Growth accounting breaks down the company’s customer and revenue growth into its component parts.
With regards to customer growth, this includes new users, churned users, and user who churned but came back – referred to as resurrected users.
With regards to revenue, growth accounting includes revenue from new customers, expansion revenue from existing customers paying more, resurrected revenue from customers who churned but came back, revenue lost from churned customers, and contraction of revenue from existing customers paying less.
As an example, a company’s revenue growth rate of 0.5% = 7.2% new customer revenue + 1.8% resurrected revenue + 1% expansion revenue – 0.7% contraction of revenue due to customers paying less – 8.8% revenue lost due to customers churning.
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