What is Net New Business?
Net New Business, also called Net NNB provides a measure of how many new customers are brought into the company compared to old customers who leave.
This is especially useful when looking at accounting-related data and financials since this metric will show you whether the company has been making a profit from new clients rather than from client retention.
Considering that every business needs a certain number of expenses and several hours going into promoting their brand, it’s important for these companies to assess whether or not they're getting what they need out of these investments with this specific measurement being analyzed.
How is NNB Used?
NNB allows businesses to look internally and see if their efforts have paid off by introducing external strategies like online promotion--in order for any promo techniques or advertising campaigns to be successful, it needs to produce a return on investment.
How to Calculate NNB?
Net New Business is the difference between revenue from new customers (gross) and the net loss of old customers. The formula to calculate Net New Business looks like this:
NET NEW BUSINESS = Gross Sales - Gross Losses
If you want to know how effective your marketing is, it’s important to calculate Net New Business.
This metric will tell you the percentage of conversion from new customers that are not returning versus old ones who have returned and made a purchase again.
The higher this number is, the better off you are with your marketing strategy and ability to drive sales through digital channels.