What is the Cost of Growth?

In competitive markets, growth is a constant priority—but it doesn’t come free. For businesses leveraging incentives like rebates to fuel expansion, the big question remains: are these incentives simply costs of doing business, or are they strategic investments capable of unlocking long-term value? At Catalyze 2025, Enable’s VP of Rebate Strategy, Mark Gilham, explored this complex dynamic offering a fresh perspective on how companies can use rebates not just to grow, but to grow smarter.

Rebates and the Real Cost of Growth

In his Catalyze session, Mark Gilham framed the conversation around the provocative concept of the “cost of growth.” Often, financial incentives like rebates are viewed through a cost lens—expenses incurred to incentivize behavior. But is that the right way to think about them?

Gilham challenged this mindset by highlighting that while growth may come with costs, those costs can be strategic. In one scenario, a sales team used rebates to target 20% growth over four years with three national accounts. The goal was achieved—but not without trade-offs. Some clients were left dissatisfied, and the ripple effects across customer portfolios were uneven.

The takeaway? Growth fueled by rebates isn’t inherently good or bad—it depends on how well the strategy is aligned with business goals, how it’s measured, and how it’s managed. That stickiness can be a double-edged sword if you’re not clear on what you're incentivizing or why.

The Three Types of Rebates (and Why They Matter)

To navigate this terrain, Gilham introduced a useful framework: not all rebates are created equal. He categorized them into three main types:

• Growth/Size of Business Rebates – Designed to increase volume or overall business share.

• Shape of Business Rebates – Focused on encouraging specific purchasing behavior (e.g., product mix or seasonality).

• How We Do Business Rebates – Geared toward aligning operational or strategic practices (e.g., digital ordering or supply chain terms).

Understanding these categories helps businesses design rebates with intentionality—aligning incentives with desired outcomes rather than simply throwing money at the idea of growth.

This also highlights the psychological aspect of incentives. When businesses recognize and apply the behavioral drivers behind each rebate, they’re more likely to shape effective, long-term relationships, rather than just chase short-term gains.

Rebates as Risk: The Pitfalls of Poor Strategy

While rebates can fuel meaningful growth, they can also backfire if misused. Gilham warned against the dangers of channel consolidation, particularly when offering growth rebates in saturated markets:

“If the channel has no scope to grow, it’s just going to cannibalize itself. You want net new business, not converted customers.”

This nuance is crucial. Offering growth rebates without considering market context or channel capacity can lead to internal churn rather than true expansion. Rebates must be designed for net new behavior, not just rewarded for what’s already happening.

A Strategic Shift: From Cost to Investment

As Gilham points out, it’s time for a mindset shift: businesses must stop thinking of rebates purely as costs, and start treating them as strategic investments.

He likened this approach to how airlines manage loyalty programs—not as line-item expenses, but as future-oriented strategies for retention and value creation. The same logic applies to rebates. If aligned with long-term business objectives and managed well, rebates can drive sustainable growth, build stronger partner relationships, and even serve as a competitive differentiator.

Rebates Done Right: The Path to Profitable Growth

Rebates are more than just a sales tactic. They’re a powerful lever for shaping business behavior—if you understand how to use them. Gilham’s message at Catalyze 2025 was clear: businesses must move beyond treating rebates as transactional tools and start leveraging them as transformational strategies.

When thoughtfully designed and aligned with both customer motivations and business goals, rebates can help companies achieve growth that’s not only faster, but also smarter and more sustainable.

Dive deeper into Mark Gilham’s insights on rebate strategy and hear real-world examples firsthand in the full session recording from Catalyze 2025.