I would like to have a dollar for every time I heard that line when showing ProphetLine POS software to a prospective client. You go through the whole demo and the client gets hung up on one little thing there other system did and yours does not do. All POS software products have strong points which made you select them in the first place and small deficiencies you were willing to overlook in the selection process to get the new and improved functions. The make it or break it of a POS software implementation is not so much the function of the software as the willingness of the client to change and adapt their business processes to fit the new POS Software/Retail Management System. To try and have the new software work just exactly like the old is a recipe for disaster. By the time you program for the old functionality, de-bug and go way over budget, the gains in productivity are mostly negated. When you look at the new POS software, look at the big picture and the improvement in productivity and financial reward. The POS software you select to improve your business should be 95% of what you are looking for, straight out of the box and return on investment must be your top priority.

– By Jeff Haefner

After helping thousand of retailer businesses select POS/Retail Management Software over the last 12 years, guess what I’ve found to be the most common (and critical mistake) that retailers make when choosing their software?

They don’t spend enough time evaluating the company!

Surprised?

Don’t be. It’s easy to overlook the actual company that will be providing you with service and support.

Most retailers fall into the trap of simply evaluating the actual POS software and considering the price, but they don’t come close to spending enough time evaluating the company.

So why is this so important and what should you be doing about it?

For starters, just recognize that you’re buying a relationship, not just a product. You’ll be in continual contact with your POS software company for software updates, support, training, hardware and consulting.

This is extremely important!

There are thousands of POS software companies, and dozens come and go every year. It’s important to find a company that has been established and has a solid customer base.

In addition, the company’s level of support could be the difference between a good experience and a bad one. When computers are involved, you’re bound to have problems. There’s nothing more frustrating than implementing software and having problems that the software company can’t help you with.

Let me ask you a few questions to help you understand why the company is so important…
 

• What if the POS software company went out of business? What would you do then? How much money would you have lost?
• What if the company doesn’t give you software updates when you need them?
• What if it takes 2 days to get your technical questions answered?
• What if the software has a bug and they don’t fix it?
• What if they didn’t give you sufficient training? And as a result, your sales reports are showing the wrong totals!
• What if you can’t print receipts and it takes 6 hours to get help from a support technician?

Trust me; it’s not fun to work with a software company that doesn’t have good service.

How to select the right type of company

In order to choose the right company, there are several important questions to ask your self. 

Is the POS Software Vendor Financially Stable?

It’s extremely important that the software is supplied by a solid vendor who will be around for many years.

If the software vendor has financial issues, that could affect their ability to deliver new products in a timely manner. In addition, you need a company that will be around a long time.

How can you tell if the company is financially stable? Here are a few items to consider:

• Years in business.
• Profitability.
• Increasing license sales.
• Good credit history.
• High percentage of satisfied customers.

What is the POS software vendor’s vision and future direction?

Every business has a vision and an idea for their future direction. Does that direction include marketing to your industry? Will the company continue to provide software enhancements for your industry?

You should find out the vendor’s vision and future direction. This could tell you whether this company is a good match for you.

Does the POS software vendor provide great customer service?

Many times too much focus is placed on the functionality and technology of a software company and not enough on its character. One of the first things that happen after purchasing POS software is you establish contact with the support staff.

Will the support staff answer your questions in a timely manner?

What are their hours?

Is there a manual or on-line help?

Do they have a service oriented attitude?

Does the company have honorable ethics and character?

Is this a company you will feel comfortable doing business with?

In addition, I would ask the POS software vendor all of the following questions, and then ask some of their references the same questions:

• What hours do you offer telephone support?
• How many technical support people do you have during normal business hours?
• What is the average time for a caller to speak with your technical support people or to receive a call back?
• Do you provide on-site installation assistance?

Jeff Haefner is a nationally known author and retail software consultant. He has past experience as a programmer, business consultant, network administrator, and POS software salesmen. He’s also the author of "The Point of Sale Software Buyers Guide – How to Choose POS Software and Avoid Problems”. You can learn more about his consulting services and software selection tools by visiting: www.possoftwareguide.com

By: Alan Fisher, President, Retail Business 101, alan.fisher@retailbusiness101.com

Last year, I conducted a system search for a large retailer at a municipal golf facility and I found that most POS software companies still do not understand what inventory management is. The golf course selected ProphetLine, a system that specialized in retail because the typical golf POS products could not provide a small percentage of their inventory needs. Most of these companies believe that inventory management is (1) replenishment and (2) sales and gross margin reports.

Sales and gross margin reports may be important information, but it rarely leads to any future decision. It is too much detail. Good retail management does not start out as detail management.

Could you imagine a controller or yourself wanting to review the financial performance of your business and then looking at the general ledger entries? Of course not. You review a financial statement that provides summarized comparative data to either previous periods and/or a budget. Then, if advertising and marketing expense has increased 15% over the acceptable numbers, you would try to determine what had specifically led to the increase and then decide if it was acceptable or not. If it hit the target, you would probably not be searching through the numbers. Reviewing a sales and gross margin report is tantamount to reviewing general ledger entries.

