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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Product-Led Growth

Product-Led Growth (PLG) is a business strategy where the product itself drives user acquisition, conversion, and expansion.

Product-Led Growth

Inside Sales Metrics

Inside sales metrics are quantifiable measures used to track the performance, activities, and effectiveness of an internal sales team.

Inside Sales Metrics

Channel Sales

Channel sales is an indirect sales model where a company leverages third-party partners, such as resellers or affiliates, to sell its products.

Channel Sales

Buyer

Learn about buyer, including identifying your ideal buyer, understanding buyer's journey, & evaluating buyer decision processes.

Buyer

Sales Training

Sales training is the process of honing a salesperson's skills and knowledge to enhance their effectiveness and drive sales success.

Sales Training

Inbound leads

Inbound leads are potential customers who proactively reach out after finding your business through content, social media, or search.

Inbound leads

Dark Social

Dark social is the sharing of content through private channels like messaging apps or email. This traffic is hard to track as it lacks referral data.

Dark Social

Buyer Intent Data

Learn about buyer intent data, including sourcing and interpreting buyer intent data, & key metrics in buyer intent analysis.

Buyer Intent Data

Break-Even

Learn about break-even, including calculating your break-even point, importance of break-even analysis, & break-even analysis vs. profit margins.

Break-Even

Salesforce Administrator

A Salesforce Administrator is a certified professional who manages and customizes the Salesforce platform to meet a company's specific business needs.

Salesforce Administrator

Sales Development Representative (SDR)

A Sales Development Representative (SDR) is a sales specialist who finds and qualifies new leads, building a pipeline for the sales team.

Sales Development Representative (SDR)

Sandboxes

A sandbox is an isolated testing environment where new or untrusted code can be run safely without affecting the host device or network.

Sandboxes

Business Intelligence In Marketing

Learn about business intelligence in marketing, including the role of data in marketing BI, key components of marketing BI, & marketing BI vs. market research.

Business Intelligence In Marketing

Geo-Fencing

Geo-fencing creates a virtual boundary around a real-world location. It triggers actions on a device when it enters or exits this area.

Geo-Fencing

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

Marketing Performance

Marketing performance is the process of measuring a campaign's effectiveness against set goals using key metrics like ROI and conversion rates.

Marketing Performance

Customer Relationship Management Systems

A Customer Relationship Management (CRM) system is a tool that centralizes customer data to help manage interactions and nurture relationships.

Customer Relationship Management Systems

Sales Key Performance Indicators

Sales Key Performance Indicators (KPIs) are quantifiable metrics used to measure how effectively a sales team is achieving its key objectives.

Sales Key Performance Indicators

Revenue Forecasting

Revenue forecasting is the process of estimating a company's future revenue, using historical data and market trends to guide strategic planning.

Revenue Forecasting

Small to Medium-Sized Business

A small to medium-sized business (SMB) is a company whose employee count and annual revenue fall below certain industry-specific thresholds.

Small to Medium-Sized Business

Real-time Data

Real-time data is information processed and made available almost instantaneously, enabling immediate analysis and decision-making.

Real-time Data

Integration Testing

Integration testing is a software testing phase where individual modules are combined and tested together to verify their interaction.

Integration Testing

Webhooks

Webhooks are automated messages sent by an app when a specific event occurs. They push real-time data to another app's unique URL.

Webhooks

Bulk Application Programming Interface

Learn about bulk API, including how it works, the advantages of using it, common use cases, and tips for optimizing it.

Bulk Application Programming Interface

Challenger Sales Model

The Challenger Sales Model is a sales approach where reps challenge a customer's thinking by teaching, tailoring, and taking control of the sale.

Challenger Sales Model

Positioning Statement

A positioning statement is a concise description of your target market and how your product or service uniquely fills their needs.

Positioning Statement

Data Security

Data security protects digital information from unauthorized access, corruption, or theft throughout its entire lifecycle.

Data Security

Sales Performance Metrics

Sales performance metrics are key data points that measure a sales team's effectiveness in achieving its goals and driving revenue.

Sales Performance Metrics

Net 30

Net 30 is a common payment term where a client has 30 calendar days from the invoice date to pay for goods or services in full.

