While keeping and upselling to current customers can boost profits, growing your customer base is essential for any business. Having a large customer base provides opportunities to expand the scope of your offerings and improve financial stability. It is also a cushion during economic downturns and times of uncertainty.
Here’s a guide to customer growth and essential strategies for expanding your client or customer base.
What is customer growth?
Customer growth is an increase in the total number of customers your business serves. It includes new customers making their first purchase and existing customers making repeat purchases.
Customer growth rate measures how quickly your customer base grows over a specific period. It’s a critical metric to track for sustained business success, and indicates how well you attract, convert, and retain customers. A positive rate often signals rising market share.
Here are a few benefits of focusing on customer growth:
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Sustainable revenue. Businesses with a larger customer base are better prepared to weather changing economic climates. If a downturn affects your entire industry, you may lose the same percentage of sales as your competitors, but you’ll have a softer cushion.
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Increased customer loyalty. You can’t expect every customer to come back, but by serving more people overall, you increase your chances of gaining loyal customers. Ecommerce doesn’t enjoy the same loyalty rates as industries like IT and professional services, but loyal customers are still integral to ecommerce success.
How to calculate customer growth rate
You can calculate your overall customer growth rate to determine how quickly your customer base is expanding over a specific period. The customer growth rate formula takes into account both new customer acquisition and customer churn (loss). Here’s what it looks like:
Customer growth rate = (Customers at the end of period − Customers at the start of period) / Customers at the start of period) x 100
Say your ecommerce cookware brand had 2,000 customers at the start of the first quarter (Q1) and 2,500 customers at the end of Q1. Plugging those numbers into the formula, you get:
(2500 − 2000) / 2000 x 100 = 25
Your company’s customer growth rate for that quarter is 25%, meaning you expanded your customer base by 25% over Q1.
Customer growth rate considerations
While customer growth rate is a crucial indicator for business health, it doesn’t always tell the full story. Here are a few important points in mind when reviewing this metric:
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Customer retention matters. Even with modest customer growth, a business can achieve high revenue if it boosts repeat purchase rates and customer value.
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Seasonality affects ecommerce. Holidays, promotions, or product launches may temporarily spike customer growth and shouldn’t be mistaken for long-term trends. Study your growth rate over a long period for a better sense of progress. Month-over-month growth may fluctuate, while annual growth paints a more stable picture.
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Churn can offset growth. Losing existing customers reduces your net growth rate, so monitor your retention metrics—especially your customer churn rate—alongside new customer growth. Note that churn is accounted for in the customer growth rate calculation.
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Use growth rate to understand marketing success. An increase in the number of visitors to your ecommerce site from low-intent channels may not lead to an increase in customers. Consider customer growth rate when evaluating your marketing strategy—it can tell you how well your campaigns contribute to sustained revenue growth.
Metrics to complement customer growth rate
While customer growth rate matters, it’s most useful when studied alongside other metrics. Using these other metrics alongside customer growth can help you assess your overall fiscal health:
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Customer acquisition cost (CAC). This metric shows how much you’re spending to acquire each new customer. Even strong customer growth can be unprofitable if your CAC is too high.
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Customer lifetime value (CLV). CLV measures the total revenue an average customer generates over their relationship with your business. It helps you learn directly about the customers you’re gaining and retaining, and whether their spending merits your CAC.
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Repeat purchase rate (RPR). Your RPR is the percentage of customers who have placed a second or subsequent order within a defined time frame. It’s useful for distinguishing between one-time growth spikes and sustainable long-term loyalty.
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Customer retention rate. This retention metric describes the percentage of customers your business keeps over a defined period, excluding any new customers acquired during that period. Since high growth can be offset by high churn, retaining loyal customers helps you keep growing overall. Unlike RPR, customer retention rate specifically focuses on the duration and stability of the customer relationship.
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Conversion rate. Calculating your conversion rate helps you determine whether your site traffic provides higher-quality leads over time. It can show whether your customer growth comes from better marketing.
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Average order value (AOV). AOV reveals how much customers spend per purchase, providing insight into buying behavior and whether newly acquired customers are as profitable as existing ones.
Proven strategies for customer growth
- Invest in product quality
- Consider product-led growth
- Empower your customer success team
- Leverage segmentation
- Collect and apply customer feedback
- Make data-driven improvements
- Encourage referrals
Growing your client base requires a mix of marketing innovation to reach new clients combined with a better service and product experience to retain existing ones. Cultivating happy customers, both new and loyal, can increase the total number of people supporting your business.
1. Invest in product quality
Want to cultivate customers who are far more likely to return, refer friends, and leave positive reviews? Having a quality product or service is the first step. Whether that means upgrading the raw materials or paying more for top engineering talent, a product-led approach can help you win customers based on the value of your product.
Use Shopify Analytics to learn which items deliver the highest percentage of repeat buyers and see where product improvement opportunities exist.
2. Consider product-led growth
A product-led growth strategy is one where you encourage initial adoption of your product, so customers can see the benefits for themselves. Tactics like free samples, free trials of subscriptions, and implementing a freemium business model allow potential customers to become familiar with your offerings before making a purchase.
3. Empower your customer success team
Excellent customer service keeps customers happy and reduces churn. Give your customer success (CS) team the tools they need to ensure satisfaction. That might mean empowering them to offer discounts, free replacement products, or free return shipping. It could also mean investing in customer support software, like Zendesk or Freshdesk, to centralize communications across multiple channels and automate routine tasks.
4. Leverage segmentation
Instead of blasting the same message to your entire email subscriber list, use customer segmentation to create tailored campaigns. Shopify’s segmentation tools divide your audience by behavior, spend level, life cycle stage, or engagement patterns, making it easier to customize your marketing to keep customers coming back.
For example, you might send three different versions of a marketing email to your new, high-value, and at-risk customers, personalizing messaging and offers so they’re more likely to appeal to that segment.
5. Collect and apply customer feedback
Customer feedback is an essential part of product development and improving customer satisfaction. It can also help you identify risk in the early stages of a product launch, guide you in refining your product quality, help you reduce friction in the customer journey, and improve the overall service experience.
Use surveys, reviews, and customer support interactions to learn your customers’ needs, creating a feedback loop where input guides your next steps. You want your customer support teams to understand what users expect, where they feel satisfied, and where you can adapt to deliver an exceptional experience.
6. Make data-driven improvements
Shopify Analytics can track important indicators like retention, repurchase rate, and CLV by segment. These insights help you pinpoint which of your customer growth strategies work, which accounts are growing, and where to focus improvement efforts to support long-term customer expansion.
7. Encourage referrals
Satisfied customers are often the most powerful acquisition engine. Offering simple referral incentives like discounts, loyalty points, or early access benefits can turn existing customers into brand advocates.
Surveys show that word of mouth is the most common source of brand discovery among US internet users. This means that referred customers often convert at higher rates. Focusing on word-of-mouth marketing can compound your growth percentage without the high cost of traditional paid acquisition channels.
Customer growth FAQ
What is the meaning of customer growth?
Customer growth rate refers to an increase in the total number of customers a business gains over a specific period.
How do you grow your customers?
Grow your customer base by consistently attracting new buyers and retaining existing ones through targeted marketing, strong product value, and a great customer experience.
Why is customer growth important?
Customer growth indicates how well you attract, convert, and retain customers. Businesses that can achieve and sustain customer growth are more likely to endure throughout changing economic climates because they have a larger customer pool.
