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Growth Rate Definition

The total increase or decrease in a population during a given period divided by the average population in that period.

A growth rate is the percentage increase or decrease in a specific metric – sales, revenue, customer base or market share, for instance – over a defined period of time. For instance, to calculate the increase or decrease in population, divide the total increase or decrease in a population during a given period by the average population in that period. Growth rate can quantify the speed at which a particular aspect of a business is expanding or contracting. This metric helps businesses understand the pace of their development and adapt their strategies accordingly. What’s more, it is a dynamic indicator of a business's performance over time. For example, rapid growth might indicate successful marketing initiatives or high demand for a product. Conversely, declining growth rate could signal market saturation or the need for strategy adjustments

Who relies on growth rates?

Business executives, marketing managers and analysts monitor growth rates to evaluate the impact of marketing campaigns, assess product performance and identify emerging trends. Investors use growth rate data to assess a company's potential for future profitability and value.

Why should I care about growth rates?

Growth rates provide insights into the health and trajectory of a business, meaning that business and marketing professionals can track growth rates to measure the success or failure of strategies. In addition, the growth rate can help identify areas of improvement or potential issues before they become significant problems.