Net 30

Demographic Segmentation in Marketing

Demographic segmentation divides a market into groups based on traits like age, gender, and income, allowing for more targeted marketing efforts.

Demographic Segmentation in Marketing

Complex Sale

A complex sale features a long sales cycle, multiple stakeholders, and a high-value transaction, demanding a strategic, consultative approach.

Complex Sale

User-generated Content

User-generated content (UGC) refers to any form of content, like images, videos, or text, created and shared by users on online platforms.

User-generated Content

Average Selling Price

Average Selling Price (ASP) is the average price at which a particular product or service is sold across different markets and channels.

Average Selling Price

Sales Productivity

Sales productivity is the measure of a sales team's efficiency, focusing on maximizing revenue generation while minimizing the resources spent.

Sales Productivity

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

Email Marketing

Email marketing is a digital strategy where businesses send targeted emails to prospects and customers to build relationships and drive sales.

Email Marketing

Prospecting

Prospecting is the process of identifying potential customers, or prospects, to build a sales pipeline and generate new business opportunities.

Prospecting

Warm Email

A warm email is a message sent to a prospect with whom you have a pre-existing connection, like a mutual contact or a prior interaction.

Warm Email

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

Cybersecurity

Cybersecurity is the practice of protecting computer systems, networks, and data from digital attacks, theft, and unauthorized access.

Cybersecurity

Sales Bundle

A sales bundle groups multiple products or services into a single offering, often at a discounted price to provide greater value to customers.

Sales Bundle

Follow-up

A follow-up is a communication sent after an initial interaction to continue the conversation, provide more value, or prompt a response.

Follow-up

Single Sign-On (SSO)

Single Sign-On (SSO) is an authentication method allowing users to access multiple applications with one set of login credentials.

Single Sign-On (SSO)

AppExchange

AppExchange is Salesforce's cloud marketplace, offering a vast ecosystem of apps and expert services to extend Salesforce functionality.

AppExchange

Buying Cycle

The buying cycle is the journey a customer takes from first realizing they have a need to making the final purchase decision.

Buying Cycle

Trademarks

Think of a trademark as a brand's unique signature—a word, symbol, or phrase that legally protects its identity and sets it apart from the rest.

Trademarks

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

Needs Assessment

A needs assessment is the process of identifying the gap between a company's current state and its desired future state.

Needs Assessment

Employee Engagement

Employee engagement is the emotional commitment an employee has to their organization, motivating them to contribute to the company's success.

Employee Engagement

Inbound Sales

Inbound sales attracts interested prospects who've engaged with your brand, letting sales reps connect with warm leads instead of cold outreach.

Inbound Sales

Buying Signal

A buying signal is any action from a prospect that indicates they are interested in making a purchase, helping sales teams prioritize leads.

Buying Signal

Funnel Analysis

Funnel analysis is a method for understanding the steps users take to complete a goal, revealing where they drop off in the conversion process.

Funnel Analysis

ClickFunnels

ClickFunnels is a popular online tool that lets entrepreneurs easily build sales funnels to guide potential customers through the buying process.

ClickFunnels

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

CPQ software

CPQ (Configure, Price, Quote) software is a sales tool for creating accurate, configurable quotes for complex products and services.

CPQ software

Point of Contact

A Point of Contact (POC) is the designated individual or department that serves as the main hub for information and communication on a matter.

Point of Contact

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

Firmographics

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

Firmographics

Request for Information

A Request for Information (RFI) is a formal process for gathering information from potential suppliers before issuing a more detailed proposal.

Request for Information

Artificial Intelligence in Sales

AI in sales uses smart technology to automate repetitive tasks, analyze customer data, and help sales reps close deals more efficiently.

Artificial Intelligence in Sales

Quality Assurance

Quality Assurance (QA) is the systematic process of ensuring a product or service meets specified quality standards from development to delivery.

Quality Assurance

Functional Testing

Functional testing verifies that software performs its intended functions as specified in the requirements, ensuring it works as users expect.

Functional Testing

Average Revenue per Account

Average Revenue per Account (ARPA) is the average revenue generated from each customer account, usually measured on a monthly or annual basis.

