The 97 › Strategy 26 › Week 4
The point
There are only three ways to grow a business. Three, not thirty. You increase the number of clients. You increase the average size of what each one buys. Or you increase the number of times each one buys from you. Every tactic anybody has ever sold you is a device for moving one of those three, and if it does not move one of them it does not do anything at all.
Now the observation that matters, and it has held in essentially every business I have examined: almost everybody works the first one, almost exclusively. Get more clients, find more leads, buy more traffic, hire more salespeople. It absorbs the budget, the attention and the anxiety.
And the first one is by an enormous margin the most expensive of the three. It is the only one where you must pay a stranger's acquisition cost, overcome a stranger's distrust, and prove yourself from nothing. The second and third are worked on people who already know you, already trust you, and have already decided you are worth money.
Here is the part that makes it geometric rather than additive. Move all three by ten percent — a genuinely small number — and the business does not grow by thirty percent. A thousand buyers at a hundred pounds twice a year is two hundred thousand. Eleven hundred buyers at a hundred and ten, two point two times a year, is two hundred and sixty-six thousand. The three numbers do not add. They multiply.
The mistake almost everyone makes
Running the three levers one at a time and judging each on its own. Any single lever moved alone looks marginal, gets abandoned, and the compounding never arrives.
The test: Can you state all three of your numbers from memory? If not, you are not running three levers — you are running one and hoping.
| Who | What happened |
|---|---|
| The 10-10-10 | Jay's own arithmetic: improve three things by ten percent each and you have improved the business by thirty-three, before any second-order effect. |
| Doubling three things | Double each of the three and the business is eight times larger. The same fact that makes small gains compound makes large ones explosive. |
| A supplement brand | One product, one purchase. Adding a subscription moved frequency and lifetime value without touching acquisition. |
| An accountancy | Annual compliance work only. Adding quarterly advisory moved frequency from one to four for the same clients. |
| A garden centre | Average transaction moved by placing companion products at the till rather than by attracting more visitors. |
| A software business | Seat expansion inside existing accounts outperformed new-logo acquisition at a fraction of the cost. |
| A restaurant | A second visit within thirty days doubled annual value per diner; the marketing budget had only ever chased first visits. |
| A professional services firm | Referrals moved lever one at almost no acquisition cost, which is what made the other two affordable to work on. |
This week
How many buyers do you have. What does an average one spend per purchase. How many times a year do they buy.
Three figures. Then run them at ten percent on each, and again at twenty-five.
Do it on paper, in your own handwriting. It lands differently when the numbers are yours.