What is the Elements.app anyway?
(About a 7 Min Read)
There is nothing new in business fundamentals.There is lots of window dressing commentary but try to have a successful business WITHOUT sales and see what happens.
If you do not make sales; you do not survive.
Everything depends on that basic fact.
Sales generate cash inflow;
cash inflow is revenue;
revenue less expenses equals profit;
profit times multiplier generates company value.
But what exactly are sales? Or rather, what are the components of sales? And how can they be measured accurately and timely?
Something has to remove the mystery of what makes up a “sale”. These concepts are commonplace to company coaches and mentors. But they have never been obtainable in an easy to apply format for the business owner. Cloud technology now enables the data to be readily available so we need a tool to quantify.
We have just made the invisible visible. The business owner can see the outcomes from past strategies and tactics. We have to enable the business owner then to set out a plan to go forward. No more static, obsolete reports for the SME business owner. They are up to speed through online notifications.
The tool must do nothing with margins. That's an area that is well resourced and understood already. SMEs have to remember that there is "offline" marketing - anything not online. The tool is for businesses that:
- use cloud accounting.
- have identifiable clients. (or potentially identifiable clients ie. loyalty systems)
- have low to medium levels of transactions.
In marketing the buzz word is "online" and there are lots of apps providing feedback for internet businesses. However if there is one thing the current circumstances have shown us is that a human being is a social animal. People like contact. Computer mouses have not completely replaced shops - yet!
It is for monitoring the offline marketing tactics of the business, not the online. We unapologetically deal only with sales.
We want to compare data from only at sales and credit notes between periods. The business sales database has: Reference # Transaction Date Client Name Transaction type Sale Value
The business wants to analyse historical sales data. The business derives meaningful trends from reviewing past data so more data the better. In the Growth section we monitor what we refer to as “handles”.
- active clients
- average sales value and
- number of transactions
Income = Active Clients x Average Sales Value x Number of Transactions
These three handles when multiplied together generate revenue. Until now, the business owner put sales tactics into place and crossed their fingers, hoping for an increase in revenue.
They were stumbling around in the dark hoping for the best outcome. Company coaches talked of manipulating sales components so that the business could increase or decrease sales as they saw fit.
But there was no immediate feedback loop. Tactical analysis of the outcomes was inefficient and slow. With elements.app the business owner only has to look at their mobile phone to find out how their plans are trending at any time.
The business owner can decide to initiate, tweak or abandon any sales tactic with a hundred percent confidence. When the tool is first interfaced to the cloud accounting package, the business owner and the coach can see the historic movements. The business owner is intimately familiar with their business and can easily explain what happened for each movement. The owner can now see what really caused movements in Revenue.
The owner and professional advisors see value in the elements.app tool immediately.
Elements.app highlights any significant peaks or troughs in these graphs. These movements align with occurrences in the business. As an example, one user upon observing this information, commented: Elements.app showed that the number of sales were up but the average sales value was down. I had a great salesperson who maintained incredible relationships. The average number of sales were well up. The salesperson won company awards. Unfortunately he sold on price rather than value. The average sales value plummeted. Elements.app Growth graph shows that it does not really matter where you start with improving your business - anywhere will give you a result immediately.
The business can sets targets for the three handles: active customers average sales value and the number of transactions based on historical data.
This is no different to the traditional budget process that accountants and bookkeepers use for expenses so there's not no “learning curve”.
To begin, the business owner picks any one component to improve their sales strategy. The Growth graph shows that it does not really matter where you start with improving your business - anywhere will give you a result immediately.
This could be as simple as wanting to: increase the number of Active Clients by contacting past clients who had not purchased again recently or Increasing the average sale value by introducing an upsell program ie. would you like fries with that?
The business owner and the professional advisor can now sit back and monitor their success. The tool provides meaningful information immediately on the next transaction. It is that quick. The business owner can then move on to more advanced scenarios involving tactics for two or three the handles and watching how they progress. Ensuring that the tactics are appropriate and analyzing the outcomes is where the value of the company coach or mentor will become important.
In the Focus section, the business owner finds out the lifetime value and traits of their clientele for any period. Clients are grouped by: great average and poor. Pareto’s law suggests twenty percent of clients generate eighty percent of income. It is fractal, that is twenty percent of twenty percent or four percent of those clients generate eighty percent times eighty percent or sixty four percent of the income. Elements.app does this online and in real time so you know who your best clients are all the time.
With Elements.app the business owner gets Notifications daily, weekly and monthly on their mobile phone, their tablet or their notebook more than just total sales revenue but what "handle" has moved and if the nature of buyers have changed. The business owner does not have to analyse reports; they get the information reliably and in real time.
Business owners may not have known of Growth components nor Focus groups, let alone be able to measure them. Now they have the data available at their fingertips.
The Elements.app tool interfaces to the communication app “Slack”. The business owner one can be in constant, non-intrusive contact with internal stakeholders, sales managers, sales people and external consultants all receiving information tailored to their requirements. Selected recipients can receive specific notifications in real time.
The business has a complete record or audit trail of all sales and marketing discussions, procedures and outcomes. Elements.app currently integrates with Quickbooks Online. Reckon, Xero and MYOB. but watch this space more to come. That's all I've got for you today if you're interested in checking out elements click on the link in the box below otherwise look at some of our other videos that we've got going.
Elements.app is a tool for growth for the SME business.
Co-Founder at Elements, Retired CPA and Company Coach with 35 years of experience building better businesses.