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sifatahmed
Jan 08, 2022
In General Discussions
Month-over-month, year-over-year, and quarter-over-quarter are all terms to measure rates of change and growth comparing two identical periods of time. For example, how does revenue over this time period compare to a previous time period? This is where month-over-month (MOM) comes in as a valuable metric for growth marketers to understand. In this article, we cover MOM growth, teach you how to calculate, provide a calculator, and discuss which metrics are most important for mobile marketers to measure. What is Month-Over-Month (MOM) Growth? Growth on a MOM basis is a common metric measured by most functions of a company, whether it’s finance, product, marketing, or sales. The finance team tracks expenses and revenue MOM, the product team tracks progress on feature requests, bug fixes, and usage MOM, and the marketing team tracks leads, conversions, retention, and more every single month. Growth on a monthly basis Colombia Phone Numbers List is a great indicator of momentum in the short term. As the period duration increases, such as with QOQ or YOY growth, the data becomes even more important as the time horizon offers reliable historical performance. The benefit of month-over-month growth is the power of compounding. Even if MOM growth is small, the benefits of compounding become clear rather quickly and contribute to exponential growth. How to Calculate MOM Percentage Increase MONTH-OVER-MONTH GROWTH CALCULATOR How much have you grown month over month (MOM)? Month 1 Month 2 CALCULATE MOM YOY Percentage Increase -7,000 -31,240 The percentage increase over a given period is a measurement that signifies larger trends of growth marketing. The formula for calculating the percent increase of growth is: Percent increase (or decrease) = (Period 2 – Period 1) / Period 1 * 100 As an easy example, let’s say your revenue grew from $100 in month 1, to $200 in month 2. Here is how you would calculate the MOM percent increase: MOM increase = ($200 – $100)/$100 * 100 = 100% This calculation can be used to measure the growth of users, customers, revenue, employees, and much more. As you grow MOM and quarter over quarter, the power of compounding begins to take effect year over year. What is Compounding Monthly Growth Rate (CMGR)? CMGR, or compounding monthly growth rate, is the average month-over-month growth over a longer-term duration, typically 6-18 months. The formula for calculating CMGR is: CMGR = Measurement in Last Month/Measurement in First Month 1/[Last Month – First Month] – 1 As an example, let’s say you are a mobile marketer who wants to measure the growth of total users MOM for the full year since you launched your app. You would use CMGR to find an average, versus calculating each month individually. At the end of month one, for example, you only acquired 100 users but by the end of month 12, you had 5,000 active users. Here is how to calculate the CMGR in your situation: CMGR = 5,000/100 1/[12 – 1] – 1 = 42.71% Every month, on average, the number of active users increased by more than 42%. This is a total percentage increase of 4,900%. While 42% growth MOM is huge, the power of compounding becomes evident when you look back at the year and realize you grew 4,900%. What is Monthly Recurring Revenue (MRR) Growth? One metric that is common in SaaS and other subscription-based business models is monthly recurring revenue (MRR). MRR is the amount of money your business consistently and predictably can expect to earn on a monthly basis. This is a powerful metric that indicates healthy, sustainable growth and retention rates. Monthly recurring revenue is an important metric to measure and one you will want to see increase MOM. MRR growth can come from a few places. Perhaps your app acquired and onboarded new paying users this month, or you were able to upgrade users to a higher paying tier. Either way, MRR growth is a great signal of growth. Although MRR growth is a great signal of overall growth, it may not be a sign of sustainable growth. If the user economics are not sustainable (ie. it costs you more to offer the product or service than you earn in revenue), MRR growth can increase the speed towards the business’s ultimate demise. 3 Growth Metrics You Should Measure MOM As a growth marketer, it can be a challenge to navigate your company’s mountainous range of data to find the metrics worth reporting on. This is why many people report on vanity metrics. Below are the 3 metrics we find most valuable for mobile marketers to track: Retention Rate Understanding your app’s retention rate is vital for your business’s longevity. Many businesses fail because they allocate the vast majority of their resources to acquiring new users, without making adequate investments and efforts to retain them. Customer acquisition numbers can sometimes cover up a steep decline in retention shortly thereafter, but unless retention is growing in parallel to acquisition, the losses from acquisi
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