PlazSales CEO Jeff Minnis is in an enviable position. A technology solution provider (TSP) and point of sale (POS) system provider, he has the capability to provide clients with all the IT systems they need to run their businesses — bona fide total solutions. Furthermore, Minnis has developed his own Point of Sale (POS) Software as a Service offering.
For POS solutions providers and managed services providers contemplating offering POS as a Service, Minnis offers these four pieces of advice:
1Run the Solution on the Right Hardware
Minnis says his software, like other SaaS offerings, can run on a variety of POS hardware, but providing a standardized hardware and software package is a better strategy for his business. “If a customer wants to use their current hardware, it may take a big investment of time and resources to make it work. When it comes to the cost to your business, you might as well just provide them with new hardware,” he says.
2Choose the Right Customers
Minnis says most businesses that he works with opt for the POS Software as a Service model. “More customers are open to it than in the past since many other products are offered that way,” Minnis explains. “It’s common now, and internet service is more reliable, so POS as a Service can work successfully.”
He says some clients, however, typically veteran business owners, still want to purchase a software license and run on-premises POS software. “Some of them do come on board, however, when they realize the value,” he says. The biggest influence on that decision is bundling a hardware and software package with service. “If a company wants support, they realize they can have everything for one monthly fee,” Minnis explains.
He advises POS solution providers, however, to be selective about the customers they work with and not spend valuable time accommodating customers that want you to deviate from the business model you choose. “If we sell a system outright, by the time we add up installation costs, training and support for a few months to ensure customer satisfaction, and hardware margins are small, there’s really no profit.” “We go after companies that want POS as a Service,” he says.
3Look at Customization Through the Lens of Recurring Revenue
Minnis says that customizing solutions for specific clients is an easier decision with the POS as a Service model.
“It’s not logical to spend money on customization if you’re only making a small amount of profit on an upfront sale,” he says. “With POS as a Service you recover those costs over time.”
4Own the Whole Account
Minnis comments that when he considers his competition, many only handle one part of the IT a business needs rather than offering a complete package. Because of his team’s broad range of expertise, he says his business offers POS Software as a Service, total POS systems, managed services for their IT systems — “pretty much all of their IT needs.” Minnis says to only offer a part of an account leaves the door open for another provider to establish a relationship with that business.
“It also helps with customer retention and expanding accounts,” Minnis says. “When you’re providing services on a regular basis, customers come to you to add products and services.”
He also sees an advantage in a local TSP providing POS Software as a Service. “A lot of businesses like working with a local provider. They want an affordable option with all the features they need from a provider who knows their business,” he says.
“There are a lot of retail and restaurant businesses out there that need help,” Minnis points out. “This is a way to differentiate your business.”