Guest Post – Choosing the Right POS System
By Dave Cunningham, Director Partner Product Sales, iPayment, Inc.
“Your success in life isn’t based on your ability to simply change. It is based on your ability to change faster than your competition, customers, and business.” –Mark Sanborn
Every Time a Bell Rings…
In 1879, John Ritty, a saloon keeper in Dayton Ohio, invented the cash register. Ritty’s barkeeps handled the cash and he was tired of them stealing. He designed the machine so that when the total key was pushed, the drawer opened, the sale was tendered and a bell would ring. That alerted the manager to a sale taking place. So “ringing up” a sale back then was basically a signal to ownership that the money was going in the till and not the barkeep’s pocket. His invention was revolutionary and sales of the device took off. In 1884 a man named John H. Patterson bought the cash register business and renamed it the National Cash Register Company (NCR). One hundred and thirty-eight years and millions of cash registers later, not much has changed. You hit the button, a sale is tendered and a bell rings.
Today’s point-of-sale (POS) systems perform all the functions of a register (without the bell) and they also offer businesses simple solutions to complex and time consuming business needs like scheduling, tax calculation, inventory management and control. They free up time and allow time to gather and analyze customer and sales data, which can lead to real growth. No matter how many times someone hits the sale button a cash register, it can’t do anything but ring a bell, tender the sale and hold the cash.
In any business change is critical to survival. The change from an outdated cash register system to a more modern POS system could not only save a business, it can single as be a key component to growing a business.
Let’s take a look at some of the fundamental things you should consider when moving from 1879 to the present.
20 Questions
“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” – Bill Gates
As a business owner or manager, if you don’t understand your business, it’s going to be tough to identify which POS solution is right for you. Failure to adequately determine your businesses requirements and weaknesses could result in the purchase of a system that’s more complex and expensive than necessary or worse one that under performs.
What type of business are you? Are you retail or restaurant or service based?
What features are important to you? Scheduling, menu, analytics, inventory, training, support – different systems offer significantly different options.
What are the problems with your current system?
What business issues would you like the new system to help solve?
How much do you want to spend? Consider not only hardware costs, but monthly maintenance, support and software or application expenses.
There are other basic considerations for any system and any business. The system should include integration for analytics, inventory management, loyalty programs, social media and email marketing. These applications and tools will be essential in helping you manage and grow your business. Don’t overlook training, service and support (more on that later).
Answering these and other questions accurately while evaluating integrations, service and support will help you set some goals that will make it easier to choose the right system. You want to ensure that your choice magnifies your businesses strengths and opportunities not its weaknesses.
Ignore Them and They’ll Go Away
“The customer experience is the next competitive battleground.” – Jerry Gregoire
Customers, they’re the most important part of any business. A POS system that allows you to create a good customer experience will increase customer retention and drive repeat business. If you don’t already offer gift and loyalty card programs, now is the time to do it. Gift cards are a great revenue source and can eliminate cash tender type returns. Loyalty programs increase the likelihood of return visit and data gathered from a loyalty program can give you valuable insights into your best customers and their purchasing patterns. Integrated and easy to implement gift and loyalty programs should be a key consideration when shopping for a POS system. Make sure the system you choose has solid offerings.
Cloudy with a Chance of Success
“With the cloud, individuals and small businesses can snap their fingers and instantly set up enterprise-class services.” –Roy Stephan, 2011
There are tremendous benefits to cloud-based POS systems. They eliminate the need locally installed software and the associated expensive upgrades. These systems are quickly becoming outmoded by the ease of use and utility of cloud based solutions. Working in the cloud makes upgrades quick and inexpensive (in some systems operating system software upgrades are automatic and free). Cloud based systems also assure that your critical data is secure in case of hardware failure or theft. They can drastically improve your visibility of the data necessary to effectively run and grow your business and allow you to interact with your customers and create a great experience. Unless you’re running an enterprise level multi-location business (and even then, large companies like Whole Foods, Starbucks, Goodwill and Adidas are increasingly moving to cloud based systems), a cloud based system is the way forward.
