Terms

Net New Business

Net new business is revenue generated from acquiring entirely new customers or by selling new products and services to an existing client base. This is distinct from recurring revenue from current contracts, as it focuses on creating completely new income streams that drive growth. Ultimately, it's a critical measure of a company's ability to expand its market presence and ensure its long-term health.

Importance of Net New Business

Net new business is the lifeblood of any company, serving as the primary driver for revenue growth. It's essential for offsetting customer churn and ensuring long-term stability. By consistently acquiring new clients, a business can increase its market share, enhance its reputation, and maintain a competitive edge in the industry.

Strategies to Increase Net New Business

Generating net new business requires a multi-pronged approach that combines acquiring new customers with expanding existing relationships. Effective strategies focus on targeted outreach and creating new value for both new and current clients.

  • Prospecting: Actively seeking out and engaging potential new clients who have not done business with you before.
  • Cross-selling: Introducing new products or services to your existing customer base to create new revenue streams.
  • Marketing: Utilizing digital marketing and targeted campaigns to attract and engage buyers actively looking for solutions.
  • Referrals: Leveraging satisfied current clients to generate introductions and warm leads for new business opportunities.

Net New Business vs. Gross New Business

While both metrics measure sales success, they offer different perspectives on a company's growth trajectory.

  • Net New Business: This focuses on revenue from entirely new customers or new product lines with existing clients. It is a true indicator of growth and market expansion, crucial for long-term stability. Enterprises and mid-market companies prioritize this for sustainable growth and offsetting churn, though it can be more costly to acquire.
  • Gross New Business: This represents the total value of all new contracts, including renewals and upsells with existing customers. It reflects overall sales activity and momentum but can mask high customer churn. Enterprises might track this to gauge sales volume, while mid-market firms often find net new business a more critical health indicator.

Challenges in Acquiring Net New Business

Internal structures can create significant roadblocks. Compensation plans may not reward prospecting, leading to sales team complacency and a lack of accountability for generating new opportunities. This focus on existing accounts can dull the skills needed to win new clients.

Market dynamics also present major hurdles. High customer churn can easily outpace new client acquisition, while over-reliance on a few key accounts creates vulnerability. Meanwhile, competitors are always targeting your top clients, making growth a constant challenge.

Measuring Success in Net New Business

Measuring net new business success requires tracking specific KPIs that reveal true growth beyond overall revenue. These metrics help gauge the effectiveness of your sales and marketing efforts in expanding your customer base. By monitoring these key indicators, you can ensure your acquisition strategies are outpacing customer churn and contributing to long-term stability.

  • Acquisition Rate: The pace at which you gain new customers or "new logos."
  • Revenue Growth: The increase in revenue generated from new clients and new product sales to existing ones.
  • Churn Rate: The percentage of customers lost, which new business must outpace for sustainable growth.

Frequently Asked Questions about Net New Business

How does net new business differ from upselling?

Net new business involves selling entirely new products or services to existing clients. Upselling focuses on increasing revenue from a current product by upgrading a plan or adding seats, which is typically considered expansion revenue, not net new.

Is net new business only about acquiring new logos?

Not exclusively. While acquiring new customers ("new logos") is a primary component, net new business also includes revenue from cross-selling entirely new products or services to your existing client base. It's about creating fundamentally new revenue streams.

Why prioritize net new business if it's more expensive to acquire?

While costlier, it's essential for long-term stability and market expansion. It offsets inevitable customer churn and reduces dependency on a few large accounts. This focus prevents stagnation and mitigates risk over time, ensuring sustainable growth.

Other terms

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Use Case

A use case is a detailed description of how a user interacts with a system to achieve a specific goal, outlining the steps from start to finish.

Use Case

Firmographics

Firmographics are descriptive attributes of organizations, used to segment companies by characteristics like industry, size, and location.

Firmographics

Account-Based Marketing

Account-Based Marketing (ABM) is a focused B2B strategy where marketing and sales collaborate to target and convert high-value accounts.

Account-Based Marketing

Service Level Agreement

A Service Level Agreement (SLA) is a contract defining the level of service between a provider and a client, including metrics and penalties.

Service Level Agreement

Sales Cycle

A sales cycle is the series of steps a company takes to close a new customer. It starts with prospecting and ends with a signed deal.

Sales Cycle

Outbound Leads

Outbound leads are potential customers a business proactively contacts through outreach like cold calls, emails, or social media.

Outbound Leads

Outbound Sales

Outbound sales is when reps proactively contact potential customers through cold calls or emails to generate leads and build a sales pipeline.

Outbound Sales

Sales Enablement Platform

A sales enablement platform centralizes content, training, and analytics to help sales teams engage buyers and effectively close deals.