By now, I am sure you are wondering what is important for managing retail in the golf industry. The most important statistic in all of retail is the Stock Turn Rate (STR) and you should hear the Hallelujah Chorus in the background when these words are spoken. The STR measures how many times an invested dollar is sold over a year.

To simplify the understanding of this, let’s look at the life of one solitary item in a fictitious golf shop. The buyer selects a supposedly great golf shirt that costs $25 and she (since most great apparel buyers are female) intends to sell it for $75 (a planned margin of 66.7%). However, that shirt sits untouched in the golf shop throughout the entire year until someone comes in on Christmas Eve and buys it as a last minute gift for an unloved relative. On the gross margin report, the buyer can pat herself on the back about how it earned that planned $50 and 66.7% profit. Since STR is not a part of the system reporting, it looks good for profit percentages.

However, a second buyer bought the same shirt for her shop and, after four months, decided that the shirt was a mistake. So she reduced it to $40 and was able to sell (unload) it. However, this shop was able to pocket $15 in profits and reinvest the original $25 into some product that had a higher likelihood of selling at a reasonable profit. So the second product sold at $60, earning another $35 in profits and giving the shop the opportunity to reinvest a third time. At the end of the year, this shop actually looked worse on the gross margin report because it only earned 53.1% in profits. However, there was $85 in profits instead of $50. The second shop had a STR of roughly 3.0 while the first shop had 1.0.

This is the same concept as investing in the stock market. As soon as you realize that your investment is not going to earn the return by the time you need it, you dump it and reinvest in something that can accomplish both the time and the return. Your POS software should accomplish this for you automatically.

I received the following Dilbert panel (click here for full Dilbert)today from a friend stating ‘this is you’.

He’s right, but how many times have we all receive that documentary e-mail with more pages than War and Peace, no paragraphs or line breaks and is a massive clump of plain text? Then to top it off, once you finish reading it you are still unsure what it said, why you received it or even if it was to you. Miscommunication, lack of a common terminology and vague information can cause/cost lots of damage. Here are some tips from Lee Froschheiser of MAP (Management Action Programs) Consulting on communicating clearly. Read the full article and get more detail on the below points by clicking here.

Here’s the primer and some of its salient points:

1. Prepare how you will communicate.

• Clarify the goal of the communication.
• Plan carefully before sending it or having the meeting.
• Anticipate the receiver’s viewpoint and feelings.

2. Deliver the message.

• Express your meaning with conviction.
• Relate the message to your larger goals.
• Identify the action that needs to be taken.
• Confirm the other person is understanding.

3. Receive the message.

• Always keep an open mind.
• Identify the key points in the message.
• Value constructive feedback and use it to grow.
• Confirm your understanding.

4. Evaluate the effectiveness of the communication afterwards.

5. Take corrective action as necessary.

What could a quick view and single sheet of paper do for your business? Everything if this single sheet of paper can give you comparatives on vendors, items, classes, and departments. Which vendor gives you the best turn rates and sell-thrus and which department gives you the best return for you investment? Knowledge gained from your POS software will give you the information to make smart buying decisions. The typical retailer is overstocked by 10-25% at any given point in time, meaning that for every $100,000 in sales, there can be $5,000 to $25,000 (at retail) in excess inventory on the shelves. When you start looking at $500,000 in sales, the wasted investment runs into six figures. Imagine converting $100,000 of excess inventory into cash.

Controlling inventory investment is a primary reason retailers purchase POS Software/Retail systems. Properly “timing” inventory means gaining control over cash flow. A quality retail stock ledger that works hand in hand with your Open-to-Buy planning lets sales revenue pay for incoming merchandise rather than having to borrow money. Your Open-to-Buy plan serves as the “budget” for inventory, sales and purchases. The Open-to-Buy report is the “financial statement” for your inventory. With ProphetLine’s Open-To-Buy Module added to your POS software, you will be able to develop and execute your buying plan easily and accurately. With a properly managed buying plan, you can improve your stock turn rates, cash flow, gross profits and return on inventory investment. At the end of each month, you can identify and respond to trends as they develop. You can achieve optimum stock turn rates, while keeping inventories at the proper level to support expected sales.

You’ve always heard in retail that the customer is always right. Wrong! Most of your customers are always right, but there a few that can make your life miserable. The next time you receive a complaint from a customer, do a customer analysis on your POS software and find out what that customer has purchased over the last year. If all of his or her purchases total a small amount, they complain a lot and they have been sale items, you can take the complaint and throw it into the trash. If the complaint comes from a customer you find has spent $10,000 with you over the last year and the purchases were largely full retail, you need to call and ask how you can take their complaint and make it right by them. Good POS software can give you this information immediately and a remedy found that will keep the good customer happy.

