Segment Growth Rate
What is Segment Growth Rate?
This metric tracks the rate of growth in a specific segment over a defined period. You can measure growth in:
- Revenue: ARR or MRR per segment
- Customer count: Number of accounts or logos
- Pipeline: Value or volume of open opportunities
Formula (for revenue):
Segment Growth Rate = ((Current Period Revenue − Previous Period Revenue) ÷ Previous Period Revenue) × 100
Example: If ARR from mid-market customers grew from $1.2M in Q1 to $1.5M in Q2, the Segment Growth Rate is 25%.
You can use the same structure to calculate growth in pipeline or customer count per segment.
Why It Matters in B2B SaaS
- It shows where demand is accelerating. Helpful for GTM resourcing and planning
- It helps allocate sales and marketing spend. Invest where growth justifies the effort
- It supports territory and quota design. Fast-growing segments may warrant additional headcount or adjusted targets
- It feeds strategic planning. Identifies when to double down on a segment or shift messaging and positioning
- It enables proactive segmentation. Helps RevOps detect trends before they show up in lagging indicators like revenue
How to Measure Segment Growth Rate
Step 1: Define your customer segments clearly
Step 2: Choose the growth metric (ARR, pipeline, customer count)
Step 3: Compare the current period against a previous comparable period (month, quarter, year)
Step 4: Apply the growth rate formula
Step 5: Segment further by:
- Region or territory
- Deal type (new vs. expansion)
- Product line or pricing tier
- Acquisition channel (inbound vs. outbound)
Best Practices
- Use consistent definitions. Avoid changing how you classify segments between periods
- Normalize for churn. Net growth (with churn deducted) gives a more accurate picture
- Watch for pipeline inflation. Growth in pipeline without improved win rate or revenue may not be meaningful
- Benchmark across segments. Growth rate is relative—one segment growing at 10% may be outperforming another at 20%, depending on market maturity
- Pair with Win Rate by Segment. High growth + high win rate = ideal segment to prioritize
Segment Growth Rate is a strategic compass for sales and marketing teams. It keeps you focused on where your product is resonating—and where your GTM efforts are gaining traction. In a fast-moving SaaS market, knowing which segments are heating up gives you an edge in allocating time, talent, and budget.