GM section: incremental growth

Awesome, we've created the base for our growth model. We'll now calculate the impact on growth on changing different levers.

1. Identify the north star metric for your product

2. Build a mathematical growth equation to achieve the north star

3. Collate the current metrics and establish a nuke scenario

4. Calculate the incremental growth based on your growth model

5. Learn how to present your growth model in a structured manner

Calculate the incremental growth

Incremental growth, refers to the additional growth that is achieved by making improvements in various aspects of the product or service. These aspects include onboarding, retention, engagement, and monetisation.

This can be calculated by comparing the current performance metrics to the target performance metrics after implementing specific changes or improvements*.* Calculating this will give you an idea of which broad lever you will need to double based on what has the maximum impact on you goal.

Here are a few examples →

📱 Onboarding:

Current onboarding rate: The percentage of new users successfully onboarded with the current process.
Target onboarding rate: The improved percentage of new users expected to be successfully onboarded after enhancements.
Incremental growth: The difference in the number of users successfully onboarded between the current and target rates, multiplied by the total number of new users.

📈 Retention:

Current retention rate: The percentage of users retained over a specified period (e.g., M6, M12).
Target retention rate: The improved percentage of users expected to be retained after implementing retention strategies.
Incremental growth: The difference in the number of retained users between the current and target rates, multiplied by the total number of existing users.

This template will help you understand how you can build this on a sheet and do your calculations.

✅ Template for SaaS

✅ Template for e-commerce

✅ Template for advanced growth model

✅ Simplified template

Note that the formulas and input data in this sheet are specific to when revenue growth is the NSM.

Identify the core lever

Now, you need to pinpoint the primary levers that have the maximum impact on your NSM.

For example →

Based on your calculations in the incremental growth stage, you concluded that monetisation is the has the maximum impact on your growth objective. Now that you know this, you can prioritise sub levers within monetisation like Free to Paid conversions, increasing CPM, redesigning pricing page, and introducing differential pricing.

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