Doubling revenue at the same headcount, and blended MER from 1.8x to 5.6x in a quarter
The mandate was to double revenue without doubling the team. That meant a new operating model, new tooling, and a team trusted to run more of the business on its own.
Flax LabsCOO & AdvisorDec 2024 – May 20263 min read- 2x
- Revenue, at similar headcount
- 1.8x5.6x
- Blended MER, within a quarter
- $80M+
- Ad spend managed in two years
- $250M+
- DTC revenue generated for clients
Context
Flax Labs is a bootstrapped growth agency that scales eight- and nine-figure ecommerce brands profitably, using data-driven advertising built to protect margins and lower acquisition costs. Over two years the team managed more than $80M in ad spend and generated more than $250M in DTC revenue across roughly 200 ecommerce companies.
When I joined as COO in December 2024, the company had just tested a new model: some of the team had shifted roles into smaller pods, each handling a handful of clients. I was asked to double revenue while keeping headcount roughly where it was.
I ran revenue and business operations: the marketing, sales and client success teams, plus strategy, business expansion and the product roadmap for the tools we built.
The thesisYou do not double revenue by doubling effort. You double it by removing the work that should not need a person, and trusting people with the work that does.
What turned it around
- 01A restructured teamRoles expanded, responsibility moved closer to the client, and each person carried more accounts. Because AI tooling took over the repetitive work, total hours stayed the same or fell.
- 02A deliberate client mixNew software was proven on smaller clients before it reached larger ones. That meant serving both well at once: careful testing on one side, exceeding expectations on the other.
- 03AI adoption with clientsClients were skeptical at first, as most are. Once the tooling averaged 4x+ ROAS per client, buy-in followed quickly.
The restructure came with real road bumps, and for a period blended MER fell as low as 1.8x. These three changes are what turned it around. None of them is a marketing tactic on its own; together they changed how much value each person on the team could deliver.
Rolling out new tools safely
Every new piece of software followed the same path from smaller accounts to larger ones.
This is the rule that let us ship new tools quickly without putting our biggest relationships at risk. Smaller accounts were the test bed, with close oversight and clear expectations. Larger accounts only ever ran tooling that had already proven itself, paired with senior strategy.
The bottom-right quadrant is the one to avoid: unproven tools on the accounts that matter most. Keeping it empty is what made the pace of change safe.
The client growth system
This is the system every client went through. It starts with a full audit and financial forecast, so every later decision is tied to the numbers the business actually cares about. Creative, campaign structure and the landing experience are then built to acquire genuinely new customers profitably.
The last step is what keeps the whole thing honest. Ad platforms tend to over-report their own results, so performance was checked with holdout tests, geo-lift studies and cross-referenced data before budget moved. Those results fed straight back into the next round of creative and campaigns.
Measuring what is real
| Platform-reported | How we measured | |
|---|---|---|
| Source of truth | The ad platform’s own attribution | Independent data, cross-referenced across sources |
| Who gets counted | Often existing customers retargeted | Genuinely new customers |
| Proof of impact | Correlation and last click | Holdout tests and geo-lift studies |
| Success metric | Platform ROAS | Blended MER and contribution margin |
Most agencies report what the ad platforms tell them. The problem is that platforms are paid by the same spend they are reporting on, and their default settings lean toward retargeting existing customers, which makes results look better than they are. We built our own measurement so that clients, and our own team, were optimizing for real growth.
Results
Blended MER divides total revenue by total marketing spend, including our own marketing, so there is nowhere for a weak channel to hide. Moving it from 1.8x to 5.6x within a quarter meant the restructure had paid for itself, and the business was getting more than three times as much revenue from every marketing dollar. The mandate was met: revenue doubled with roughly the same headcount.
Across client accounts, MER ranged from 2.8x to 13.7x depending on the brand, category and stage.
Output is a byproduct of efficiency. Coach and equip a team until it can run on its own; that autonomy is what makes scale possible.