When Growth Hides Inefficiency: The Hidden Cost of Product Variants

The Challenge

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A CEO of a fast-growing marketing and lead generation firm was riding the wave of rapid success. After securing investment and overseeing the founders’ exit, he had expanded the team from 10 to over 30 people and achieved impressive sales growth in the UK market.

But the business was showing signs of strain. As lead volumes rose, quality dropped sharply. Clients were unhappy, order volumes were falling, and his investors were watching closely. Without restoring both quality and confidence, international expansion would be off the table - and the UK business might even shrink.

The company’s pricing model made the issue more complex: clients only paid for contactable leads. Generating more leads was easy; maintaining quality at scale was not. The supply team were pushing hard for higher volume, but the sales team were dealing with the fallout.

The question was clear: how could the business continue to grow without sacrificing quality or profit?

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The Discovery

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The CEO’s passion was undeniable, but the business had outgrown its early ways of working. Communication between the once-close teams had fractured as the company scaled. Monthly meetings had replaced informal collaboration, and the disconnect between supply and sales was widening.

The supply team were analytical, driven, and laser-focused on volume. Each month, they were set a volume target and used the previous month’s average sale price to optimise their paid search campaigns.

The sales team, meanwhile, were managing frustrated customers. Declining lead quality meant lower contact rates, wasted staff time, and slipping morale. Their success depended on performance the supply team couldn’t see, and vice versa.

It was time to connect the dots.

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Following the Data

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At first, the data told an incomplete story. Lead source information existed, but it wasn’t being linked to downstream performance. By matching keywords from the supply data with customer-reported outcomes, we finally saw the full picture, and it was eye-opening.

Some of the highest-priced keywords were generating the lowest-quality leads. Others, previously overlooked, produced consistently strong conversion rates.

The missing connection between lead source and lead performance had been masking profit opportunities and driving inefficiency on both sides.

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The Solution

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Once we uncovered the link, the path forward was clear.

1. Built a connected data set that tied lead generation (supply) to lead quality and conversion (sales).
2. Created live dashboards so both teams could see keyword-level performance and optimise together in real time.
3. Enabled differentiated pricing - allowing the firm to charge more for high-quality leads and reduce spend on low-performing sources.
4. Equipped leadership with a clear, high-level view of volume, quality, and profitability.

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For the first time, the entire business was operating on shared data and shared goals.

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The Outcome

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Sustainable growth, increased profit, and happier teams.

• Revenue and profit growth: Lower spend, higher quality, and differentiated pricing led to consistent month-on-month profit increases.
• Increased prices: By linking keyword data with conversion rates, the firm could justify premium pricing for higher-quality leads. Clients were happy to pay more for results that converted.
• Full client retention: Competition among clients for top-quality leads created scarcity, and 100% retention of key customers.
• Improved team morale: Supply and sales finally spoke the same language. Data became a bridge, not a barrier. Meetings turned from negotiation to collaboration.

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The CEO achieved what every growth-minded founder hopes for: a scalable model that works better at every level.

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What We Learned

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This project showed how easily profit can leak when systems don’t talk to each other.

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Key insights:

• The flaw of averages: Relying on outdated averages can hide inefficiency and distort decision-making.
• Complex product portfolios need clarity: Without full visibility of variant performance, some “profitable” products can quietly erode margin.
• Communication is a process too: As teams grow, informal communication must be replaced by intentional data flow.
• Higher cost doesn’t always mean higher quality: Evidence, not assumption, drives profit.

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The 5Ps in Action

• Profit: Lower spend with higher quality meant higher prices for less cost
• Person: Teams refocused on shared success, not competing priorities.
• People: Data became the communication mechanism connecting supply and sales.
• Process: Introduced structured, data-driven optimisation across the value chain.
• Performance: Differentiated pricing and visibility restored profitability.

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In Reflection

Growth often exposes inefficiencies that early success hides. Without connected data, even high-performing teams can work against each other’s interests.

When information flows freely and performance is measured accurately, growth becomes sustainable, and profit becomes predictable.

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Call to Action

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If your business has grown quickly but profitability isn’t following suit, the issue may not be volume, it may be visibility. I help service-based businesses connect their people, processes, and data so they can scale profitably, not painfully.

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