Monthly training sessions, wireless technology, and Y2K have all helped Retail Control Solutions, Inc. increase its sales by 60% for each of the last two years. Can you take a page from this VAR's book and reap the same benefits?
This customer stays plugged in using a laptop computer, cell phone, and point of sale (POS) software. Not all of Schellenbach's customers have - or want - this remote capability. For those who do, Schellenbach is ready, willing, and able to sell them the newest POS technology. Incorporating handheld computers, video cameras, and time and attendance software makes for a more complete POS system. This willingness to push the envelope has helped Retail Control Solutions increase sales by 60% each year for the past two years.
A Vertical Market Focus
Despite its name, Retail Control Solutions, Inc. sells POS hardware and software mainly to the hospitality market, including quick service restaurants, table service restaurants, country clubs, and hotels. Schellenbach admits he's been tempted by other markets. "I'm like a kid in a candy store when it comes to technology," he says. "It all looks so good. Earlier in my career I sold retail solutions, and I know we can do it. But, in order to compete with major players, you have to stay focused in a niche market. Once you deviate, you dilute your efforts."
Located outside of Boston, Retail Control Solutions has 47 employees, up from 27 employees in 1998. Schel-lenbach operates three sales and support offices in Connecticut and Illinois. "When I started in 1990, I wanted to cover New England," he explains. "The local and regional markets were getting tighter, and our infrastructure supported the addition of satellite offices. I didn't intend to grow geographically, but we did."
Business Tactics That Work
To fuel his company's growth, Schellenbach relies on fundamental business tactics that revolve around service. While what he is doing may not be innovative or new, it's paying off in increased sales. Here they are:
- Y2K - Schellenbach saw Y2K as an opportunity, not just a problem to be solved for his 700 customers. Y2K upgrades have kept Retail Control Solutions busy for the past 18 months. "We knew 97% of our customers had a fax machine," notes Schellenbach. "We began our Y2K blitz with a faxed letter to our customers. In the letter, we told our customers about Y2K and the possible ramifications to their POS systems. We called the customers who did not have fax machines." A series of phone calls and mailings to all customers followed during the next nine months.
Schellenbach offered his maintenance customers a free Y2K-compliance test on their existing POS systems. "Y2K and a good economy proved beneficial," Schellenbach says. "Because of the strong economy, restaurant owners had money to spend. Many upgraded their POS hardware, such as cash drawers, as well as their POS software. Our sales were up by 15% because of Y2K."
Schellenbach hired four permanent technical employees to tackle Y2K installations and upgrades. Once the Y2K upgrades are completed, which won't be until next year, the new employees will work as field technicians and work the help desk.
- Help desk - "Our national help desk differentiates us from our competition," states Schellenbach. "Our customers across the country have access to support personnel 24 hours a day, seven days a week. We offer dial-up access to our customers' software and fix problems remotely. Ten years ago, you'd walk a customer through a problem over the phone, or send out a field technician." The help desk also provides computerized call tracking and call histories. It also includes a computerized "knowledge base" of past problems and their resolutions to assist support personnel in answering customer calls.
- Monthly training - Offering monthly training sessions for restaurant managers provides Retail Control Solutions with a steady monthly income. "I have classroom space on-site with nine POS systems set up," explains Schellenbach. "Restaurant owners pay a fee for each employee they send. I offer two to three sessions each month, with between five and 18 people attending each session." The high employee turnover in hospitality means there is no shortage of attendees. One five-hour session for restaurant managers, for example, focuses on inventory and food costing, using the POS system.
Schellenbach says this service is an overlooked moneymaker for VARs. "I have to pay for the classroom space anyway, and I only need to pay one employee to conduct the training," adds Schellenbach. "The training sessions also keep me in front of my customers."
- Trade shows - Despite the cost, Schellenbach believes in attending as many as 10 trade shows each year. "Deals may not be signed at a show, but they are often signed because of a show," says Schellenbach. "That's where you meet the people who are looking to buy POS systems." Among the shows Schellenbach attends are the National Restaurant Association show and the more regional Northeast Foodservice and Lodging show. "You get the feeling that if you are not at a trade show, people won't remember you," comments Schellenbach. "You may not be taken seriously."
- Sales training - Before training his customers, Schellenbach invests in training his own employees. "Many of our salespeople are ex-restaurant managers," says Schellenbach. "They understand how restaurants operate and the restaurant owners' needs. We send the salespeople to many vendor-sponsored training sessions. Our regional sales managers offer additional training – on demonstration skills, for example - throughout the year."
Integrating Additional Technology Into POS Solutions
"The more applications you can put on a piece of hardware, the easier it is for your customers to justify the expense," says Schellenbach. "Adding applications such as labor scheduling and frequent dining derives more benefits for the same price. An appropriate add-on in hospitality is video security cameras, used to monitor employees. The products we are looking at are not extremely sophisticated. They are not intensive support items, but they do add to our bottom line."
Schellenbach also sells his current customers wireless headsets and pagers. "Restaurant owners want to increase the number of customers seated by speeding up the service," says Schellenbach. "Wireless pagers alert wait staff to food orders in the kitchen. The pagers also are used to let customers know their tables are ready."
He predicts that handheld devices may become widely adopted in hospitality, if the units decrease in price and become more user-friendly. "Handhelds are used in arena applications. Many of my customers ask for handhelds, but balk at the price. You can have one touch screen monitor for every three to five waitstaff. However, you need one handheld for each server, increasing the cost of the hardware by as much as 50%. Also, there is a drawback to using handhelds in restaurants. A typical restaurant has 600 menu items. You'd have to flip through as many as 30 screens on the handheld device to get to certain items."
Letting Go To Grow
When Schellenbach first started Retail Control Solutions in 1990, he was much more hands-on than he is today. By 1997, Schellenbach and his partner, Jim Symes, each had nine people reporting to them. "With no managers, we weren't able to plan and think about our company's growth," says Schellenbach. "We bit the bullet and added another layer of management. By hiring new employees and promoting from within, five management positions were created. Now we have managers responsible for the help desk, sales, support, installations, and administration. It took about six months for everything to fall into place. It was hard to let go of some things, but we knew it was necessary. This freed us to expand and open offices in other cities. I wish we would have taken this step sooner."
In fact, Schellenbach plans to open more offices in the Midwest, after the Y2K furor has diminished. The monthly training sessions and help desk service provide a continuous revenue stream, allowing Schellenbach to focus on expanding his solutions to the hospitality market. It's a system that works.