matt higgins

“We want to scale.” That’s great . . . but scale is also one of the most overused and misused buzzwords in marketing right now, and those two things are not unrelated. Scale is not interchangeable with grow.

If you spend $100 to produce products for $200 in revenue and then double your production at a new cost of $200 a resulting revenue of $400, you did great, but you did not scale. You grew. In fact, you grew a lot with a 100% increase in revenue. This is a deliberately simplified example and a linear one. Real revenue growth at that rate is hard to sustain. Truly scaling a business can be even harder and some businesses simply do not scale.

So, what does it mean to scale? Scaling a business means increasing revenue without similarly increasing costs, which means, unlike the linear growth example above, the profit growth becomes exponential. The appeal is real. Every business owner wants to reach more customers and make more money without proportionally increasing overhead, and that’s not an unreasonable thing to want.

Scaling a business is increasing revenue without similarly increasing costs. Scaling is growing a business in a way that revenue increases without increasing costs at the same rate, which means, unlike the above linear example, scale growth is exponential growth of profits.

How can a business scale? A focus on efficiency is one way. There are all sorts of efficiency improvements that can cut costs as a business grows. The efficiency could come in the form of improved manufacturing processes. Distribution efficiency improvements can also cut costs. Another way is lower costs. Lower material or labor costs per unit can also help a business scale. Increasing pricing can help scale. Some businesses such as software, SaaS, apps scale easier (easier, not easily) than hard goods. Unlike making automobiles, if you’re selling an app that gives you adulting tips and reminders to get your oil changed, flush your hot water heater, fertilize your lawn, or get a mammogram, once it’s developed, your cost to produce is the same whether you sell 100 or 1,000,000 installs. So, as long as you’re wise with your marketing spend, you can achieve exponential revenue growth.

The reason scale is becoming a four-letter word is because marketing service providers are taking advantage of the buzzworthiness of the term to sell something they will never deliver. While growth is great, focusing on scale often leads to a shift from a purposeful, holistic strategy. Too often scale is a siren’s call. It sounds good but the long-term outcome is often disastrous. Despite their promises, paying an agency to take over your paid social media or jumping on with a CTV program is not guaranteed to scale your business. Not alone they’re not. Paid social and CTV are some of the best marketing levers available to companies, but they should be part of your mix because they make sense for your brand and not because you are being sold on the idea of scaling your business.

If you want to truly scale, pulling a single marketing lever is not likely going to do it. It’s going to take a whole team effort. Increasing brand awareness and affinity, creating raving fans and engaging them all while increasing efficiency in every area of the business possible can lead to scaling up.