In a previous article I made reference to the British cycling team and the power of marginal gains, where lots of small incremental changes can make a significant difference to the performance of businesses; with this in mind I thought I’d share a good way to help use the marginal gain concept to boost your business performance.

Many business owners believe the only way to make more profit is to either increase sales or reduce costs, however, I believe it is worth breaking the sales process down into four areas; enquiries, conversion rates, average spends and repeat purchases. The next step is to measure what your current levels of each are, to do this you will need a good CRM (customer relationship management) system and a great accounting software package such as Xero.

Once you know your key performance indicators (KPI’s) you can get the team together and have a brainstorming session of ideas to improve each KPI. Hopefully under each category you will be able to come up with five or six ideas and you can then decide on which one you want to try first.

It is very important that you measure the results of each activity you try as you need to know whether it has had positive outcomes on the KPI’s.

The real benefit of this method is that in each area the results are compound, so if you can improve the four sales areas and reduce variable costs by 10% the results on performance will be an improvement of 61% not 50%!


Most businesses start their trading activities with enquiries whether it’s a branding design enquiry to a creative business or footfall in a shop. It is important to reflect on how you are currently receiving these enquiries and consider ways in which you could achieve more. This could be through the clever use of social media, internet advertising such as Google advertising or national/local media advertising.


The second stage is to convert the enquiries. If your current conversion rate is 40%, what ideas can you come up with for your business to achieve 44%? Will it be to train the team to improve their product knowledge and sales skills or will you focus on creating a follow up system? This is where a good CRM system will help such as Insightly that connects seamlessly with Xero.

Average spend

Now that you have converted, the next step is to improve the amount of average spend per transaction. Depending on the type of business, this amount could be vastly different; however, what is important is how to increase it, perhaps by offering Bronze/Silver/Gold packages or bundling other product/services together to create a more attractive proposition to the customer. Other ideas include creating weekly sales competitions with the team or simply by raising prices.



It is much easier to sell to an existing customer than it is to win a new one so effort needs to be focussed on obtaining repeat business from customers. On the assumption the business model is not to compete solely on price then the key starting point is on delivering great customer service. Any ways in which you can improve this will go a long way to bring customers back.

Other areas to consider would be loyalty schemes, using CRM to target previous customers with new products or services or to offer special one-off discounts.

Variable costs

In order to fully compound your improvements, the final area to consider is the variable costs to the business and look for ways in which these can be improved. However, caution needs to be applied here, particularly if cutting costs reduces customer service as it may well have a negative impact.

It may be advisable to review the whole sales process of the business to make sure it is as efficient as possible and remove any areas of waste that are not required. Businesses that carry stock should review stock levels to ensure the levels are not too high leading to lost working capital and potential obsolete stock. If the business uses vehicles it may be time to have a review of the fuel efficiency and repair costs, as a new/newer vehicle could be more cost effective.

The above is just a small number of ideas on how to boost performance, however, running this exercise in a team environment can produce great ideas relevant to your business and if manged correctly can produce powerful incremental benefits. If you would like to talk through this process or would like to harness the power of Xero accounting software in your business, please do get in touch.