Sales growth is the most critical measure of a company’s success. It indicates whether a business is growing or declining. It also reflects whether the company is on track to hit its financial targets.

Sales growth is calculated by comparing current sales with previous years’ sales and can be expressed as a percentage or in absolute terms, such as dollars or units. 

It is a crucial sales KPI for businesses to gauge their overall financial performance and evaluate their future potential. It’s also an essential component of any company’s marketing strategy as it serves as a signpost for how well your business is doing. 

There are many different ways to calculate sales growth. But the most common method is to calculate the average annual sales growth rate (ASGR).

This article explains how to calculate sales growth and strategies to increase the sales growth rates for B2B and B2C businesses.

Sales growth formula

This method uses simple multiplication to calculate the amount of growth between two periods.

The formula for calculating sales growth looks like this:

sales growth rate formula

For example, if your company generated $100 million in revenue this year, and $90 million last year, its sales growth rate would be 10%.

The positive sales growth rate indicates that your sales and revenues are growing. In contrast, a negative value shows that your sales and revenues are declining. It is also an alarm to take corrective measures before it’s too late.

You can also use this equation to compare two years or more. All you need to do is replace “current year” with “previous years” in both places in the equation.

Also, you may want to look at the sales growth rate month over month or quarter over quarter. In this case, use the above formula by changing the year to month or quarter.

The sales growth rate is one of the most important metrics that investors and analysts look at when evaluating a company’s performance. It indicates how much money a business is making and how much more it could make if given more time.

You can also use this online sales growth calculator to quickly check the state of your sales.

Online sales growth calculator


Enter Sales in the current period ($):
Enter Sales in the previous period ($) :

Your Sales Growth Rate is: %

function calculate_Sales_Growth() { let S3 = parseInt(document.getElementById(“S1”).value); let S4 = parseInt(document.getElementById(“S2”).value); let result = (S3 – S4)/S4*100; document.getElementById(“S5”).innerHTML = result; }

An extension to the generic sales growth formula is the average annual sales growth rate (ASGR) calculation.

The average annual sales growth rate (ASGR) measures how much revenue increases each year over an extended period — typically five years — compared with the prior year’s total.

Here’s the formula to calculate ASGR.

Average annual sales growth rate formula

Let’s take an example to understand this.

Consider the following table that illustrates the revenue earned and sales growth achieved.

YearRevenue ($)Growth Rate
201750,00,000 
2018100,00,000100%
2019200,00,000100%
2020150,00,000-25%
2021250,00,00067%

For the above data, the ASGR would be:

(100+100-25+67)/4 = 60.5%

The average annual sales growth rate, also known as ARG, is essential for any business. It measures how fast a company’s revenue grows and provides valuable insight into its financial performance.

Now that we know how to calculate sales growth, let’s look at practical strategies to improve this metric. But since the sales growth depends a lot on your target segment and the industry you operate in, we’ve included strategies for both B2B and B2C sectors.

How to track sales growth

Keeping a tab on your sales growth metric is essential for a sustainable growth. However, it may not be as easy as it may seem.

You may have different teams operating across different regions. Collecting sales numbers from them, validating them, etc., becomes tedious. Also, because your strategy will depend on the growth you aim and the historical data, it is crucial to monitor this metric closely.

A simple solution to this is Sales CRM software.

For example, LeadSquared. It lets you track revenue and sales based on:

  • Region
  • Product
  • Sales owner
  • Lead source

And many more criteria. It makes it easier for you to look into the past trends and prepare an expansion plan based on the actual sales insights.

revenue report - feature image

Another question people generally have is what’s the good sales growth rate.

To this, we would say—it depends on the company size, market and competition, and the growth you want to achieve in the said period.

Let’s deal with these aspects with examples.

  • Company size: Smaller companies may experience a higher growth rate compared to larger ones. For example, a company increasing sales from $100 million to $120 million, experiences a 20% sales growth rate. In contrast, a company growing sales from $1 million to $2 million shows a 100% growth rate.
  • Market and competition: Sales growth should be compared to the companies operating in the same region and catering to the same audience. For instance, comparing the sales growth of B2B and B2C companies doesn’t make sense. 
  • Your sales goals: While you may aim to achieve a better growth rate than your competitors, it actually depends on your business goals. For instance, you may want to achieve a 200% sales growth rate in the APAC region. And accordingly, you’d plan your strategy. 

