In 60 Seconds
Scaling Laws
- •Personalization Limitations: Personalization works for 'Conversion Rate' (Sales), but it fails for 'Top of Funnel' (Scale). You can't hand-write 10,000 letters.
- •The Funnel Math: To get 100 sales, you need 10,000 visitors. To get 10,000 visitors, you need 1,000,000 impressions.
- •Going Broad: As you scale, your CPA (Cost Per Acquisition) naturally rises because you are reaching 'colder' audiences. This is the price of growth.
- •Standardization: Scale requires standardization (McDonalds). Personalization requires manual effort (Private Chef).
- •The Hybrid: Use 'Mass Reach' for awareness, and 'Personalized Automation' (AI) for the follow-up.
"We want to double our revenue, but keep our CPA the same." Impossible.
The Law of Diminishing Returns applies to marketing. The "Low Hanging Fruit" (In-Market, High Intent) is cheap. Once you eat all that fruit, you have to climb higher (Out-of-Market, Low Intent). That costs more / effort.
The Role of Personalization
Personalization is a conversion mechanic.
- "Hey [Name], buy this [Product you looked at]."
- This increases the odds of that specific person buying.
The Role of Broad Reach
Broad Reach is a pipeline mechanic.
- "Hey [Everyone], we sell [Products]."
- This fills the pool so you have people to personalize to later.
Scaling Strategy
If you stay "Hyper-Personalized" and "Niche," you hit a ceiling.
- Stage 1 ($0-$1M): Hyper-Targeted. Niche. High Efficiency.
- Stage 2 ($1M-$10M): Broad Reach. Mass Media (Billboards/Radio/Broad Social). Lower Efficiency. Higher Volume.
[!IMPORTANT] Accepting Inefficiency Jeff Bezos knows Amazon ads are inefficient. He doesn't care. He cares about Aggregate Free Cash Flow. Would you rather have a 10x ROAS on $1,000 spend ($10k Revenue)? Or a 2x ROAS on $1,000,000 spend ($2M Revenue)? Take the millions.
Read Next in This Hub:
- Targeting Myth - The sister article.
- CAC Calculation - The cost metrics.
Related System:
- Local Visibility Systems - Mass reach engine.