Month-on-Month (or MoM) means comparing data from one month to the previous month. For example, you could say “In June we had MoM revenue growth of 5%” which would mean that June had 5% more revenue than May.
A month is a good amount of time to measure changes in performance over. It’s long enough that stats from a month are quite reliable, but not so long that they are covering different seasons.
A month in this type of reporting can mean:
- A Calendar Month
- A 28 Day Period
- A 30 Day Period
Calendar months are the most intuitive, however, as calendar months are different lengths they can be slightly problematic to use when comparing to other calendar months.
28 days is a good reporting period as by using four complete weeks there is always the same number of weekdays and weekend days. However, only one month is 28 days long so reporting on 28 days is inherently an underestimate on volumes.
30 days is also a good reporting period as it’s the average length of a month. However, there can be 8-10 weekend days in a 30 day period making them inconsistent to compare.
Use this equation to calculate the change in metrics from one month to the next.
Month-on-Month Change =
((Any Metric ÷ Same Metric from the previous month) -1) x100
To calculate your Month-on-Month change you must -1 after dividing your metric by the previous month. This is because you are looking to see how much performance has changed.
If you just use your metric ÷ the previous month then you are not showing the change in results. Instead, you are showing how the metric is compared to last month. This can be very confusing, so let’s take the simplest example:
This month you made 200 sales. Last month you made 100 sales.
With metric ÷ the previous month you get 200 ÷ 100 = 2. If you turn this into a percentage it would be 200%. You can then say: “This month’s sales were at 200% the level of last month”.
If instead, you use ((Any Metric ÷ Same Metric from the previous month) -1) you get (200 ÷ 100) -1 = 1. You can then say “This month saw 100% more sales than last month”. Or similarly “We had a 100% increase in sales compared to last month”. Or even “Sales went up by 100% this month”.
The second version is what is used as standard simply because it’s easier to understand and it’s easier to use conversationally.