However, it’s important to achieve incremental growth for your brand’s success in the long run. 

Sales growth strategies for B2B

1. Create highly effective sales enablement programs

First things first: You need to understand what motivates your internal sales team and create a plan that aligns with their underlying needs. 

It won’t work if you try to push them into something they don’t truly want or need (and yes, they may not even know what they want). Instead, you should start by asking the right questions to uncover what matters most to each member of your team.

For example, you might ask them how often they would like to receive helpful tips. How often they’d like their manager to check in with them about their progress. Or how much time they’d like to spend on training before being cut loose on their own.

Sales enablement programs are designed to help salespeople perform better in their roles. They’re often made up of learning tools and other resources, including coaching and mentoring programs. The goal is to equip your team with everything they need to succeed at their jobs — including the technology, tools, and knowledge required to meet your business goals.

The outcome is equally rewarding.

For instance, we asked sales professionals from different business verticals about the benefits they gain from sales enablement. 32% of them said they saw higher sales quota attainment rates, and 15% said higher win rates.

Benefits of sales enablement

2. Look for expansion closer to the main company office

Many companies choose to expand into new territories because they think doing so will help them make more money. But this isn’t always true. Especially if the primary focus is on selling rather than providing services.

However, it may not hold true for SaaS or digital services companies. Still, you may have to face the cultural gap if you plan to expand across geos.

Therefore, expanding by opening new branches closer to your main office will help increase efficiency in operations and reduce the costs of running multiple offices across different locations.

3. Define your ideal customer profile

The first step in any successful B2B marketing strategy is understanding who you’re targeting. In other words, who is your ideal customer? 

You can’t sell to anyone. You have to sell to someone interested in what you’re selling and have the budget to buy it. So, before you start creating content or thinking about social media strategies, make sure that you know exactly who your target audience is.

Who exactly are you trying to reach? What is their background? What do they care about? What motivates them? What are their pain points and desires? How can you get them? Defining your target market will help you develop strategies that resonate with your target audience and drive more sales.

This will guide you on what they want from you. It also allows you to tailor your messaging, content and offers to the needs of each persona.

[Read more about how to create your first customer profile]

4. Use case studies to showcase successful business collaborations

Case studies help you showcase your expertise and why they should do business with you over anyone else in your industry.

These are also one of the most popular media used within content marketing strategies.

Statistics - Types of media used in content marketing

Case studies are especially helpful when targeting new markets or verticals. They’re evidence of your ability to work with other businesses in those industries and reference points for future clients who might be skeptical about getting into the collaboration.

Note that case studies need not be the typical documents. You can get creative with them.

For instance, you can produce a video case study. Video is more engaging than text and helps your audience connect with the subject matter. It’s also great for showing off the process of working with a client and the results that come from it.

Showing how well-known companies have used your solutions gives prospective customers more confidence in the results they can achieve with you.

Pro tip: Share your case studies in your email signature. This way, you’ll be able to share it with hundreds of people with whom you converse daily.

5. Focus on Account-based Selling

Selling to larger accounts can be challenging, but it’s also where many companies see the most revenue potential. To gain a foothold in these accounts, you’ll need to focus on one or more key decision-makers.

The key to account-based selling is identifying the right person or team within each account that is responsible for making purchasing decisions. You can do this by using a variety of tools and techniques, including:

  • Analyzing purchase history data to identify repeat customers and prospects with similar buying patterns
  • Using social media monitoring tools to identify key influencers within an account
  • Employing predictive analytics software to analyze past sales performance and other data so you can predict which prospects are more likely to buy from you in the future

The goal is to have each team member working closely with a small number of essential buyers at each account. This approach can help you build strong relationships with key decision-makers and influencers and gain more reliable insight into what it takes to win their business.

So, these are the measures you can take to improve your sales growth rate if you are in a B2B business.

If you target B2C customers, read on to the next section for some new ideas for sales growth.

Sales growth strategies for B2C

1. Invest in membership programs

Membership programs are a great way to get customers to pay you repeatedly. This will help you create a long-term relationship with your customers, leading to better retention rates and higher lifetime values.

