Seasoning Systems To Restaurants' Tastes
Read the inside story of how one point of sale VAR, Progressive Software has used customized software to grow its revenues to $25 million.
Six years ago, when point of sale (POS) VAR Progressive Software, Inc., first started selling POS systems to Starbucks Coffee, the chain only had 20 locations. However, Starbucks is now a household name, with more than 1,100 locations nationally - and more significant POS requirements.
Just as Starbucks has flourished, so too has the business relationship between Starbucks and Progressive Software. Whenever Starbucks has opened a new location, Progressive has been there to install the POS systems, according to Barry Duppstadt, vice president of marketing for Progressive Software. Duppstadt, a 30-year veteran of the POS industry, says one main reason Starbucks has continued to buy from Progressive (Charlotte, NC), is the latter's willingness to customize software.
According to Duppstadt, many VARs buy software from vendors and developers. But when they resell it to end users, they don't customize, or tweak, the software to address the user's unique business needs.
For example, many software packages for hospitality meet many of the needs of most restaurants. However, some restaurants have developed unique and special processes that usually are not addressed by generic, "off-the-shelf" software packages. Progressive Software also has gained national restaurant accounts like Marie Calendar's, Captain D's and Show Biz Pizza because of its willingness to use its expertise in customizing software. Those types of accounts helped rocket Progressive Software to $25 million in revenues last year. To put the company's growth in better perspective, as recently as 1994, Progressive Software's revenues were only $8 million; in 1995 this figure was $18 million. Here, Duppstadt explains in more detail why Progressive Software has concentrated on custom software as well as on properly meeting customers' expectations.
The Importance Of Customized Software
Many VARs don't customize software because they lack staff with the necessary programming expertise. Adds Duppstadt, "Most ‘generic' software meets 75% of the customer's business needs. But it often doesn't meet the remaining 25%. Many VARs force customers to change some of their processes in order to fit the software."
According to Duppstadt, VARs who are unwilling to customize their software to meet a prospect's unique business needs face the risk of losing the sale to someone who will. Allowing customers to operate the way they always have, through customization, has given Progressive an edge over its competitors in the POS industry, he adds.
"Many restaurants have developed a unique process that gives them an advantage over the restaurants down the block that do things the standard way," he explains. "Restaurants that have developed a unique process don't want to change what they do to fit an off-the-shelf software package.
"One of our customers, Show Biz Pizza, hosts birthday parties for children. Show Biz Pizza wanted to make it as easy as possible for people to call and schedule birthday parties. They wanted to take party reservations a month in advance, so their software needed that capability. Show Biz Pizza also wanted to keep track of how many people were expected to attend and the quantity of food, beverages and party favors they would need based on that number."
Customization Pays Dividends
Employee theft in restaurants is common, Duppstadt says. One expression in the industry underlies this point: "the most honest restaurant employee is the one who steals the least compared to coworkers." However, VARs who customize software can help restaurants reduce costly employee theft. For example, Duppstadt says some restaurant employees punch in a half-hour - or more - before they are scheduled. However, most of those employees don't start working until they are scheduled to. They steal from the restaurant by getting paid more than they should, he explains.
"Many restaurants pay their employees to do nothing for a half-hour every day," he adds. "We have customized systems so that employees couldn't punch in until five minutes before they were scheduled to work. Managers input the employee names and schedules so the system recognizes when employees tried to clock in early. We gave the managers the ability to override that function if they were busy and they needed the employee to start working early. But because employees couldn't punch in early, the restaurant saved money."
The Importance Of Honest Business Dealings
In addition to customization, Progressive Software also has focused on properly setting prospects' expectations. "If our product can't do something the prospect wants it to, we tell them," he says. For example, Progressive recently was preparing to install point of sale systems for a chain called Braum's Ice Cream and Dairy Stores, which has 225 locations. Progressive was up-front with Braum's in their initial discussions. Some VARs could have been tempted to mislead Braum's initially, and then try to cover themselves - after Braum's had signed a contract. "So in the initial phase of the installations, we only did the things we could do competently," he adds. "And then we talked to them about completing the next phases."
Testimonials Can Prove Valuable For VARs
Progressive Software encourages prospects to call its existing customers who have indicated a willingness to provide testimonials. Duppstadt has a list of 10 such references at his fingertips which he says prospects can call if they want to know "what it's like to work with Progressive Software."
"Whether or not we're a good company to do business with comes through loud and clear when prospects talk to our references," he explains. "When VARs tell prospects how great they are, the prospects should take it with a grain of salt. But when prospects hear it from one of the VAR's customers, it is more meaningful because it's coming from a more objective viewpoint." Duppstadt adds that VARs should allow prospects to call any of their existing customers. Some prospects think references from a prepared list have been told to say good things about their VAR. "So we allow them to call any of our existing customers," he says.
Restaurants Offer VARs Exciting Possibilities
Duppstadt believes Progressive Software can continue its strong growth. He says it is an "exciting time" to sell to the restaurant market. Restaurants' high level of interest in touch screen systems are creating sales opportunities. Touch screens are an appealing technology to restaurants primarily because of their ease of use. For example, a series of screens can guide servers through processes like sending orders to the kitchen and processing customer checks. Servers simply touch the appropriate boxes on the screen, allowing them to perform those types of tasks quickly and easily.
According to Duppstadt, touch screens' ease of use also makes the training of servers fast. For example, he says one of Progressive's customers had an overflow of customers and needed an employee who previously had not used a touchscreen to operate one. Despite having no prior training, the employee learned to use the touch screen in a matter of minutes.
"Over the next few years, touchscreens will be the dominant point of sale technology in the restaurant industry," he says. "A lot of restaurants will be forced to use them when they see how their competitors down the street are operating more efficiently, and boosting their profitability. So many restaurants will feel compelled to use touch screens."
Leading Prospects To Commit To Contracts
Duppstadt is a firm believer in customizing software. But Progressive Software also has realized the value of having customers visit the company's facility in Charlotte, NC. Progressive wants prospects to meet its employees and see a product demo. If a prospect won't come to Charlotte, Progressive doesn't continue pursuing them.
"When prospects visit us, they have to take a day or two out of their schedule. They also have to pay for travel costs," he explains. "So once they invest time and money, they feel more obligated to try one of our systems. If they don't invest any time or money, it's easier for them to buy from someone else."