“Compounding is the greatest mathematical discovery of all time.”


Albert Einstein

The 1%er Philosophy

The 1%er philosophy has many different definitions and names. The mathematical term is "compounding". The Japanese call it "Kaizen": Small incremental changes along each step of the process achieving a more significant result in the end. The sales process has a number of steps between the introduction and the close. Increase just five steps of the sales process by 5% and you can double your sales/revenue as per the below example.


The practice of compounding forms the foundations of every successful athlete, sporting team and big business. By using this method not only are you able to see where you're situated and what you can improve but also have the ability to forecast and set the specific targets needed to reach your goals.

As a start use a sales chart (or sales pipeline as it is often called) and start filling in your own steps and conversions. 


The "A" field should be your Targeted Audience represented by the number of potential buyers in your market. If you are unsure how to find this number consider your demographic, geography and possibly the time period you're working within. If you're in real estate you would look at the number of houses listed in an average month for your region. If you're selling coffee from a cafe it might be the total amount of people who drink coffee each day in your local area. You can use industry research, your own research and even Facebook's advertising audience quotes to help. Sometimes the targeted audience number is hard to accurately quantify so my suggestion is reach your figure as best as possible given the resources you have. Put your best foot forward and give yourself the best chance possible. Don't skip this step because it's too hard; it's a "must do".

In the "B" field write the total number of prospective clients/buyers that have an Introduction to you or your brand. This can be organically (repeat and referrals) or through your marketing including someone walking past your store. Any connection of any degree is considered an Introduction. Also write down the conversion rate (as a percentage) from those in your Targeted Audience converted into Introductions. 

The "C" field is the Qualify step and is the total number of prospective clients who have entered into a conversation with you in any way. This can be direct, e-mail, phone, Skype, messenger, LinkedIn, etc. Once again find the percentage that have converted from the Introduction step to the Qualify. 

In the "D" field write the number of prospective clients that have moved into your next step, whatever that may be. In the example at the top we have listed the next steps (in order) "Test Drive" (try before you buy), "Pitch" (proposal) and "Won" (sales won). Some businesses may add a few steps including "Close" (asked for the sale), "Average Price/Profit" (price or margin) or "Add Ons" (added extras). Either way, once again, write the number of prospective clients that reach this step during the nominated time period and that conversion rate for one step to the next.

The more meaningful steps you can add the more areas you have available for improvement and the more 'compounding' you can do. Therefore the better results possible.

Now you have "where you are". Next is working out "where you need to be". To do this write the total sales 'Won' or the total revenue you would like to achieve o reach your own 'success'. Now start working back down the pipeline. After you have identified your conversation rates you now need to confidently make a call on the potential increase in the conversion for each step you have nominated. How do you know what the potential increases are? Well this is the hard part and I have some suggestions below. For now add 5% to each step as a minimum and check your results. 5% is only an extra one in twenty converted from one step to another and if you're new to pipelines and the road to the sale an extra one in twenty is VERY achievable. 

To harness your potential increases accurately, I would firstly suggest brining on a business manager or business coach to go through your business practises and sales process. Their experience can save you years of working it out yourself through trial and error. 

Here are a couple of things I can suggest that ALL businesses need to do:

- Use a customer relationship management program (CRM). A CRM takes the assumptions and your own hazy memory out of the equation when identifying who your clients are, what you need to do next, schedule tasks and know what influences their purchasing decisions. If you aren't using a CRM go get one now! Just having it and using it well will increase your conversions by a minimum of 5%. I use Pipedrive (link) which not only gives you all your CRM abilities but it also gives you step conversion rates and the opportunity to add custom fields.

- Spend more time on your conversions north of the Introduction step. Too many businesses focus on their marketing efforts to convert more potential business from the Targeted Audience to the Introduction. Unfortunately this is the space all your competitors are fighting for as well. Maximise the clients you have from the Qualify onwards by focusing on increasing the conversions of those steps first.

- Ask for the sale. Simply by asking for the sale every single time will significantly increase the business you'll win. You'll be surprised how many customers go through all these steps only to walk away because they weren't asked the question. Add this practise and convert at least a third of the sales your losing between the Close and Won steps.

- Create a sense of urgency. Salespeople do an incredible job of convincing a customer/client they need their product or service but how often do you convince them they need it now? Creating a sense of urgency isn't easy but essential in maximising your Close conversion rate. 

- Qualify, Qualify and Qualify some more. Once a potential customer/client and you are having a conversation the information you gather from that Qualify step is not only essential in finding out what you need to know about converting that individual along the sales process but also helps in identifying specifically who your Targeted Audience is for future marketing. It will also help find what form(s) of Introduction are working best for you and applying these learning in your future prospecting.

- Keep a record of everything. Keeping a record of everything obviously serves a purpose for your pipeline, customer relations and increasing sales through compounding. What a lot of businesses don't realise is that it also adds enormous value to your business if you were ever to sell or pitch to an investor. If you can show a potential buyer or investor where you are, where you could be and how you can get there it will add a tonne of value and confidence to the sale.


"There is no use chasing rainbows while walking past pots of gold."

A. Witty

Often salespeople and businesses find themselves chasing "that one big client" or looking for that "one great marketing idea" to skyrocket them into success. I call this "chasing rainbows". Instead take stock of what you have, the potential you possess and through compounding you'll discover there are 'pots of gold' to be found right under your nose. You just need to know where to look and the right way to dig them up.


The Sex Of Selling philosophy is exactly that. It teaches you where to look (through identifying conversions) and how to get your hands on that gold (by understanding the application of the sales process).

"People will buy on a vision and pass on an idea."

A. Witty

"The Sex Of Selling"
@ Warehouse No.5 (Burleigh Heads)
14th August, 2017
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