Growth is Good. Except When It Sucks.

We love to talk about growth. New customers, expanding footprints, growing revenue—it all sounds great on the surface. But here’s a question we don’t ask nearly enough:

Are we growing in the right way?

A lot of companies track price, volume, mix.  It's not sufficient to know if your growth execution is good or bad.  You need a better mouse trap.  Companies that do this well track the following KPIs in their profit bridges: 

👉 Cost
👉 Price
👉 Repeat Volume
👉 New Business
👉 Lost Business

Simple, right? Frankly, it is pretty simple.....But when you start tracking these consistently, the story they tell is anything but simple—and sometimes, it's downright uncomfortable.

Growth vs. Profit: The Hidden Trade-Off
We’ve all seen companies celebrate new business wins... only to realize later that they were chasing revenue at the expense of profit. New business isn't inherently good—it depends on what kind of business it is.

If your new accounts have lower margins than the ones you're losing, you're digging a hole while smiling for the photo op.

This is why a margin bridge in this way isn’t just about tracking dollars. It’s about understanding the quality of your growth. It helps you ask:

Are we gaining profitable share?

Is price holding or slipping?

Are we giving away margin to get new business?

Repeat Volume: Your Economic Thermometer
Let’s talk about repeat volume—the purchases your existing customers make. In most mature industries, repeat volume is highly influenced by the economy. If you see repeat volume dropping by 3%, that might not be your sales team's fault—it could just be a reflection of market-wide contraction.

That said, if the economy is flat and your repeat business is down 3%, now you’ve got a different kind of problem.

Either way, repeat volume is your macro signal. It tells you what kind of current is underneath your boat.

Market Share Math: Are You Actually Winning?
Here’s where it gets interesting.

If repeat volume is down 3%, and the market is down 3%, it is what it is.  If repeat volume is up 3%, and the market is up 3%, it also is what it is.  But if the market is down 3% and your new business/lost business ratio is 1.0 - than the argument can be made that you are actually gaining market share.  Similarly, if repeat volume is up 3% and your new business/lost business ratio is 1.0, than the argument can be made that you are losing market share.

Track Margin by Type: Repeat vs. New vs. Lost
And here’s the kicker: you don't need to just understand the dollars, you’ve got to track gross margin percent across those three categories—repeat, new, and lost.

Why?

Because not all dollars are created equal.

You might be bringing in new business, but if it’s at a lower margin than what you lost, your overall profitability takes a hit. And if you're discounting to win new business while losing full-margin legacy accounts, you're on a downward slope.

Ask yourself:

What’s the margin profile of the customers we’re winning?

What’s the profile of the ones we’re losing?

Are we actually improving our mix—or eroding it?

If you're not segmenting margin performance this way, you're likely missing the why behind your numbers.

Bottom line? A margin bridge isn’t just a financial tool—it’s a strategic conversation starter.

It helps you see past the top line and ask the tougher (but smarter) questions:

Are we pricing well?

Are we defending our base?

Are we winning the right customers?

Are we building the kind of growth that sticks?

Growth is great—but growth that is contributing to a healthy customer and product portfolio is better. And that starts with understanding what’s really driving your margins.