What's Your Hospitality POS Sales Strategy?

Eric Yin, owner of Sinah Technology, knows that the U.S. economy is negatively affecting his restaurant customers. In all, the VAR currently has more than 1,000 customers in the United States,  with approximately 500 in his home state of Georgia. Many of the restaurateurs Yin has spoken to have shared that the slow economy and high gas prices are slowing down business. Indeed, according to Yin, restaurant sales are down 10% to 20%. With restaurateurs tightening their belts in these lean times, you'd think that Sinah's sales would be down, too. But, you'd be wrong. In fact, Yin estimates that his company will grow 20% this year due to his company's ability to sell solutions aimed at helping restaurants reduce loss and increase efficiency via payment processing solutions.

Identify The Restaurateur's Pain Points
Currently, Sinah is most successful at targeting restaurants with either no POS system or an outdated one. In the event the prospective customer doesn't have a POS system, during the sales call Yin strives to meet with either the manager or restaurant owner to stress the inaccuracies inherent in using handwritten tickets. "With no POS system, there are multiple ways a restaurant can lose money," he says. "For instance, employees can knowingly or unknowingly under- or overcharge customers. This commonly happens with beverages." But seriously, how much of an impact can cups of coffee and tea have on a restaurant? Many times, undercharging customers can lead to surprisingly significant losses. A VAR featured in the November 2007 issue of Business Solutions had one restaurant customer standing to lose $18,000 a year just from uncharged cups of coffee and tea. Yin stresses that it's important to show restaurateurs how their restaurants could be losing money and how a modern POS system can solve many common problems.

To have as much impact as possible during sales calls, Yin feels it's important for customers to experience the solutions firsthand. Therefore, Sinah sales reps commonly take a demo all-in-one unit on sales calls. The goal of the demo is to show that with the POS system being offered, employee training will be minimal.

If a potential customer already has a POS system and is unhappy with its performance, Sinah's goal is to update only the necessary components to get the customer operating at the level it desires. "The last thing the customer wants to do is spend more money on a POS system that currently isn't working well," says Yin. "Many times, the hardware is fine, but it's the software that's lacking. In those cases, we wipe out the terminals and install our software." Often, Sinah will perform these software upgrades at a minimum profit margin. Yin feels that in doing so, he makes it more likely the customer will refer Sinah to other restaurants and return to the VAR when it comes time to purchase new hardware or open a new location. "While we earn 30% margins on typical POS installs, we drop down to about 10% to 15% to give someone a deal," reveals Yin.

Increase Revenue With Payment Processing
As someone always looking for new revenue streams, Yin was thrilled to find a significant source of income from reselling card payment processing. He explains that today's restaurants are in a number of different situations pertaining to card payments. First, he explains there are still a lot of small restaurants not doing any card processing. In addition, many who are doing card processing are using dial-up modems to complete the transactions. In these cases, card swipes are either at each POS station or the restaurant is keeping costs low by having a single card swipe that employees share.

There are a few benefits VARs will want to convey when selling payment processing solutions. First is the benefit of increased processing speeds by using IP (Internet Protocol)-based processing. While traditional dial-up terminals can take 20 seconds to process, IP-based payment processing can occur in 2 seconds. With integrated payment processing, card payments can be performed at any POS terminal with a card swipe. The terminal then electronically routes the payment information to a payment processor through a single terminal rather than separate units shared by multiple people, resulting in speed and efficiency increases. Another selling point of integrated processing is that end-of-day reports for the entire organization can be generated without the need to manually add up register tapes. Finally, oftentimes a switch to integrated card processing can equate to lower processing fees and increased profits for the restaurant.

To read about another VAR's hospitality sales strategy, go to BSMinfo.com/jp/3264.

Despite these benefits, Yin cautions that if you're selling Internet-based card processing, you'd better be prepared to convince restaurateurs that the connection is reliable and stable. "Many restaurateurs fear using the Internet for card processing due to bad experiences with unstable Internet connections a few years ago," he says. "In some cases, to overcome those fears we offer a backup dial-up device that can process cards via dial-up modem when broadband connectivity is down." For the past two years, Sinah has been offering both Mercury and PPI payment processing to new customers, while converting existing customers. "The residual income we earn from selling integrated payment processing is enough to pay our office rent."

Video Surveillance: Your Next POS Sales Opportunity?
The technology providing the largest boost to Sinah's bottom line is video surveillance. Many restaurateurs are looking for ways to monitor their restaurants as well as deter employees from stealing. Yin recalls that for the past couple years, more and more customers would ask him if Sinah offered video surveillance solutions. However, Yin hesitated to offer such solutions because none of his employees were familiar with the nuances of selecting and installing the necessary hardware. Finally, just over a year ago, after being asked yet again if Sinah installed video solutions, Yin decided that it was time for his company to make the leap. The interested customer wanted a small security system put in place, and Yin felt it was the perfect opportunity to learn what it takes to sell and install the technology. In the end, Sinah installed a simple two-camera system connected to a DVR (digital video recorder). After completing the video security install, one thing stood out in Yin's mind. "The technology and its installation is very easy," he reveals. "IP-based cameras and DVRs connect to a router like any other networked device. It takes only basic networking skills to deploy the networked video cameras. Also, once the equipment is installed, there is almost never a need to spend time maintaining it." Sinah offers cameras and DVRs from CCTVSTAR. Sinah chooses DVRs with 350 GB of disk space, which gives restaurants about two weeks worth of footage, an adequate archive according to Yin. Additionally, the DVR footage can be accessed via the Internet, allowing managers and owners to monitor the restaurant remotely. According to Yin, remote access is a huge selling point. "Many restaurateurs own multiple locations," he explains. "The ability to access DVR footage remotely should be a primary selling point for VARs."

Of course, the correct camera depends on the need. Most often, Sinah recommends standard 'box' cameras to restaurants. If Sinah's customer needs to monitor a dark area, the VAR recommends cameras with infrared (IR) capabilities. Many of Sinah's nightclub customers request IR dome cameras that can pan and zoom via remote control. In all, Yin figures that sales of video surveillance solutions over the past year have amounted to a 15% increase in Sinah's revenue.

National Restaurant Association research shows there are over 900,000 restaurants in the United States (visit www.restaurant.org to view state-specific data), with 70% being single-owner establishments. Whether or not all these restuarants are feeling the effects of today's economy, Sinah Technology serves as a reminder that, as a solutions provider, it's your job to probe to understand the pain your customers are feeling and then deliver solutions aimed at relieving that pain. Those types of solutions are seen as necessities, and are a much easier sell.