Merchants Demand ROI from POS (point-of-sale)
In today’s climate, merchants are faced with migrating from a cash register to a POS system or upgrading from an antiquated POS system to a current state-of-the-art POS system. Does the decision represent a significant cost or a wise investment?
It really depends on two issues. One is the perception of the merchant making the decision. The other is the performance of the vendor the merchant decides to engage for a POS solution. Those two issues can be debated from many angles. So, let’s break it down to simplest form by definition.
The definition of COST = an amount that has to be paid or given up in order to
get something.
The definition of INVESTMENT = the investing of money or capital to gain profitable returns or appreciation in value.
POS systems and POS vendors come in every shape and size. It is typically top priority for the merchant to find the system that provides the best operational fit at a price they can afford from a vendor they can trust. Those three items add up to the merchant's perceived value in the POS investment. However, with those three criteria, is the merchant viewing the POS as a "cost" or as an "investment?” More importantly, is the vendor providing the POS solution viewing the newly acquired merchant as a “new win” or as a “new Partner.”
It is a two-way street and should be treated as such by both parties. Specifically, the merchant
should consider how much risk is involved just like he or she would with investing in inventory, marketing or human capital to benefit their organization. The POS vendor should allow for the merchant to make this decision without a significant risk while at the same time, provide all the
evidence necessary to make sure the new partnership is a good fit and a “win”
for everyone involved.
As with any buy/sell situation, the onus is primarily on the buyer. It’s all about risk and reward. So, merchants should ask themselves the following questions prior to making the decision to either purchase their first POS system or upgrade their existing POS system:
- What is the risk involved? Could I possibly spend a bunch of money and gain very little?
- What is the reward involved? If I spend $x, what is my opportunity to gain $x as a direct result of the initial spend?
- Will my investment continue to grow over time? Is the vendor committed to research and development?
- Am I losing money because I have not made a decision?
The bottom line is still the bottom line. That is why we all do what we do. So, deciding on a POS solution is just like any other business decision. The result of the decision needs to increase the bottom line through:
- Gained Efficiencies (speed of service)
- Reduced Losses (inventory and pricing controls)
- Increased Repeat Revenues (targeted marketing based on POS data)
- Low Risk (little-to-no upfront investment or commitment by merchant)
- Shared Goals (partnership between merchant and POS vendor focused on growth)
If a merchant can find these five attributes in a search for a POS solution, I feel it is safe to say the merchant has found a wise investment in place of what is often misconstrued as a significant cost.
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