Three Strategies To Boost POS Sales
"The bad news about the economy we get inundated with strikes fear in the hearts of those calling on small business. If you get by that fear and make the effort, there's still lots of business out there to be won." That's a great statement by Tom Ruscitti, owner of VAR POS Services in Tucson, AZ. Over the years, I've had the opportunity to speak with Ruscitti at various industry events. No matter what's going on the industry, no matter how the economy is, the VAR has a way of seeing through the complexities of business and making things seem almost simple. During a recent conversation, I had a chance to speak with Ruscitti at length about his business and strategy for growing his book of retail and hospitality business. From that conversation, I was able to glean three strategies other VARs can apply to their own business.
Establish Relationships With Accountants
Ruscitti recalls that 25 years ago, one of the first sales leads he ever received was from a CPA firm that specialized in doing the books for restaurants. Every time the CPA landed a new account, they'd recommend Ruscitti for POS (point of sale). That early experience shaped one strategy for landing new business. "Every VAR knows that the best way to get sales is to get in early on the buying cycle," he says. "When a person decides they're going to open a business, they have to create a business plan and figure out their financing. This usually entails hiring an accountant." Knowing this, Ruscitti makes it a point to know every accountant in his area by name. As Ruscitti's moved over the years, the first thing he does upon relocating is get in touch with local accountants — particularly Intuit partners — and try to form partnerships. Why Intuit partners? Because, Ruscitti says, 94% of small businesses use Intuit QuickBooks. Additionally, POS Services solutions are built with QuickBooks as the backbone.
Ruscitti breaks Intuit partners into two categories. The first are Pro Advisors, which are accountants, bookkeepers, and consultants. Ruscitti estimates there are 40,000 Pro Advisors in the United States. The second category consists of Intuit Solutions Providers (ISPs). This group is smaller (about 800 in the United States), and while more technically astute, primarily focus on enterprise accounting apps and sometimes POS. Ruscitti estimates there are only about 200 of the ISPs selling Intuit's retail POS software QuickBooks POS. The number of ISPs selling POS solutions beyond QuickBooks POS (like Ruscitti's company) is less than 20.
Why is this important? The various Intuit partners out there not only have a direct pipeline to your potential customers, the majority of Intuit partners have no interest in the POS piece of their customers' business. "If an ISP does two or three POS installations a year, they're going to struggle to be good at it," says the VAR. "They're not geared to provide the same level of expertise as someone who lives POS like we do. They realize the danger in failing, as POS is not really what they do." Therefore, Ruscitti says these Intuit resellers are eager to find help with POS.
Building partnerships in which Intuit partners bring in Ruscitti for the POS solution has paid off. "At least 35% of my new business comes directly from Intuit relationships," says Ruscitti. "We recently opened a new office in Indianapolis and the first thing we did was invite Pro Advisors to introduce ourselves. One week after our first meeting with five Pro Advisors, we were in front of three of their customers, two of which turned out to be $30,000 deals."
Build Your Retail, Hospitality Credibility With Education
Another strategy Ruscitti believes contributes to his success is building his local reputation. For instance, the VAR holds monthly webinars to educate restaurateurs and retailers. The purpose of the webinars isn't to capture leads or directly win business; it's to be seen as someone who knows the POS industry and is willing to help his community.
Ruscitti's first webinar was held a couple of years ago when the VAR's competition began sending a lot of misinformation about PCI compliance. The VAR found himself fielding calls from his customers asking what to do. "Rather than have the same conversation multiple times, I decided to have a conference call," he explains. "Someone asked me who all is invited and I said, ‘I don't care who comes. If I'm saying it to 10 guys, I might as well say it to 100.'" In all, Ruscitti held six webinars on PCI compliance. The majority of the information he used for the PCI webinars came from the Retail Solutions Providers Association (RSPA), of which Ruscitti is a member. Because people are busy, Ruscitti keeps his webinars to around only 15 minutes. This obviously requires the presentation to consist of only valuable nuggets of information.
Besides PCI and other POS-specific topics, the VAR also hosts webinars on topics relevant to his community. For instance, a year ago a main road in Tucson was shut down for repairs for months. The road was a vital link to many local businesses that were suffering (some even went out of business). Because this was such an important issue to the retail community, Ruscitti held a webinar in which he and other local business leaders shared their tips for how to combat the problem. One specialty retailer sent a mailing to customers which included a map of a detour to get to the store.
Another relevant topic was the state of power in Tucson. Ruscitti says the power grid in Tucson is "dirty," meaning there are often sags and surges of power which can damage electrical equipment. Many people underestimate the damage that can be caused. Ruscitti brought in an electrician for one webinar to educate the audience on the importance of power conditioning devices and UPSs.
Typically, the VAR has between 10 and 20 people dial in for the webinars. Month over month, he explains, about half the attendees are the same. "I send out the invite to all restaurants [and retailers, if appropriate] in my database," he says. "Unless they connect via the online WebEx interface as opposed to just a telephone, I don't even know who's attending." And Ruscitti doesn't care. He doesn't look at his webinars as a way to generate new business. It's a service he provides to the community and one that happens to create more loyalty and recognition.
"My business strategy has always been the same — I want my town to look at me as the local retail technology expert," he says. When the media has a question, Ruscitti wants them to automatically think of POS Services. It's worked. He's done radio shows and participated in newspaper columns. Rather than advertise around town, he relies on word of mouth and his reputation. In fact, POS Services doesn't invest in any typical advertising.
Boost Your POS Business Via Community Outreach
The final strategy Ruscitti employs is supporting his community.
He does this three ways primarily. First, he volunteers his services whenever he can. For example, the VAR is involved with a local organization called the Tucson Originals, a group of local independent restaurants. The Tucson real estate community contracted the group to do an annual event. "It's difficult for one of the members to pull out one of their POS terminals and take it to the event," Ruscitti says. "Instead, I provide a terminal for them at no cost. It costs me half a day to set up and tear down the system." In return, Ruscitti gains the appreciation of the group, which is made up of about 60 restaurateur members.
The second way Ruscitti supports his community is by not competing with non-POS businesses. For instance, the VAR doesn't sell paper and supplies or do cabling for his installs. Rather, he relies on local paper suppliers and cabling companies. While Ruscitti knows he's missing out on revenue, he doesn't feel the loss is enough to offset the amount of goodwill he generates by handing over income to these suppliers. "I don't sell anything other than my time and POS hardware and software," he says. "Sure, we could and make a couple bucks, but those suppliers are doing all kinds of other work across town and calling me if my services are needed."
The final way Ruscitti supports his customer base is by being flexible with his billing. For example, in late summer, the VAR says Tucson's population drops due to the extreme heat. Restaurant business therefore also drops, putting a financial strain on the VAR's customers. Therefore, POS Services doesn't bill customers during the summer. "We run about 50 calls a month in the summer, but we won't bill them until September. That sort of understanding and support goes a long way in building our reputation."
While nothing Ruscitti is doing could be considered revolutionary, Ruscitti says his partnerships with local accountants and his constant desire to do what's right for his customer community is paying off. The VAR had 20% revenue growth in 2009 and expects to exceed that figure in 2010 with the addition of a recent partnership with a national CPA firm. While the economy had a great effect on the majority of VARs, Ruscitti found success by following the same strategies and principles he's had for 25 years.