I had a major BFO this morning while reading an article in the April 2021 edition of Golf Magazine the title of which is “Engineered For Success.”  The author interviewed Paul Wood, Ping’s VP of Engineering.  They were discussing Ping’s corporate bias toward incrementalism rather than major changes to one aspect or another of golf club design.  In answer to the statement “That incrementalism takes a lot of discipline, right? It must be easier, and tempting, to jump around and tell a totally different story with every product launch.”  Part of Paul’s answer was “Huge changes – in aerodynamics, club length, whatever – always come with major trade-offs.  The way to make overall performance better is to make something better without sacrifice … you can do an awful lot with a number of small things that add up to something big.”

Wow, I thought, that is one of the major points of the ActionCOACH Business Chassis (our 5-Ways Formula).  When we present this formula, we assume that a client implementing strategies from the ActionCOACH list will be able to achieve 10% increase in all five variables of the formula.  I particularly like that the formula teaches that small, incremental improvements in each variable lead to massive results.  My BFO was to consider what can happen when improving one variable causes a decline of another variable?

As you can see in the table below, when improving Number of Leads and Conversion Rate by 10% each, the Number of Customers grows from 1,000 to 1,210.

Presentation Example Start Increase as a Result of Applying ActionCOACH Strategies Result
Number of Leads 4,000 10% 4,400
Conversion Rate (%) 25% 10% 27.5%
Number of Customers 1,000   1,210
Profit* $50,000.00   $80,525.50

*The Resulting Profit assumes a 10% increase for the remaining 5-Ways factors (Number of Transactions, Average $ Sale, and Profit Margin).

Now, to look at a realistic trade-off situation.  Let us assume a company decides to implement a very aggressive marketing campaign that is not focused toward their “ideal” customers.  In the table below that aggressive campaign results in a 20% increase in their number of leads.  However, since many of the generated leads are low quality, the conversion rate drops by 50%.  That yields only 600 customers.

Trade-Off Example Start Increase as a Result of Applying ActionCOACH Strategies Result
Number of Leads 4,000 20% 4,800
Conversion Rate (%) 25% -50% 12.5%
Number of Customers 1,000   600
Profit* $50,000.00   $30,000.00

*The Resulting Profit assumes a 10% increase for the remaining 5-Ways factors (Number of Transactions, Average $ Sale, and Profit Margin).

The point of the example is your marketing needs to be built around generating high quality leads, not just any leads.  The point of this blog is there is almost never a single thing, be it a marketing campaign, a new product or service, or a new pricing scheme, to mention a few, that will yield massive bottom-line results by itself.  In addition, you must consider all interrelated factors before moving forward with a new strategy.

If you are not sure where you should apply incremental improvements in your business, my colleagues at ActionCOACH and I have the tools and experience to assist you.  All you need to do is contact us.

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About the author,

Certified, Award Winning Executive, Leadership and Business Coach - My mission is to assist as many business executives and owners as possible to leverage their talents and experience for the purpose of maximizing the value they bring to their markets, teams, families, and communities.