Q&A | January 3, 2014

Peer-To-Peer: The Best Way To Sell Subscription-Based POS

Bernadette Wilson

By Bernadette Wilson

Top Federal IT Initiatives Include Security, Disaster Recovery, Digitizing Records

Business Solutions interviewed Dave Iava, senior account representative for Plymouth Rock Merchant Services, for the article “Take A ‘Pay It Forward’ Approach To POS.” After Iava established Plymouth Rock, which offers payment processing services, he began providing point of sale (POS) systems for a monthly fee. Iava offers advice to other solutions providers selling “Free POS.”

BSM: What have you found to be the best way to market “Free POS”?

Iava: I’ve found that it’s best to lead with payment processing. This is often the company’s biggest expense and pain point, and there are a lot of payment processors that overcharge small business owners. I met with a small pizza shop owner recently who was getting hit with a 25-cents-per-transaction fee for credit card payments and with higher rates for over-the-phone credit card transactions. Each month, the credit card company was earning $550 from him, and the sales rep that sold him this plan was making an additional $250. I was able offer the customer a plan that saved him $480 per month, which immediately offset the cost of upgrading from a cash register to a fully functional, subscription-based POS system.

BSM: Who is your typical customer?

Iava: The typical customer is a small business owner who is running the business while trying to handle IT at the same time.

BSM: How do you price your services?

Iava: Unlike other payment processors that try to make $600 or more per month from a small retailer, I normally make about $120. Even though at that lower rate it takes longer to build up a healthy recurring revenue stream, it creates higher customer loyalty and leads to longer term customer relationships with steadier growth.

BSM: Has this approach opened the door to new customers?

Iava: Selling a subscription-based POS offering that is bundled with a low-cost payment processing plan enables me to reach the small business owner that often has not been able to afford a traditional POS system.