With so many IT workloads moving to the cloud, there’s never been a better time for IT solution providers to offer as-a-Service solutions to their customers. However, making the switch from selling traditional point of sale (POS) systems to subscription-based solutions requires careful consideration. We spoke with Jason Feemster, owner and operator of SaaS solution provider Point of Sale USA, to get his advice on best practices to follow and pitfalls to watch out for when selling POS Software as a Service (SaaS).
What advantages does POS SaaS offer end users?
There are many, but I think the most considerable advantage is centralized management for all aspects of the POS software from anywhere with an internet connection. This means users are no longer reliant on a local server at the location, which also reduces upfront costs, ongoing maintenance, and security issues. With SaaS, you always have a backup of your data because it’s stored in the cloud. So, if your tablet or computer hardware dies, you reinstall the app on a new device, and you’re back in business.
Also, pricing is pretty straightforward with the SaaS model, so users have an easier time understanding the cost associated with the software. Most SaaS companies avoid long-term contracts or commitments, so users aren’t locked into a system that doesn’t work for them or they flat out don’t like.
Are there certain types of businesses that are more likely to purchase it?
The small to medium-size business market seems to be an excellent fit for a SaaS solution. Large companies and chains tend to lean towards the more traditional solutions. However, even most “traditional” POS systems have some hybrid-SaaS capabilities, such as local software combined with remote SaaS capabilities.
Do you find that merchants are more comfortable with the idea of POS SaaS than they were a few years ago?
Yes, the market has moved this direction over time, so customers are more familiar with this solution and are requesting mobile-based SaaS products.
Are there any objections to it? How do you overcome them?
With so many options on the market, the price can still be a concern. It’s essential to explain all the benefits and what sets your software apart.
I think the most significant objection isn’t necessarily an objection but a necessity. Fast internet connection speed is required. Most SaaS POS software will require a minimum internet connection speed to function correctly. Solution providers should also provide failover internet services if the primary internet service goes down. The downside is that it adds additional costs to your offering. To overcome this potential objection, you need to convey to your customer the importance of maintaining business continuity.
Besides price objections, some SaaS solutions may lack some of the features customers are used to with traditional POS systems, so be careful there. It’s best not to sell a solution if it doesn’t do what the customer expects and needs, or you risk having an unhappy customer.
How does selling POS SaaS help your business, with recurring revenue or otherwise?
If you package everything with merchant services, hardware, installation, support, etc., you can make good money offering these services. We have some high credit card processing residual income we’ve built up over the years. We no longer sell hardware or perform any installations due to the time and overhead associated with both. Many SaaS providers have moved in-house cutting out dealers, so we pivoted and now primarily generate leads for POS companies. For the products we do recommend or sell, we’ll receive bonuses and residuals and let the SaaS company provide all services. We essentially hand off the customer and let the POS company handle the rest.
Our audience comprises VARs and MSPs — what advice would you give to someone new to selling POS Software as a Service?
Don’t oversell on features. Learn the product inside and out. Go through the training and use the software on your device as a customer would. Understand the benefits and limitations of the software and feature set.
Be prepared for support. If you can outsource installation and support with the POS company and focus on selling, you’ll save yourself a lot of stress and headaches. If you sell someone a system, you’re going to be the first person they call when it doesn’t work, so set expectations right off the bat for support-related issues.
Do you see a time when all POS software will be sold according to this model, or do you think there will always be on-premises solutions?
Due to the limitations of internet availability, speed, and reliability, I think there will always be on-premises solutions. Some customers would prefer to pay a one-time cost for a POS, and not have monthly fees associated with SaaS. Some users aren’t very tech-savvy and would rather use a good old-fashioned cash register, so there’s that, too.