Year-over-Year Growth (YoY Growth)
Definition
Year-over-Year Growth measures the percentage change in a metric (like revenue, profit, traffic, or customer base) from the same period in the previous year.
It is used to evaluate long-term trends and business performance across consistent timeframes.
Good or Bad?
Good?
- Positive YoY growth indicates the business is expanding or improving.
- Useful for assessing the effectiveness of marketing or operational strategies over time.
Bad?
- Negative YoY growth may signal stagnation or a decline in performance.
- Can be misleading if external factors (like seasonality or market disruption) are not considered.
Why does it matter?
- YoY Growth helps you understand whether your business is heading in the right direction.
- It removes the noise of short-term fluctuations and highlights sustainable progress.
- It’s a preferred metric by stakeholders, investors, and internal teams for strategic planning.
Common Mistakes
- Comparing months that are not seasonally equivalent (e.g., comparing December to January).
- Ignoring external influences like market conditions or holidays.
- Using inconsistent data sources or definitions from year to year.
How to Improve It?
- Track YoY Growth across multiple KPIs: revenue, orders, CAC, repeat purchase rate, etc.
- Use rolling 12-month averages to smooth out volatility.
- Analyze drivers behind growth or decline to take informed actions.
Recommended Plugin
Use eCommerce analytics plugins like Metorik, WooCommerce Google Analytics Integration, or Shopify Analytics to track YoY trends across products, traffic, and sales.
Real-World Example
An online fashion store reports $400,000 in Q1 revenue this year, compared to $300,000 in Q1 last year. That’s a 33.3% YoY Growth, indicating strong demand and effective promotions.
Related Terms
- Month-over-Month (MoM) Growth
- Revenue Growth Rate
- Customer Lifetime Value
- Seasonality Adjusted Metrics
FAQs
What is a good YoY Growth rate for eCommerce?
This depends on your niche, but 15–30% growth is considered healthy for growing stores.
Why compare year-over-year instead of month-over-month?
YoY provides a clearer picture by comparing the same seasonal conditions, helping avoid misleading short-term changes.
Can I use YoY Growth to evaluate marketing performance?
Yes. Compare traffic, conversion rates, and revenue from the same campaign period last year.