Average Revenue per Account

Below the Line

Learn about below the line, including key strategies for below the line marketing, & distinguishing above and below the line tactics.

Below the Line

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

After-Sales Service

After-sales service is the support provided to customers after they've purchased a product. It includes things like warranties, training, or repairs.

After-Sales Service

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

Retargeting Marketing

Retargeting marketing is a digital advertising strategy that targets users who have previously interacted with your website or brand online.

Retargeting Marketing

Hadoop

Hadoop is an open-source framework designed for the distributed storage and processing of extremely large data sets across clusters of computers.

Hadoop

Open Rate

The open rate is the percentage of recipients who opened an email. It's a primary indicator of a subject line's effectiveness.

Open Rate

Account

An account is a company or organization that you're targeting for sales. It can be a prospective, current, or even a past customer.

Account

Content Delivery Network

A Content Delivery Network (CDN) is a system of distributed servers that deliver web content to users based on their geographic location.

Content Delivery Network

End of Quarter

“End of Quarter” (EOQ) refers to the final weeks of a business quarter when sales teams rush to meet quotas, often leading to a flurry of deals.

End of Quarter

Progressive Web Apps

Progressive Web Apps (PWAs) are websites that look and feel like native mobile apps, offering features like offline access and push notifications.

Progressive Web Apps

Git

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

Git

Smarketing

Smarketing is the process of aligning your sales and marketing teams. This integration focuses on shared goals to improve lead quality and drive revenue.

Smarketing

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 Workflows

Sales workflows are a set of automated actions that streamline the sales process, helping teams engage leads consistently and close deals faster.

Sales Workflows

Email Personalization

Email personalization uses subscriber data—like their name, interests, or past behavior—to create highly relevant and targeted email campaigns.

Email Personalization

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

Lead Nurturing

Lead nurturing is the process of developing and reinforcing relationships with buyers at every stage of the sales funnel.

Lead Nurturing

Interactive Voice Response

Interactive Voice Response (IVR) is an automated phone system that uses voice and keypad inputs to interact with callers and route their calls.

Interactive Voice Response

Phishing Attacks

Phishing attacks are fraudulent attempts to trick you into revealing sensitive data like passwords or financial info by posing as a trusted source.

Phishing Attacks

Precision Targeting

Precision targeting is a marketing strategy that uses data to identify and reach a highly specific audience most likely to convert.

Precision Targeting

Request for Quotation

A Request for Quotation (RFQ) is a document that a company sends to one or more suppliers to get a quote for specific products or services.

Request for Quotation

Logo Retention

Logo retention is a key B2B metric that measures a company's ability to retain its customers, or 'logos,' over a specific period.

Logo Retention

Triggers

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

Triggers

Price Optimization

Price optimization is the process of finding the ideal price for a product or service to maximize profitability or other business objectives.

Price Optimization

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

API

An API (Application Programming Interface) is a software intermediary that allows two applications to talk to each other and exchange information.

API

Lead List

A lead list is a curated database of potential customers (leads) with contact information and other key data for sales and marketing outreach.

Lead List

Sentiment Analysis

Sentiment analysis, or opinion mining, automatically determines the emotional tone behind text—whether it's positive, negative, or neutral.

Sentiment Analysis

Sales Calls

A sales call is a real-time conversation between a salesperson and a prospect, aiming to persuade them to purchase a product or service.

Sales Calls

Data-Driven Marketing

Data-driven marketing uses customer data to inform marketing decisions, optimize campaigns, and deliver personalized experiences to consumers.

Data-Driven Marketing

Intent leads

Intent leads are prospects who show buying signals through their online actions, indicating they're actively looking to make a purchase.

Intent leads

Data Encryption

Data encryption translates data into another form, or code, so that only people with access to a secret key or password can read it.

Data Encryption

Account-Based Selling

Account-Based Selling is a B2B strategy where sales and marketing treat high-value accounts as markets of one, using personalized outreach.

Account-Based Selling

Triggered Email

A triggered email is an automated message sent to a user in response to a specific action or event, like signing up or making a purchase.

Triggered Email

Marketing Metrics

Marketing metrics are quantifiable values that marketing teams use to measure and track the performance of their campaigns and efforts.

Marketing Metrics

User Experience

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

User Experience