customer may be shrinking.
Customer Growth Rate FAQ
It depends on stage and model. Young companies growing from a small base can post high percentages, while larger companies grow more slowly in percentage terms. Compare against your own history and plan, and read customer growth together with revenue growth and churn.
Customer growth rate measures the change in the number of paying customers. Revenue growth rate measures the change in revenue. They can differ a lot when average deal size changes, for example when a company moves upmarket or adds lower-priced plans.
Subtract the number of paying customers at the start of the month from the number at the end, divide by the starting number and multiply by 100. For example, going from 200 to 212 customers is a 6% monthly growth rate.
Yes. If more customers cancel than sign up during a period, the ending count is lower than the starting count and the growth rate is negative. That usually signals a churn problem, an acquisition slowdown, or both.