Running a service business is not easy: margins are tight and you can never be too efficient or know too much about your business. Sophisticated POS (Point of Sale) systems provide reporting that helps owners and operators become more successful. Data is king, if you know what to do with it. Modern POS systems can also share insight into customer buying habits and patterns, control inventory and operation costs, labor costs and manage online reservations. For instance, many POS systems are able to manage a customer list, says Robert Bethge of Perka. Understanding who your best customers are, how frequently they visit and how much they spend when they do purchase is vital to being able to recognize, and reward, your most valuable customers.
In order to get a better understanding of POS systems and their potential, we asked several experts in the industry a few questions for operating a lucritive POS system for your business.
As powerful as a good POS is as a way to collect money, what are other key tips for either generating more income or providing cost-savings to operators? Duessa Holscher of Coffee Shop Manager offers this valuable tip: “To generate more income, you need to focus on selling more to your customers during each transaction, bringing your customers back more often, or gaining new customers.” Attention to the customers habits is a must, because you can specialize on each individual customer‘s favorite beverages.
Speaking of individualized attention, social media is another good way to reach out to people. David J. Gosman from pcAmerica says to be social. More than ever, social sites like Pinterest, Twitter and Facebook are influencing how people make choices. Also, he advises to incorporate Online and Mobile Ordering, which can occur through a computer, tablet device or even a mobile phone, allows customers to order in the fashion most convenient to them, meaning more business for you.
How does a POS system reduce operational costs?
Sophisticated software can improve accuracy of orders and track inventory to reduce waste. But the system itself costs money, and owners should put its cost into consideration. “A store owner should evaluate the ‘cost of ownership’ which would include the cost of the system, setup, maintenance/service contracts and annual software fees,” says Glenn Deal of Casio America.
But, after installing a POS system, it should pay off when owners begin to see more money as a result of added efficiency. For instance, Jason Richelson of ShopKeep, points out that if designed right, POS systems automate all of your reporting, so merchants can look at their store data in ways that are actually meaningful. Likewise, Jeff Schaeffler of Vivonet says that “tighter control of product being sold, discounts being given, increased accountability and safeguards that come with a POS system can sometimes pay for itself. Monitoring and managing labor costs is also critical to your restaurant’s profitability. The cost of labor is the second-highest cost in the restaurant business. Modern POS systems give owners the ability to develop a more comprehensive strategy for managing labor costs with precise forecasting software in real-time.
How can a POS system help increase store traffic?
People don’t like to wait in lines; the longer a customer has to wait in line, the less likely it is that they will return to the store. A good POS system will move the lines quickly. “They can increases order accuracy, helps decrease wait time, and can provide digital signage which creates entertainment for customers while informing them about your products and promotional items,” emphasizes Louise Casamento from MICROS Systems. Additionally, Jason Richelson from ShopKeep POS believes that having an efficient and simple point of sale system allows cashiers to do more transactions than normal, keeping the line short and the customers coming back.
Both Robert Bethge of Perka and Mike Spence of SelbySoft agree that POS systems can also be used as marketing tools to increase customers. As part of an integrated store management program, owners and managers can use today’s POS to understand day parts, vist patterns, and which are top selling items. Online ordering and reservations solutions that are integrated to a POS can prove to be highly effective in helping to increase sales. Another way to increase traffic is to impliment a happy hour program, if you own a liquor license. This way, you will bring new customers who want to wet their whistles, and hopefully will want to return.
Shannon Arnold from Maitre’D offers 7 Tips to build better profits with a POS system:
• Control food costs
• Monitor and improve kitchen productivity
• Reduce theft and shrinkage
• Manage labor costs
• Boost up-selling
• Save back-office effort
• Manage multiple locations more effectively
How does a POS system related to a loyalty program?
Loyalty programs are incentives for customers who are just that – loyal customers. It is a win-win situation. Retailers acquisition of information relating to their customers’ spending habits, while the customer receives discounts for their continued patronage. Where do POS systems fit into loyalty programs?
Robert Bethge at Perka extolls the virtues of our digital age. “Digital and mobile loyalty programs are increasingly popular in all types of small businesses and local shops,” he emphasizes. “When a merchant uses a mobile loyalty system that connects to customer smartphones, its possible to not just count how many visits each customer makes, but very specific information about how much they spend and when.” Robert advices that merchants should learn how regular customers behave different than VIPs or just the occasional visitor. With loyalty programs, again we see that data is king. “Managers who use numbers to make decisions really value having the actual purchase amounts associated with a customer visit,” he says.
“Customers love reward programs and are increasingly growing to expect them in their favorite shops and restaurants,” explains Duessa Holscher of Coffee Shop Manager. “With a loyalty system that’s integrated to your POS, it’s easy to record specific transaction data.” As Jeff Schaeffler of Vivonet points out, a retailer can identify what and when an individual customer purchased through that transactional data. Integrating this buyer behavior into a loyalty program allows restaurants to deploy offers that will have much greater appeal in a more targeted manner.
Shannon Arnold explains that some POS Systems offer a built-in integrated loyalty program. But, she warns, the challenge with a loyalty program is ensuring that it contributes incremental sales and does not discount sales that you would have gotten without a loyalty program. By using POS data, you can gather more accurate information including specific times of day.
What factors should be taken into account when selecting a POS?
“Budget would probably be number one,” says of Glenn Deal. “Make sure the systems you are evaluating meet your needs to run your business efficiently.” David Gosman agrees with the idea of efficiency being priority: “A good POS should offer productivity tools that boost efficiency within the business.” A POS system should also meet certain criteria. Duessa Holscher thinks at it is critical that any system you choose is PA-DSS certified for PCI Compliance, which means it handles credit card data in an approved way. Jason Richelson suggests to do your research and make sure that you can talk to your POS provider if you have any questions. “The last thing you want is to invest in a POS system that stops working and you have no one to call and help you,” he advises. And Sean Connors emphasizes ROI (Return on Investment) instead of PRICE. From a financial standpoint, the buyer needs to evaluate the potential ROI of the system instead of simply comparing prices.
Adding a POS system can be pricey, but it can also lead to expanded business and more revenue. Consider the following before installing one into your store: Create a budget, identify your needs and know your customers. Once you have made the right adjustments and are ready to purchase a POS system, make sure you first research companies who sell them and request a demo. You can also find reviews online as well as other companies who use their systems. They are powerful tools for refining your services as well as your bottom line.
We were not able to include all point-of-sale and loyalty system vendors and equipment vendors in this article, for a complete listing please go to yellowpages.coffeetalk.com.