SCALING VS. GROWTH
After the technology boom of the past decade, the most successful companies have shown that the path to success isn’t all about growth — it’s about scaling. They’ve learned how to create business models that easily scale to generate massive revenues without adding massive costs and resources along the way.
Many entrepreneurs are often confused by the difference between growth and scaling. Growing means a marketing department adds new resources (capital, people, or technology), and its revenue increases as a result. For instance, a marketing department may gain $50,000 in new revenue, but in order to do so they had to hire a new marketing person with a $50,000 salary. The company’s gains and losses are evened out, so even though the company is growing — by one new employee and a corresponding uptick in revenue — it really hasn’t gained much value.
Scaling, on the other hand, is when revenue increases without a substantial increase in expenditures. Processes “that scale” are those that can be done in a cost-effective manner. Scaling is the process of growing exponentially. A marketing department that spends $5,000 on marketing automation tools to allow more efficient marketing to a wider audience, gaining $50,000 in new revenue as a result, is scaling. The company’s gains outpace its losses, allowing it not only to grow but also to scale. Other examples are being able to go from handling 5 clients to 500 or sending out emails to 10 people or 1 million, without a major increase in cost or labor.
Your marketing business scales when it can cope with an increase in work while maintaining or increasing its efficiency.
When it comes to scaling your marketing business, here are some great predictors of success:
· Predictable revenue — do you have a standard outbound and/ or sales process and systems in place? Having a playbook that describes what you have to say on your first call versus your third call if you want to reach out to new customers. The same goes for LinkedIn messages or emails. Make a playbook.
· Subscription-based services — do you have systems in place so every year you start the year with money in the pipe? One example is a yearly or monthly subscription of your service/tool, conform the DashIQ
· Having diverse income streams — don’t bet on one income stream only. You can get money from a product you offer, a service/consultancy, or providing a training/academy, etc.
· High customer retention rates — know that 20% of your customers produce 80% of your sales. Repeat customers spend more, generate larger transactions, and bring in business by word of mouth.
· Creating a value ladder of products for your customers — this allows you to cater to your customers’ needs. E.g., at the very bottom of the value ladder, create free content in exchange for customers’ email addresses. As clients ascend the ladder, the value level increase as does the cost to play. E.g., you give a free PDF download about the 5 biggest mistakes scaleurs make when scaling their marketing team. Then you go for an eBook — How to Reach the Scaleur Mindset for $19. Further up the ladder, you can market an online training course — How to Scale Up from 1 to 1 billion for $99. From there you can go for the one-year program for $999, ultimately end with coaching for $2,500 per year.
· Having dedicated KPIs that you can track on a dashboard — this is your visual success panel for the company. Focus on key indicators instead of tackling everything at once.
Companies scale their marketing business when their revenue increases and their marketing and operating costs remain static. If a company increases their revenue but increases their costs at the same rate, then that business is not scaling.
In order to find scalable aspects in your marketing model, you must first locate the aspects of your marketing business that can be replicated quickly and cost effectively, while still building a strong marketing organization.
Become a Successful Scaleur
I hope this blog will prove to be helpful in your endeavor. After all, Scaling is a strategy that can only be mastered by a scaleur who is an ardent learner and considers real-time business priorities.
Marketing Scaleurs is a scaling company helping entrepreneurs scale their marketing efforts. To accomplish this, we help businesses strive and succeed with growth marketing, product development and more. How do we do it? We create custom growth plans to startups, entrepreneurs and scaleurs in order to help them gain traffic, generate leads and increase their revenue. If you want traffic, leads and sales, send an email to Marketing Scaleurs today, and you will start getting results in no time