Are you aware that every year around 30 percent of restaurants close their doors. The physical retail or retail business has a short life. It is especially true for the mid- and small market segments. Some critical factors that are responsible for this phenomenon are high employee turnover rates, fixed costs, and fickle-minded customer business.
Why the hospitality sector is averse to adopt tech products
It is hardly surprising that the retail and hospitality sector is not a preferred domain for companies developing technology products. If the customer base is of low-margin, the business also becomes so.
Some technology businesses have been successful with respect to the POS or Point-of-Sale system. The providers of POS systems are affected by high churn of customers. Incidentally, the customer churn is mostly “involuntary”. It happens when merchants go out of their businesses.
It is also true that many POS systems have started expanding across different business processes. These systems are enjoying more relevance in customers operations. The only challenge before these systems is high churn of customers as mentioned above. The numbers may vary due to the difference in customer profile.
The cost of customer acquisition is pretty higher as compared to retaining the. Thus, it is important to keep the value of customer lifetime high an it is where the problem starts.
How to stabilize your POS business
Do you wish your POS business to be successful? You need to then prioritize your findings and retain your valuable and loyal customers who have been doing business with your restaurant for at least 3.5 years. These customers continue to bring extra revenue streams.
Many top POS providers globally are putting their best foot forward to get into the Business-to-Business fintech game. Their strategy is to develop a full operating solution for the merchants.
If they can gain a foothold in the key business processes of the customers, reducing voluntary churn will become simpler. The move will also bring in higher chances to capture and add value.
Getting success in the game will depend on detecting the most crucial business activities. You need to also discover where the incumbent products can be displaced. Effective integration also is a key to this process.
New POS trend
A few merchants opt for using payment processing facilities and POS software from 2 separate providers. Though this strategy was popular in the past, this kind of integration has witnessed a plunge in importance. Today, most merchants and vendors are sowing higher preference for combining POS software and payment processing together.
The article has been published by the editorial board of the Fintek Diary. Happy Reading. For more information please visit www.fintekdiary.com
