Times are changing and so is technology, rapidly…
If your point of sale system isn’t making you money, it’s time to look at implementing a new platform. More and more businesses are moving away from the cash register and payment device combination. No more “Z-tapes” for the accountant to use.
Instead, businesses are starting to realize that the right Point of Sale system can save them time that can be used to focus on their business, help it grow, manage it properly, saving money, working with vendors, even spending more time with their families. If the right system can give you back 20 – 30 hours per month in time, what is that worth to you? How much would you have to pay an employee to do the work you would have to do during those 20 – 30 hours? Your time, especially as the business owner or operator is extremely valuable.
At minimum, a point of sale system will make it easier for you to do your accounting through basic reporting and make basic business decisions with the information you are able to harness.
The right system, designed for your business, properly implemented and used, should help you manage your business with data drive. Data can be a powerful instrument when you know how to use it. That data can help you make decisions that could save you hundreds or thousands of dollars a year, essentially paying for the point of sale system itself, before you factor the time savings and the value that has.
Your point of sale system should be a tool that directly enhances the customer experience as well as allows you to focus more time on that customer experience, both in your walls and outside of it. The right system will help you make money, not just manage it.
Below are three tiers that I have broken down Point of Sale systems into. Obviously, I cannot cover all the different features for different business type solutions available, but you will get the idea. There are significant differences between basic functions for systems built for retail vs hospitality. Assuming that those are covered, these three tiers can help guide you.
The customer experience matters. Drive that experience with technology.
The three tiers of a point of sale system.
Tier # 1 - Basic functions and accounting
This serves as a digital cash register. These systems will allow you to enter all of your items, track sales at the category and itemized level. It may be able to do inventory tracking in order to alert you when your inventory is low. Your daily reports should be used to easily manage your accounting.
Tier # 2 – Reporting and business management
Saves you time and money allowing you to manage your business more efficiently and make better decisions based on data. These systems start to deeper dive into data. More reports, for example sales reports by employees, costing with profit margins, inventory aging reports, items that are most commonly sold together all can be used to help make better decisions, target train employees and save money. Features like purchase orders, customer profiles with purchase history, stock controls and more allow you to spend more time enhancing your customer experience while letting the system do the busy work.
Tier # 3 – Strategic growth tool
Does everything that the first two tiers do but also MAKES you money through the ability to surgically market to your existing customer base and extending your customer experience outside of the walls of your operation.
You should have options or integrations that include:
Directly Text and email customers
E-commerce integrations
Loyalty, earning credit / points by shopping
Customer profiles and buyer history
Prompts to upsell during the checkout or ordering process
I like to use this example:
A retail store has to way many size 44 suite jackets. The normal way to move that inventory may look like this:
Spend money on marketing and advertising a sale on all suites - $??? (paintbrush marketing)
Put all suites on sale for 25% off (this is cutting into your margins that you would have normally made on items you didn’t need to put on sale)
Run that sale to accomplish the goal of decreasing your size 44 inventory.
When you have the correct system, the new way, the surgical way looks like this:
Look at my customer database for all customers that buy a size 44 suite jacket.
Send them an email that looks like this. “Thank you for being a loved customer of XXX store. I know that in the past you have purchased a size 44 suite. You are in luck! We have too many in stock and I want to offer you the opportunity to save 25% on a new size 44 suite jacket. Just come in between X and Y and take advantage of this special deal while you can. We can’t wait to see you again!” and below that if they have any loyalty dollars or credit built up, it will show that in the email.
That customer comes in and not only buys a 44 suite jacket, but probably some other items as well. (this way, you didn’t mark down the items you didn’t need to and you drove direct attention to those you wanted to come into you store without spending a dime of “paint brush” marketing)
Your previous customers are your best opportunity to increase sales. When you look at the cost to get a new customer, vs the cost to get a current customer back in your doors or spending more while there, it is significantly less. You can help grow your business while creating a personalized customer experience. The American consumer is incredibly loyal and frankly, that can often be one of the most overlooked area to focus on when creating that incredible customer experience that will help compete with the online experience of Amazon and others. Your customers are over 60% more likely to buy from you again if they had a great experience. You need to be able to engage with them through text and email. We will cover more on this as we explore creating a great customer experience in another blog.
I know, at this point you may be thinking, “But I have invested all this money in my current system!” I get that, I truly do. But everything still comes down to a return on investment. Let’s say you spent $3,000 on your current system, but it doesn’t do what you want it to do in order to help you grow your business; then it isn’t about the money you spent, it’s about the money you are not spending in order to grow.
Let’s say you shelve the current system, spend another $3,000 (usually less if hardware can be reused) but that system helps you increase your sales by $3,000 per month, making you an additional $700 per month in profit. Was that a good investment? Your direct ROI would be about 4 to 5 months. The indirect ROI through a greater customer experience that helps build word of mouth, could be even greater.
Other methods that may help you achieve a faster return on investment is a decrease in payment processing, or better customer service that provides a partner to help you consult and utilize that system to its fullest capabilities.
Technology is more important than ever in providing an incredible customer experience. Make sure you look at that decision as importantly as you look at hiring a manager to help you run your business. Instead of looking at your Point of Sale system as a way to ring up a customer and get some numbers, look at it as a management platform to grow your sales, save you time and make you money!