Hold the phone
“If your plans don’t include mobile, your plans are not finished.” – Wendy Clark, Coca-Cola
Sales don’t only happen when people walk into your business. The buying process now starts as soon as the consumer opens an email, text or scans an item, or even sooner.
Consumers use their mobile phones to comparison shop and obtain product information. Smartphones with barcode scanning software and Internet access have permanently altered buying behavior. Smartphones allow today’s consumer to quickly and easily compare prices in a store or online, or locate an item that is out of stock. The trend of consumers going to “brick and mortar” stores to examine products and then shopping online for a lower price is prevalent enough that retailers to have coined the term “showrooming” to describe this type of shopping.
In a study done by the Federal Reserve, 42 percent of consumers say that they have used their mobile phone to comparison shop on the Internet while at a retail store, and 32 percent have used a barcode scanning application for price comparisons. 64 percent of those surveyed report that they changed where they made a purchase after comparing prices, and 70 percent report that they changed what they purchased because of reading product reviews on their phone while in a retail store.
Make sure the system you choose has the tools to let you engage with your customers through mobile technology and give them what they want when they want it.
How Sharp is Your Ax
“If I had nine hours to chop down a tree, I’d spend the first six sharpening my ax.” -Abraham Lincoln
The adage about proper planning and poor performance can’t be understated when implementing a new POS system. Once you’ve made a choice, you must make sure that it is implemented properly and your employees are well trained. Your employees will play a crucial role in the systems success. Make it clear to them the impact that the new system will have on them and on your business. The biggest mistake most merchants make during implementation is not allowing enough time for the transition and training.
A properly implemented the system can:
- Eliminate manual errors in addition and pricing.
- Improve production and reduce shrinkage and waste
- Eliminate bookkeeping errors and substantially reduce accounting and bookkeeping time
- Facilitate active marketing through social media
- Choose and manage a loyalty program that’s right for your business
- Easily sell and accept gift cards
- Increase sales revenue and profitability
- Automatically calculate and pay sales taxes
- Manage employee schedules, timesheets and payroll
- Track sales of top products and customers
If you and your employees don’t have a full understanding of its use, strengths and limitations it will be very difficult to leverage the systems capabilities and benefit from them.
Who You Gonna’ Call?
“Customers don’t expect you to be perfect. They do expect you to fix things when they go wrong.” – Donald Porter
How much support do you need? Most businesses using a POS system are usually open more than 9-5 Monday through Friday. If this is the case for your business you should make sure that your provider offers service and support when you’re open and might need it. Most systems offer 24/7 phone support, but some don’t. More advanced systems should offer onsite service and support. Service and support aren’t necessarily free. Make sure you have a clear understanding of what your warranty covers and what it doesn’t.
How Much is Too Much?
“Price is what you pay. Value is what you get.” – Warren Buffett
Weighing the cost of the system versus its benefits can be challenging. Like most businesses, you probably don’t have an unlimited supply of capital and you should set a budget at the outset. Remember that low cost is often the result of minimal investment and will mean less technology, quality, experience and accuracy. This makes the real cost more expensive for you and your business. Price will be an important factor in your choice, but it shouldn’t be the only factor. The value of the solution to you and your business should be the ultimate determining factor in your choice.
Decisions, Decisions
“No matter how happy anyone is with their choices, I believe it’s human nature to wonder about the path not taken.” – Jen Lancaster
Ultimately the success or failure of any new initiative in business is determined by its planning, preparation and implementation. If you’ve done your due diligence, asked yourself the hard questions, set goals and determine a budget you can choose confidently and begin to take advantage of the benefits these systems offer.
Whatever decision you make, I’m sure Mr. Ritty would approve.
The views expressed in the posts and comments of this blog do not necessarily reflect those of ETA.
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