Sell Yourself With POS

Options for VARs selling POS (point of sale) peripheral hardware continue to expand. Users are focused on hardware that offers better convenience, ease of use, and even enhanced security. Despite the advancements in hardware, however, profits from hardware sales alone remain somewhat static. VARs wishing to remain at the head of the pack must continually find ways to distinguish themselves from their competition and resist the urge to compete on price point alone. With that in mind, I set out to ask four industry experts what advice they had for their channel partners.

Do You Really Understand Your Customer's Needs?
Some VARs have focused on getting the cheapest peripherals rather than differentiating the service they offer. This can be a key advantage for VARs willing to do their homework to identify and truly understand the needs of your target market so that you can determine the best products to meet those needs. "Obviously, proper planning and research are a must," says Catherine Shergi, regional sales manager for MMF Cash Drawer. "Understanding all the goals the customer hopes to achieve — for example, knowing how to improve transaction processing time or address potential ergonomic considerations — will go a long way in helping you set yourself apart."

Step one of doing your homework is monitoring the developments that are going on in the market around you. "VARs need to stay up to date with current trends and be able to offer customers creative solutions to their problems," says Bob Daugs, business development manager for APG Cash Drawer. "Some peripheral suppliers have gotten stronger, better, faster, and more innovative in what they do. New ways of doing things have been introduced, such as flip-top cash drawers, digital signage, portable POS stations, and even biometric readers for added security."
Because POS peripheral choices are expanding, step two becomes developing strong relationships with vendors and distributors. "Peripheral manufacturers who specialize in one technology will naturally stay on top of all the new standards in POS and consistently find ways to improve their product," says David Michielli, marketing manager at Cherry Electrical Products. "In most cases, a manufacturer can offer selling tools for specific applications, and the VAR can use these tools to help bolster the sale and show it did its homework."

Step three in doing your homework is determining the operating environment in which the POS solution will be placed and selecting peripherals that are most strongly suited to that environment. Are you selling into the typical clean and dry retail environment? Or are you selling into the dusty, dirty environment of a seasonal garden shop or greenhouse? Some peripherals may hold up great in damp conditions, but be prone to failure in dusty or dirty areas. "VARs should not only know that each customer has different aesthetic and practical needs, they should also be aware that peripheral vendors often have solutions just as broad as their customers' needs," says Daugs. 

Lessen Your Price Dependence
"The major obstacle for a VAR to overcome is the price of a POS system," says Matt Chamberlin, director, USA & Canada operations for Bematech. "Showing the ROI regarding a POS implementation versus a traditional ECR (electronic cash register) may be easy. However, the fact is that the small to midsize end user has very little out-of-pocket capital to spend on a POS system."

Although Chamberlin is referring to the SMB marketplace, all companies, regardless of size, are concerned about price. The challenge for a POS hardware VAR becomes how to distinguish itself from its competitors and resist the urge to cut prices on hardware that already has a razor-thin margin. Selling based on price alone can lead a VAR to selling an inferior product, rather than a complete solution that will ultimately be more effective in meeting a customer's goals.

One of the ways VARs can sell POS solutions at higher price points is to take advantage of the many leasing options available today, many of which specialize in POS. "These companies understand the POS business and the customers trying to get a lease. Where a traditional bank would not give a loan, these POS leasing companies will be happy to do so," says Chamberlin. It becomes a lot easier to sell a complete POS system for $99 per month than to pitch a $4,200 out-of-pocket expense.

Make Yourself The Obvious VAR Of Choice
When a customer involves a VAR, the VAR is expected to be an expert. This is true not only before the sale, in terms of pinpointing the best products for a particular installation, but also during the installation and after the sale to keep things operating as smoothly as possible. For example, an expert VAR will not only be able to illustrate the difference between a heavy-duty product and a standard-duty product, it must feel confident letting the customer know why it should buy based on the VAR's recommendation. 

Successful VARs will go beyond selling hardware. "You need to offer more value than simply selling hardware," says Chamberlin. "Selling your company's expertise, services, and knowledge will increase your ability to sell hardware." For example, part of your value-add can come from providing a deeper understanding of the merchant services, meaning credit card processing, and the infrastructure needed to transmit this information. "At the very least, VARs should have strong partnerships with merchant services and ISPs [Internet service providers] to help integrate the total solution. This includes the installation of new networking equipment — or reuse of current networking hardware — and credit card processing applications within the POS system."

Pre- and postsale service is another area where VARs can rise above the competition. "The benefit of a local VAR office for service/support can certainly be more appealing to an end user than a national out-of-state location, which isn't likely to respond on-site in the same business day," says MMF Cash Drawer's Shergi. The importance of service is easy to see if you take the time to consider that the POS system is often the most vital part of an organization's operations. POS is much more than just a transactional platform where customers pay their bills. Often POS is directly integrated with an organization's back end systems, collecting important data that impacts everything from inventory management to marketing trends. If the POS goes down, an organization is not only faced with unhappy customers, it is likely missing out on a great deal of valuable information. A VAR that can get its customer back online quickly will come out looking like a hero.

To sum it up, close attention to detail will help any VAR evaluate its prospective client's needs. A VAR can carefully note the challenges and provide a solution that answers what is important to its client as a whole. In addition, VARs need to determine which market they're most suited to serving and pursue it wholeheartedly. Some markets are certainly hotter than others, but the VAR's expertise is more relevant to its sales success than simply targeting those markets. Being able to suggest POS systems that will improve service, increase marketing opportunities, or shorten transaction times for a prospective client will illustrate VAR expertise. Keeping up to date with trends in the industry and choosing partners that can respond quickly will enable a VAR to provide superior value, regardless of which market it serves.