The subscription model is one of the most effective ways to grow your business. It’s a highly flexible, cost-effective model that allows you to focus on the value you provide instead of thinking about how much money you’re making off each customer.

Subscription models are great for businesses because they allow people to pay regularly for something they use. For example, someone who uses Netflix or Spotify every day will pay $10 per month, which is much more than what they usually pay for a single movie ticket or album download.

This same principle applies to other types of businesses, whether it’s software, SaaS products, or even professional services like coaching and consulting services. The more customers rely on your product or service, the more likely they’ll be willing to pay for it regularly.

2. Direct selling can be pivotal

Direct selling is the most common approach, which involves directly communicating with potential customers through word-of-mouth or other marketing channels. 

For example, door-to-door sales in real estate or insurance can be effective for interacting with people. But this strategy can be expensive and time-consuming for companies and agents themselves.

It can be an effective strategy for B2C (business-to-consumer) businesses that sell a physical product or service. It’s also an excellent way for new companies to establish themselves before expanding into other marketing areas.

Direct selling is a critical part of their marketing strategy for many businesses. Direct selling involves face-to-face interactions with customers and prospects, usually at trade shows and conferences. 

These interactions allow you to build relationships with new customers, enhance your brand image, and generate sales-qualified leads by asking questions about their needs related to your products or services. In a way, it does what a discovery call would do in the case of inside sales.

3. Onboard influencers & target social media for higher sales

Social media has become an important channel for businesses to connect with customers and drive sales. Companies need to create engaging content that resonates with their audience on social platforms such as Facebook, Instagram, Twitter, YouTube, and LinkedIn.

Influencers can help reach more people by sharing their posts on their profiles or even within custom audiences they’ve built over time.

Retail social commerce sales - United States

Source: Social Commerce trends

They also significantly impact search engine rankings (SERPs). So, it’s essential to work with influencers who specialize in SEO-friendly content creation (like blogging) instead of just posting about your products on their channels without any context.

To grow your business beyond its current customer base, try co-creating content with other brands that align with your sales goals. For example, if you own an apparel company, partner up with another brand that sells clothes to create an ad campaign or even produce a clothing brand presence.

Find new ways to sell old products by mining customer needs and preferences data. Then use that insight to improve sales pitches and close more deals. Consider product collaboration. Partnering with other companies can help you reach new audiences and get exposure for your products or services in new markets.

Create an email drip campaign that teaches customers about your product and what it does. However, make sure that you don’t push this off as a dull marketing tool. Make it fun and engaging! 

Another tip.

Use Sales CRM software to create automated email campaigns based on your lead segment and the stage they’re in. 

Sales CRM like LeadSquared allows you to nurture leads effectively through email, SMS, and WhatsApp communication. The communication can be triggered basis several activities like a page visited on a website, filling an inquiry form, clicking an ad, etc.

marketing automation - omni channel engagement

4. Partner with marketplaces or explore channel sales

Your products may not be available in all locations due to geographical restrictions or shipping costs and delivery time. Partnering with marketplaces like Amazon or eBay will allow you to reach a larger audience and sell more products online than you could alone as an individual merchant site or e-commerce store owner. You can also go through this Gorilla ROI blog to learn more about what to sell on Amazon and which tools to use for niche product research and analysis

Partnership with marketplaces is a convenient way to reach more customers without making additional investments in infrastructure or marketing campaigns. Moreover, it helps you achieve sales growth without having to manage multiple distributors. 

The growth rate of these marketplaces has been phenomenal so far and shows no signs of slowing down anytime soon.

Next Steps

Sales growth is not a one-size-fits-all formula. The road to sales growth must be carefully planned. The journey will undoubtedly be more rewarding when you track the growth metrics closely.

This article aims to briefly outline the sales growth strategies to focus on in the year 2023 so that every organization can be successful in its own right. I hope you found an answer to your growth plan.

If you’re looking for a tool to improve your sales growth rate, try LeadSquared.

It has helped brands across several verticals like Lending, Fintech, Edtech, Insurance, Education, Real Estate, and more regiment their sales processes and achieve multifold growth. Book a demo to explore the complete functionalities of LeadSquared.