January 21, 2005

The Scaling Lie: You Can’t Cut Your Way to Growth

🚀 Audacious Move™ of the Week

The Scaling Lie: You Can’t Cut Your Way to Growth

Bold Decisions Create Extraordinary Businesses.

I hope it helps you create yours.

There’s a popular notion about scaling a business that drives me nuts.

Grow revenue faster than you grow costs.

Revenue goes up 10%. Costs go up 5%. Congratulations—you’re scaling.

Technically, perhaps.

But that thinking puts the emphasis in the wrong place.

You don’t scale a business by obsessing over costs. You scale it by creating a revenue machine capable of pulling the right costs behind it.

My approach has always been revenue-first.

I’m not interested in nickel-and-diming an organization into prosperity.

I want to architect the business around creating unique value people are prepared to pay for.

Here’s what that takes.

🔥 Grow Customer Share™

Stop behaving as though growth requires constantly chasing new customers.

Your existing customers already know you. They’ve already experienced you. They’ve already chosen you.

Give them reasons to buy more of your products and services and choose you more often.

Customer retention is important. But Customer Share™ is where the growth opportunity really gets interesting.

🎯 Give People Something They CRAVE

Products are easy to copy.

Features are easy to copy.

Prices are easy to match.

The opportunity is to discover the Reward Signals™ of the Customer Groups you’ve chosen to serve—the things they repeatedly demonstrate they care about enough to reward.

Then build your ONLY Statement™ around delivering what they CRAVE in a way no competitor does.

That gives you permission to charge a premium rather than compete in the price swamp.

❤️ Make Loyalty an Operating Obsession

Deliver your core service flawlessly.

Create Dazzling Moments™ people remember.

And when you screw up—and you will—use OOPS! Service Recovery to recover in a way that strengthens the relationship.

Loyalty isn’t a marketing program.

It’s the result of hundreds of experiences delivered by the entire organization.

🧹 Cleanse The Inside™

Growth dies when your organization makes it difficult for customers to do business with you.

Reduce friction.

Simplify processes.

Reduce touch points.

Increase the viscosity of your value delivery systems so that the unique value you promise actually reaches the customer.

Differentiation must be baked into the way the organization operates.

Otherwise, it’s just another slogan.

👀 Create Line of Sight™

Every person needs to understand exactly how what they do contributes to the Strategic Game Plan™.

Not theoretically.

Specifically.

If people can’t see the direct line between their job and your growth strategy, execution fragments and scaling stalls.

🚀 Revenue Pulls Costs

This is the mindset shift.

Don’t begin with:

“How much can we cut?”

Begin with:

“What do we need to invest to deliver the unique value that will produce the revenue growth we want?”

Then make those investments ruthlessly.

Scaling isn’t about cutting corners.

It’s about building a revenue machine around value people can’t get anywhere else.

Create unique value.

Turn customers into loyalists.

Grow Customer Share™.

Cleanse the organization.

Align every person behind the strategy.

Then let revenue pull the costs required to keep the machine growing.

That’s how you scale without becoming another member of the Herd of Sameness™.

🚀 Want more Audacious Moves™?

🎙️ Listen to Audacious Moves to a BILLION™ for practical, contrarian ideas for building an extraordinary business and having a remarkable career.

✍🏻 Explore more articles, ideas and proven tools at BE DiFFERENT or be dead.

Extraordinary careers aren’t built by ordinary decisions. They’re built one Audacious Move™ at a time.

Now go make yours.

Cheers,
Roy

• Posted 1.21.05 at 06:00 am by Roy Osing
• Permalink