Use two modes to see how different growth and churn factors affect the overall growth in units.
Related Terms
Model 1
Model 2
%
%
Notes:
- The straight line model means unit growth is the same month-to-month. As the results show the percentage growth month-to-month is diminishing so is not an ideal scenario as your business should generally grow month-to-month not just year-to-year.
- The constant percentage model calculates and applies the same month to month growth which means in actual terms the number of new units sold each month is increasing.
- Churn is applied based on the annual percentage / 12 months and is calculated based on the existing units at the start of each month.
- One of the difficulties with modelling unit growth is when the numbers are low. The calculations assume you can only sell whole numbers of units which is why for low numbers some of the percentages jump up and down a little.