Month-on-month growth (MoM growth) describes the percentage change in a particular key performance indicator from one month to the next. It is used to quantify short-term trends within organisations.
Typical metrics analysed in MoM growth are:
- Turnover
- User figures (e.g. active users)
- Leads or conversions
- recurring revenue (MRR)
- App or product usage
The basic formula is:
- MoM growth = ((current month’s figure – previous month’s figure) / previous month’s figure) × 100
MoM growth is particularly important because it provides rapid insights into the dynamics of a business model. Unlike annual figures, it highlights trends, changes and potential problems at an early stage.
Advantages of MoM growth:
- rapid identification of growth trends or downturns
- immediate feedback on product or marketing initiatives
- better management of short-term decisions
- increased operational flexibility
- early identification of risks or opportunities
MoM growth is particularly relevant for start-ups, as they often operate in fast-growing and dynamic markets. Even small changes can have a significant impact on overall performance in such markets.
At the same time, it is important to interpret MoM figures carefully, as they can fluctuate significantly. Seasonal effects, marketing campaigns or external events can cause short-term fluctuations that do not necessarily reflect long-term trends.
For this reason, MoM growth is often analysed in conjunction with other key performance indicators, such as:
- Year-on-Year (YoY) Growth for long-term trends
- Cohort analyses of user behaviour
- Retention and engagement metrics
For many start-ups, steady and positive month-on-month growth is an important indicator of scaling potential and market acceptance.
innoWerft helps founders to define relevant growth metrics, interpret them correctly and make data-driven decisions to ensure sustainable growth.