Marketing for Scaling vs. Growth – the Differences
Marketing professionals often use “scaling” and “growth” interchangeably. However, they are different things. This means growth-focused marketing is different from scale-focused marketing.
You may ask what’s the difference, this article explains it for you.
Scaling vs Growth: the Differences
Growth-focused marketing must raise expenses to increase revenue. Thus, with growth, there is a linear relationship between revenues and costs. Ideally, you want to boost revenues more than costs, but the two have a close relationship.
This is the case in professional services firms, where humans perform most of the tasks. A single employee can deliver only a limited amount of work. Thus, more staff = more costs. It’s difficult for these firms to scale and escape from the linear model. This is especially true if the companies don’t have dependable streams of passive revenue to bail them out.
Scaling is mainly done by billion-dollar technology and software enterprises. This is because these companies can expand revenues without incurring commensurate costs. Facebook or Google can invest some funds to increase the number of users (who primarily drive revenue). But this relationship is different compared to growth-focused enterprises. AI and algorithms can support much more business compared to humans.
Thus, technology and software behemoths follow scalable models. Scaling doesn’t mean getting big or growing fast. This business type is different. However, we are not judging value here as both types of companies have good points.
Unlike growth, scaling needs a considerable upfront investment. Tech giants have invested millions of dollars in their products. They have deep pockets to tolerate losses for years to secure future growth. However, it’s impossible for a consulting or accounting firm to follow this strategy. The dissimilarities extend to the marketing of a firm.
Marketing for Scale vs. Growth
Growth-focused firms need to generate relevant leads and find a fitting user base. For this, they need to market at a particular horizontal or vertical. The niche needs to be tight to increase the chances of finding suitable leads.
On the other hand, scale-focused companies can afford to be looser as they aim to find a place in the market rather than fitting with clients. They don’t need to care what type of consumers use their Software as a Service product as long they make regular subscription payments.
Marketing for scaling means marketing on a large scale. Such companies focus on viral growth and effective follow-through to maintain their billion-dollar valuations.
Stick to Your Strengths
Don’t try to do both things. Marketers and company executives need to be sure of their company type, expectations, and motives for creating and executing their strategies. If a growth-focused company tries to scale, it might well meet a debacle as WeWork suffered in 2019. Therefore, keep your expectations realistic to improve the results for your marketing and firm.
Now you know that scale and growth cannot be used synonymously. You can’t include them interchangeably in conversation. Further, one isn’t bigger or better than the other. They are different models that do not meet. Thus, marketing for scale vs. growth is a separate ballgame.
To summarize, you should comprehend what your firm is and its capabilities. Develop your marketing strategies around your strengths and you’ll certainly stay a step ahead of competitors.