One of my key objectives in our six week execution cycle is to relaunch another iteration of a PPC campaign. We’ve been adding people to the team and capacity has exceeded demand. Because of this, capturing more of the market has been critical.
In the background though, one of our clients was acquired and transitioned into a chief marketing role in the purchasing organization. She recently told me that she’s replacing that organization’s agency of record with us. This will more than double the considerable work we were doing for her before.
Now, the focus has shifted to maximizing our team’s productivity.
Years ago, a friend of mine shared a model with me that he learned through Gazelles coaching program concerning profit and revenue. The model is a pendulum where you chase revenue and then profit and then revenue and then profit ad infinitum. In other words, you grow revenue and then you make it profitable. Rinse and repeat.
I define profit as the capture of excess value. How productive you are in creating and capturing it determines your profitability.
We were chasing revenue with customer acquisition, but that pendulum is swinging back for us to chase profit by becoming more productive.
I can’t launch the full PPC campaign until I’m confident that we have the resources to take on new clients while still serving existing clients. So I’m making changes to our team and systems to address the expanding demand. As our profit margin percentage climbs and the slack in the business is taken up, it will be time to add people and swing back towards revenue expansion.
This isn’t to say that you can’t or won’t pursue profit and revenue at the same time. Just that one is going to be more impactful than the other, depending on your context. There’s a threshold in your business where you hit a ceiling and trying to squeeze more productivity creates negative effects. There’s also a threshold where you expand revenue and go out of business.
If you’re pursuing growth, the trick is to know which arc of the pendulum that you’re on.
More on improving productivity and profit: The Profit Window
Featured image is from Edgar Allen Poe’s “The Pit and The Pendulum.” By Harry Clarke from Edgar Allan Poe’sTales of Mystery and Imagination, 1919. Used under public domain.