Sales Enablement Platform

Business Intelligence

Learn about business intelligence, including key components of business intelligence, the role of BI in decision making, business intelligence tools and techniques.

Business Intelligence

Revenue Operations (RevOps)

Revenue Operations (RevOps) is a business function that aligns a company's sales, marketing, and customer service teams to drive predictable revenue.

Revenue Operations (RevOps)

Statement of Work

A Statement of Work (SoW) is a document that outlines a project's scope, deliverables, and timeline. It acts as a contract between parties.

Statement of Work

Forward Revenue

Forward revenue is the total value of all active, committed contracts that are expected to be recognized as revenue in the future.

Forward Revenue

Load Balancing

Load balancing is the practice of distributing incoming network traffic across a group of backend servers, ensuring no single server is overworked.

Load Balancing

Supply Chain Management

Supply Chain Management oversees the entire production flow of a good or service, from raw materials to final delivery to the consumer.

Supply Chain Management

Sales Intelligence Platform

A sales intelligence platform is software that provides sales teams with data and insights about prospects to help them sell more effectively.

Sales Intelligence Platform

Application Performance Management

Application Performance Management (APM) monitors and manages an application's performance, availability, and the experience of its end-users.

Application Performance Management

Data Management Platform

A Data Management Platform (DMP) is a software that collects and organizes audience data from various sources for targeted marketing efforts.

Data Management Platform

Technographics

Technographics is data that outlines a company’s technology stack, helping B2B teams identify prospects based on the software and hardware they use.

Technographics

Account-Based Advertising

Account-based advertising is a hyper-focused B2B strategy that targets key accounts with personalized ads across multiple channels.

Account-Based Advertising

Sales Coach

A sales coach is a mentor who trains and guides sales reps to enhance their skills, boost performance, and ultimately close more deals effectively.

Sales Coach

Product Recommendations

Product recommendations are a marketing strategy that uses customer data to suggest relevant products, boosting sales and customer engagement.

Product Recommendations

Edge Locations

Edge locations are globally distributed data centers that cache content close to users, reducing latency and delivering web content much faster.

Edge Locations

Clustering

Clustering is the technique of grouping similar items. In sales, it means segmenting leads by shared traits to better personalize outreach.

Clustering

B2B Data Solutions

Learn about B2B data solutions, including unlocking the power of B2B data, & key components of effective B2B data solutions.

B2B Data Solutions

Business Continuity

Learn about business continuity, including understanding key components, steps to ensure continuity, common challenges, & best practices.

Business Continuity

Ad-hoc Reporting

Ad-hoc reporting is the creation of one-off reports to answer specific business questions as they arise, providing instant, targeted insights.

Ad-hoc Reporting

Value Gap

A value gap is the difference between the value a customer expects from a product and the actual value they receive, often leading to churn.

Value Gap

Zero-Based Budgeting (ZBB)

Zero-based budgeting (ZBB) is a method where all expenses are re-evaluated and must be justified from scratch for each new budget period.

Zero-Based Budgeting (ZBB)

B2B Sales

Learn about B2B sales, including key strategies for B2B success, types of B2B sales models, & B2B vs. B2C sales: understanding the differences.

B2B Sales

SEM

Search Engine Marketing (SEM) is a digital marketing strategy that uses paid tactics to increase a website's visibility in search engine results.

SEM

Git

Git is a distributed version control system that tracks changes in code, allowing developers to collaborate and manage project history effectively.

Git

Load Testing

Load testing is a type of performance testing that determines how a system behaves under both normal and anticipated peak load conditions.

Load Testing

Docker

Docker is a tool that packages applications and their dependencies into isolated environments called containers for easy deployment and scaling.

Docker

Day Sales Outstanding

Day Sales Outstanding (DSO) is a financial ratio that shows the average number of days it takes for a company to receive payment for a sale.

Day Sales Outstanding

Field Sales Rep

A field sales representative, or outside sales rep, travels to meet prospects in person, selling products or services directly within their territory.

Field Sales Rep

Customer Segmentation

Customer segmentation is dividing customers into groups based on shared traits. This allows for more targeted and effective marketing efforts.

Customer Segmentation

Platform as a Service

Platform as a Service (PaaS) is a cloud model where a provider delivers a platform for users to develop, run, and manage applications online.

Platform as a Service

Sales Qualified Lead

A Sales Qualified Lead (SQL) is a prospect vetted by marketing and sales, deemed ready for a direct sales pitch after showing intent to buy.

Sales Qualified Lead

Regression Analysis

Regression analysis is a statistical method for estimating the relationships between a dependent variable and one or more independent variables.