POS software is always associated with good inventory and cash controls, but customer service is the difference maker. You can run a query on any period and find the customers that spent the most and deserve your full attention. How would you like to run a query and find all the customers that bought specific items during a time period and send them an e-mail informing them of complimentary inventory that has arrived and they will have a special showing. Now that is powerful marketing and can only be done when you have harvested the right information with the right POS software.

While printer drivers are becoming available for Windows Vista, a faster turn around is often needed. If you are trying to print to an Epson TM 88 POS printer and running Windows Vista, use the Windows 2000 drivers and have the abiltity to print now rather than waiting

The drivers can be downloaded by going to Epson’s support site. The site requires free registration.

When moving to a new Point of Sale (POS) Software system, most people want to move/convert data from their ‘old’ system to the new one. While this is possible with most POS Software systems, there are some things to consider and watch out for in order to make the move as easy as possible.

Label/Name fields for clarification – Although when you look at your data, it is easy to see which column is a department code, a retail price, cost, etc never assume other people will be able to distinguish the columns the same way. Always clearly label the columns to avoid confusion.

Verify data types between applications – If you used alpha-numeric values for such entries as department code, customer numbers, vendor numbers, etc. Make sure the new system can also use alpha-numeric. If it cannot, make a list of mappings to be used in the data conversion – A10 = 100, A11 = 101, etc.

Verify data as it is moved from one application to another – a common problem with data conversion is the data ‘changing’ as it is moved from one application to another. One common cause of this is data being exported to a text file, opened in Excel to verify/modify the data and then saved. Unless care is taken, Excel will set data the ‘appears’ to be numeric as a number field. This will remove leading zeros and cause issues if any of the data is alpha-numeric.

Verify hardware formatting with data – Barcode/UPC/EAN codes can be converted correctly and still not work as desired in the new POS Software application. This is usually due to hardware setup or (as stated above) data changing between applications. Barcode scanners can be setup to read or ignore check digits (as well as many other formatting options). An easy way to tell how a barcode scanner is ‘reading’, is to open Notepad, scan several items and compare the output with the barcode on the item.

In summary, verify your data and communicate in detail with your POS Software company before the conversion. You will benefit and save lots of headaches in the long run.

Many years ago, I owned a chain of specialty retail stores. The biggest problem was the ability or inability to hire good managers. Some managers were excellent at doing good work, but the stores never performed well. A few of my managers never looked like they were working hard, but they had stores that always showed good profits. The difference was that some of the managers hired, trained and maintained good employees and the other managers were afraid to hire someone with good skill sets and turn them loose because it might make them look bad. This last group of managers always looked like they were working hard, but they were doing all the work and the employees just watched and said ‘look at him go’. They were afraid to delegate and ended up doing all the work themselves and eventually would burnout. Never be afraid to hire people smarter and more skilled than you. An old saying goes, ‘A rising tide raises all ships’ and this is especially true with the good hires that make management look good.

After making the good hires, train them to do the jobs that are crucial to the health of your retail store. If they are good with technology, put them in charge of your POS software and other store systems. Those with the best personalities might be better served dealing with your clientele and handling your public relations. I had a friend once tell me, ‘It’s not the ones you fire that hurt you; it’s the ones you keep that hurt.’ Don’t be guilty of just holding status quo and allowing now-caring employees bring your business down, always look to up-grade and hire smarter people than you.

When you pick up the paper and read that the Dow is up or down, consumer sentiment is high or low, corporate profits are good or bad, they obviously aren’t talking about the small retailer. Corporate America’s stock value is directly tied to last quarter’s profits and forward thinking estimates of future earnings. Small retailers have a definite advantage in that they can think about long term planning without worrying if they are going to hit this quarter’s projections. Big business’s answer to more profitability is another round of cost cuts, which usually means job layoffs. ProphetLine is a small POS Software company that always plays to its main strength, which is being able to adapt quickly and nurture niche markets. Microsoft can’t be beat by our throwing more money at a marketing plan, but we constantly convert their customers to our POS software because we can cater to small business and their specialized needs. Small companies with fewer than 5oo people make up 52% of the private sector work force and were responsible for 51% of the nation’s gross domestic product, but when you read about innovation in technology, it’s always technology that only the big can afford.

Yesterday’s paper had a large article about price optimization software built by SAP and Oracle and the starting price tag was well into the millions. Small retailers can’t afford this, but they can take good data from their POS software, develop an inventory budget, build a purchasing plan and rely on the most important asset they have, their gut instinct and knowing their customer demographics. Wal-Mart tried to up-scale their apparel lines and better compete with Target. They later found out this was a mistake and it will take them better than a year to clean up the mess. You, the small retailer, can clean up your mistakes quickly with markdowns and sales and re-invest that money in quick turning inventory. Small business is always ignored by the government, corporate analysts and the reporting newswires. Flying under the radar can be good if you know your strengths and play to them.