Regression Analysis

Account Match Rate

Account match rate is the percentage of target accounts successfully identified and matched against a specific database or data provider.

Account Match Rate

User Experience

User Experience (UX) refers to a person's overall feelings and perceptions while interacting with a product, system, or service.

User Experience

Revenue Operations KPIs

Revenue Operations KPIs are quantifiable metrics that track the performance, efficiency, and health of a company's revenue-generating engine.

Revenue Operations KPIs

Accounts Payable

Accounts Payable (AP) is the money a company owes its suppliers for goods or services bought on credit. It's listed as a current liability.

Accounts Payable

Marketing Qualified Lead (MQL)

A Marketing Qualified Lead (MQL) is a prospect who has shown interest based on marketing efforts but isn't yet ready for a sales conversation.

Marketing Qualified Lead (MQL)

SPIN Selling

SPIN selling is a sales technique using a sequence of questions—Situation, Problem, Implication, Need-Payoff—to uncover a buyer's needs.

SPIN Selling

Hard Sell

A hard sell is an aggressive sales technique that uses high-pressure tactics to push a customer into making an immediate purchase decision.

Hard Sell

Mid-Market

Mid-market companies are businesses larger than small businesses but smaller than large enterprises, often defined by revenue or employee size.

Mid-Market

GPCTBA/C&I

GPCTBA/C&I is a sales qualification framework for understanding a prospect's goals, plans, challenges, timeline, budget, and authority.

GPCTBA/C&I

Compounded Annual Growth Rate

Compounded Annual Growth Rate (CAGR) measures the mean annual growth of an investment over a specified period of time longer than one year.

Compounded Annual Growth Rate

Demand Forecasting

Demand forecasting is the process of predicting future customer demand for a product or service based on historical data and market trends.

Demand Forecasting

Discount Strategies

Discount strategies are pricing tactics used to attract customers and boost sales by temporarily reducing the price of products or services.

Discount Strategies

Buying Process

The buying process is the journey a customer takes from first realizing a need to making a final purchase decision and evaluating it afterward.

Buying Process

Email Engagement

Email engagement measures how your audience interacts with your emails. It includes key actions like opens, clicks, replies, and forwards.

Email Engagement

Predictive Lead Generation

Predictive lead generation uses data and AI to find prospects most likely to buy, helping teams focus their efforts on high-value leads.

Predictive Lead Generation

Customer Loyalty

Customer loyalty is a customer’s devotion to a brand, shown by their repeat purchases and engagement, driven by positive experiences and trust.

Customer Loyalty

Lead Routing

Lead routing is the automated process of distributing incoming leads to the right sales reps based on predefined criteria.

Lead Routing

Pipeline Management

Pipeline management is the process of tracking and managing potential customers as they move through the different stages of your sales process.

Pipeline Management

Scalability

Scalability is a company's ability to handle increased workloads or market demands without a drop in performance or a spike in costs.

Scalability

Stress Testing

Stress testing is a type of software testing that determines a system's robustness by pushing it beyond its normal operational capacity.

Stress Testing

Target Account List

A Target Account List (TAL) is a focused list of high-value companies that a business specifically aims to convert into customers.

Target Account List

Private Labeling

Private labeling is when a company rebrands a product made by a third-party manufacturer and sells it as their own.

Private Labeling

Smile and Dial

"Smile and dial" is a high-volume sales tactic where reps make numerous cold calls from a list, often with little to no prior research.

Smile and Dial

Product Qualified Lead

A Product Qualified Lead (PQL) is a user who has experienced a product's value, signaling a strong potential to convert to a paid customer.

Product Qualified Lead

Google Analytics

Google Analytics is a web analytics service that tracks and reports website traffic, offering insights into user behavior and marketing effectiveness.

Google Analytics

Economic Order Quantity

Economic Order Quantity (EOQ) is the ideal order quantity a company should purchase to minimize its total inventory-related costs.

Economic Order Quantity

Purchase Buying Stage

The purchase stage is when a buyer has decided on a solution and is ready to buy. They're comparing vendors to make a final choice.

Purchase Buying Stage

CI/CD

CI/CD, or Continuous Integration/Continuous Delivery, automates software builds, tests, and deployments for faster, more reliable releases.

CI/CD

Closed Won

Closed Won is a CRM status for a sales deal that has been successfully concluded, resulting in a signed contract and a new customer.

Closed Won

Customer Churn Rate

Customer churn rate is the percentage of subscribers or customers who cancel their service with a company during a given time frame.

Customer Churn Rate

Lead Enrichment Tools

Lead enrichment tools are platforms that automatically add missing data to your leads, like contact info, firmographics, and buying signals.

Lead Enrichment Tools

No Cold Calls

No Cold Calls is a sales strategy that replaces unsolicited calls with warm outreach to prospects who have already demonstrated interest.

No Cold Calls

Mobile Compatibility

Mobile compatibility ensures your site or app works flawlessly on mobile devices, like smartphones and tablets, for a seamless user experience.

Mobile Compatibility

On-premise CRM

An on-premise CRM is a system hosted on a company's own servers, offering complete control over data, security, and system maintenance.

On-premise CRM

Sales and Marketing Analytics

Sales and marketing analytics involves measuring and analyzing performance data to maximize effectiveness and optimize return on investment (ROI).

Sales and Marketing Analytics

Reverse Logistics

Reverse logistics is the process for goods moving from the customer back to the seller, covering returns, repairs, recycling, and disposal.

Reverse Logistics

Sales Manager

A Sales Manager leads a sales team, setting goals, analyzing performance, and developing strategies to drive revenue and meet targets.

Sales Manager

Sales Funnel

A sales funnel is a model illustrating the customer's journey from initial awareness to the final purchase, narrowing down leads at each stage.

Sales Funnel

Sales Operations Analytics

Sales operations analytics is the practice of analyzing sales data to improve the efficiency and effectiveness of the entire sales process.

Sales Operations Analytics

ABM Orchestration

ABM orchestration aligns marketing and sales actions across channels to deliver seamless, personalized experiences to high-value accounts.

ABM Orchestration

Call Analytics

Call analytics is the practice of analyzing phone call data to extract insights, track key metrics, and improve overall business performance.

Call Analytics

Segmentation Analysis

Segmentation analysis is the process of dividing a broad market into smaller, distinct groups of consumers with similar needs or characteristics.

Segmentation Analysis

Sales Rep Training

Sales rep training is the process of equipping your sales team with the skills, knowledge, and tools to effectively sell and hit their targets.

Sales Rep Training

Digital Advertising

Digital advertising is the practice of delivering promotional content to users through various online and digital channels like social media or search engines.

Digital Advertising

Drip Campaign

A drip campaign is a series of automated messages sent to prospects or customers over time to nurture leads and drive engagement.

Drip Campaign

Customer Relationship Management Hygiene

CRM hygiene involves regularly cleaning and updating your customer data to ensure your CRM system remains a powerful and reliable tool.

Customer Relationship Management Hygiene

Firewall

A firewall is a digital barrier that protects a network by monitoring and controlling traffic, blocking unauthorized access and malicious content.

Firewall

Champion/Challenger Test

A Champion/Challenger test pits a new 'challenger' against the current best-performing 'champion' to see which one performs better.

Champion/Challenger Test

Market Intelligence

Market intelligence is the process of collecting and analyzing data about your target market, competitors, and industry to guide business strategy.

Market Intelligence

Email Verification

Email verification is the process of confirming that an email address is valid and deliverable, which helps improve campaign performance.

Email Verification

Predictive Lead Scoring

Predictive lead scoring uses AI to analyze data and rank leads by their likelihood to convert, helping sales teams prioritize their efforts.

Predictive Lead Scoring

Personalization in Sales

Personalization in sales means tailoring outreach to a prospect's specific needs, interests, and context to make communication more relevant.

Personalization in Sales

D2C

Direct-to-consumer (D2C) is a sales strategy where a brand sells its products directly to end customers, bypassing any third-party retailers.

D2C

Triggers

Triggers are predefined conditions that, when met, automatically launch a workflow or action, ensuring timely and relevant outreach.

Triggers

Buyer Intent

Learn about buyer intent, including understanding buyer intent signals, strategies to capture buyer intent, & buyer intent vs. customer interest.

Buyer Intent

Ransomware

Ransomware is a type of malicious software that encrypts a victim's files, holding them hostage until a ransom is paid for the decryption key.

Ransomware

Custom Metadata Types

Custom Metadata Types store application configurations as metadata. This makes them easily deployable between different Salesforce environments.

Custom Metadata Types

Drupal

Drupal is a free, open-source content management system (CMS) for building websites and applications. It's known for its robust flexibility.

Drupal

SFDC

SFDC stands for Salesforce Dot Com, a popular cloud-based CRM platform that helps companies manage their customer interactions and data.

SFDC

Data Warehousing

Data warehousing is the process of storing and managing large sets of data from various sources for business intelligence and reporting purposes.

Data Warehousing

Sales Operations Key Performance Indicators

Sales Operations KPIs are measurable metrics that track the efficiency and effectiveness of a sales team's operational processes.

Sales Operations Key Performance Indicators